Diversified Growth Portfolio with Strong Historical Performance and Moderate Risk for Long-Term Investors

Report created on Aug 11, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of four primary ETFs, with a significant allocation toward the Vanguard Total Stock Market Index Fund ETF Shares at 50%. This composition indicates a strong focus on broad U.S. market exposure. The Schwab U.S. Large-Cap Growth ETF follows with 25%, emphasizing large-cap growth stocks. Additionally, there is an international element with the Vanguard Total International Stock Index Fund ETF Shares at 15%, providing global diversification. The Avantis U.S. Small Cap Value ETF at 10% offers exposure to small-cap value stocks, contributing to diversification. This mix suggests a well-rounded approach, balancing growth with diversification across market capitalizations and geographies.

Growth Info

The portfolio has demonstrated robust historical performance, with a compound annual growth rate (CAGR) of 17.26%. This impressive figure indicates a strong track record of returns over time. However, it's important to note the maximum drawdown of -35.14%, highlighting potential volatility during market downturns. The concentration of returns in just 18 days suggests that timing plays a significant role in achieving these gains. Understanding these dynamics is crucial for setting realistic expectations and managing risk. Despite the volatility, the overall historical performance suggests a promising trajectory for long-term growth-oriented investors.

Projection Info

Utilizing a Monte Carlo simulation with 1,000 iterations, the portfolio's future projections reveal a wide range of potential outcomes. The 5th percentile shows a modest 82.55% increase, while the median suggests a robust 626.96% growth. The 67th percentile even projects an impressive 1,009.94% return. With 990 simulations yielding positive returns, the portfolio exhibits a favorable outlook. The annualized return across all simulations stands at 18.56%, reinforcing the potential for substantial long-term gains. These projections underscore the importance of maintaining a long-term perspective and remaining committed to the investment strategy despite potential market fluctuations.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted toward equities, with 99.64% in stocks, providing substantial growth potential. A minimal allocation to cash and other assets suggests a focus on maximizing returns through market exposure. This heavy stock allocation aligns with the portfolio's growth-oriented classification, catering to investors seeking higher returns over time. While this approach can yield significant gains, it also introduces increased volatility. Investors should be prepared for potential fluctuations in value, particularly during market downturns. To mitigate risk, consider gradually incorporating more conservative asset classes over time as financial goals and risk tolerance evolve.

Sectors Info

  • Technology
    30%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation is diverse, with a notable emphasis on technology at 30.04%, reflecting a focus on innovation-driven growth. Financial services and consumer cyclicals also hold significant positions, at 14.51% and 11.49%, respectively, offering exposure to economic cycles. Healthcare and industrials further diversify the portfolio, each contributing around 10%. This sector spread provides a balanced approach, capturing opportunities across various industries. However, the high concentration in technology suggests vulnerability to sector-specific risks. To enhance stability, consider periodically reviewing sector allocations and adjusting as needed to maintain a diversified and resilient portfolio.

Regions Info

  • North America
    86%
  • Europe Developed
    6%
  • Asia Emerging
    3%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly focused on North America, with 85.67% of assets allocated to this region. This concentration reflects a strong bias towards the U.S. market, offering familiarity and stability. However, it also exposes the portfolio to regional risks and misses out on potential growth in other areas. The remaining assets are spread across Europe, Asia, and other regions, providing some international diversification. To balance regional exposure, consider gradually increasing allocations to underrepresented geographies. This approach can capture global growth opportunities while reducing reliance on a single market, enhancing overall portfolio resilience.

Risk vs. return

This chart shows the Efficient Frontier, calculated using your current assets with different allocation combinations. It highlights the best balance between risk and return based on historical data. "Efficient" portfolios maximize returns for a given risk or minimize risk for a given return. Portfolios below the curve are less efficient. This is informational and not a recommendation to buy or sell any assets.

Click on the colored dots to explore allocations.

The portfolio optimization chart suggests potential for improvement, particularly in balancing risk and return. By moving along the efficient frontier, investors can adjust their portfolio to achieve either higher returns or reduced risk. For those seeking a riskier profile, consider increasing exposure to growth-oriented assets. Conversely, to adopt a more conservative stance, gradually incorporate fixed-income securities or other low-volatility investments. It's essential to periodically reassess the portfolio's alignment with financial goals and risk tolerance. This ongoing evaluation can help optimize performance while ensuring the portfolio remains resilient in varying market conditions.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.30%

The portfolio's dividend yield stands at 1.3%, reflecting a modest income stream from the investments. The Vanguard Total International Stock Index Fund ETF Shares contributes the highest yield at 3.0%, while the Schwab U.S. Large-Cap Growth ETF offers a lower yield of 0.4%. This yield profile suggests a focus on growth rather than income generation. While dividends can provide a steady cash flow, the primary goal here appears to be capital appreciation. For those seeking to enhance income, consider exploring dividend-focused strategies or funds. However, ensure that any adjustments align with overall financial goals and risk tolerance.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's cost structure is competitive, with a total expense ratio (TER) of 0.06%. This low-cost approach is beneficial for maximizing net returns over time. The Schwab U.S. Large-Cap Growth ETF and Vanguard Total Stock Market Index Fund ETF Shares contribute to this efficiency with expense ratios of 0.04% and 0.03%, respectively. Keeping costs low is crucial for long-term investors, as high fees can erode returns. Regularly reviewing and comparing expense ratios across investments can help maintain cost efficiency. Consider prioritizing low-cost funds and strategies to enhance the portfolio's overall performance and achieve financial goals more effectively.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey