A growth-focused diversified portfolio with a strong emphasis on US equities and dividend income

Report created on Dec 20, 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 heavily weighted towards equities, with a 99.65% allocation, emphasizing growth. It includes a mix of ETFs and a single stock, Palantir Technologies, which represents 5% of the portfolio. The Vanguard Growth Index Fund ETF Shares holds the largest portion at 35%, reflecting a strong growth orientation. Compared to typical growth portfolios, this composition is well-aligned but could benefit from more balance with other asset classes like bonds to mitigate risk during downturns.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 11.66%. This indicates robust growth over time, outperforming many standard benchmarks. However, the maximum drawdown of -26.67% highlights vulnerability during market downturns. This performance suggests a solid return potential but also emphasizes the need for risk management strategies to protect gains during volatile periods.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a wide range of potential results. With 1,000 simulations, the portfolio's annualized return averages 15.81%. The 5th percentile indicates a potential loss of 38.39%, while the median and 67th percentiles show significant growth. While these projections are promising, it's crucial to remember that they are not guarantees, and actual future performance can vary.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is heavily skewed towards stocks, with negligible allocations in cash, bonds, and other categories. This concentration in equities aligns with a growth strategy but limits diversification benefits. Typically, a more balanced allocation including bonds could offer stability and reduce volatility. A reassessment of asset class weights could enhance risk-adjusted returns by incorporating more fixed-income securities.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Telecommunications
    8%
  • Health Care
    8%
  • Energy
    7%
  • Consumer Staples
    7%
  • Basic Materials
    4%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation is diverse, with significant exposure to technology at 26.64%, followed by financial services and consumer cyclicals. This sector mix suggests a focus on growth-oriented industries, which can drive strong returns but also increase volatility. The technology sector's prominence is typical for growth portfolios but may pose risks during interest rate hikes. Balancing sector weights can mitigate this risk and enhance stability.

Regions Info

  • North America
    81%
  • Europe Developed
    11%
  • Japan
    3%
  • Australasia
    2%
  • Asia Emerging
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, comprising 81.42% of its assets. While this reflects confidence in the US market, it limits exposure to global opportunities. Diversifying geographically can reduce risk and capture growth in other regions, especially in emerging markets. A more balanced geographic allocation could improve diversification and potentially enhance returns.

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's current allocation could be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the weights of existing assets to achieve higher returns for a given level of risk. While this optimization focuses on current assets, it does not guarantee diversification or other objectives. Regular reviews can ensure the portfolio remains aligned with risk tolerance and goals.

Dividends Info

  • Avantis® International Equity ETF 1.90%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Schwab International Dividend Equity ETF 3.40%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 1.76%

The portfolio's dividend yield stands at 1.76%, with significant contributions from Schwab U.S. and International Dividend Equity ETFs. While not the primary focus, dividends provide a steady income stream, which can be reinvested for compounding growth. For growth-oriented investors, maintaining a balance between dividend-paying and growth-focused assets ensures both income and capital appreciation potential.

Ongoing product costs Info

  • Avantis® International Equity ETF 0.23%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Dividend Equity ETF 0.14%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.11%

The portfolio's Total Expense Ratio (TER) is impressively low at 0.11%, with the Vanguard Growth Index Fund ETF Shares contributing the least at 0.04%. Keeping costs low is crucial for maximizing net returns over time. These low fees are well-aligned with best practices and support better long-term performance. Regularly reviewing and maintaining low-cost investments is advisable to optimize returns.

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