This portfolio has only about 5.5 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Aggressive High-Risk Portfolio with Single-Focused Diversification in ARK ETFs

Report created on Jul 22, 2024

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is composed of five ARK ETFs, each holding a 20% allocation. This results in a highly concentrated portfolio with significant exposure to innovation and technology sectors. The lack of diversification increases the portfolio's risk, making it more susceptible to market volatility. A more balanced allocation across different asset classes and sectors could help mitigate some of this risk. Diversifying into bonds, international stocks, or other asset classes would provide a more stable performance over time.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 6.03%. However, the maximum drawdown of -75.48% indicates significant volatility. This means that while the portfolio has the potential for high returns, it can also suffer substantial losses. The performance is highly dependent on market conditions, and the investor should be prepared for significant fluctuations. To achieve more stable returns, consider incorporating less volatile assets into the portfolio.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's potential future performance was modeled. The 5th percentile shows a potential loss of -82.95%, while the 50th percentile indicates a modest gain of 130.31%, and the 67th percentile projects a significant gain of 323.31%. The annualized return across all simulations is 14.55%. This wide range of outcomes highlights the portfolio's high-risk nature. Diversifying the portfolio could help reduce the likelihood of extreme losses and provide more predictable returns.

Asset classes Info

  • Stocks
    97%
  • Other
    3%

The portfolio is heavily weighted towards stocks, which make up 97.01% of the allocation. Other asset classes like bonds and cash are almost negligible. This lack of diversification increases the risk of the portfolio, making it highly sensitive to market downturns. Allocating a portion of the portfolio to bonds or other asset classes could help stabilize returns and reduce overall risk. A more balanced mix of asset classes would provide better protection against market volatility.

Sectors Info

  • Technology
    30%
  • Health Care
    25%
  • Telecommunications
    14%
  • Consumer Discretionary
    13%
  • Financials
    11%
  • Industrials
    7%

The sector allocation is concentrated, with significant exposure to technology (29.73%), healthcare (25.20%), and communication services (13.94%). This concentration increases the portfolio's vulnerability to sector-specific risks. Diversifying into other sectors like consumer staples, real estate, or utilities could help mitigate this risk. A more balanced sector allocation would provide a smoother performance across different market conditions and reduce the impact of sector-specific downturns.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Latin America
    1%
  • Asia Developed
    1%
  • Africa/Middle East
    1%
  • Japan
    1%
  • Asia Emerging
    1%

Geographically, the portfolio is heavily weighted towards North America, which accounts for 90.13% of the allocation. This lack of international diversification exposes the portfolio to region-specific risks. Including more international stocks from Europe, Asia, and emerging markets could help reduce this risk. A more geographically diversified portfolio would provide exposure to different economic cycles and growth opportunities, leading to more stable returns.

Ongoing product costs Info

  • ARK Fintech Innovation ETF 0.75%
  • ARK Genomic Revolution ETF 0.75%
  • ARK Innovation ETF 0.75%
  • ARK Autonomous Technology & Robotics ETF 0.75%
  • ARK Next Generation Internet ETF 0.87%
  • Weighted costs total (per year) 0.77%

The portfolio's total expense ratio (TER) is 0.77%, which is relatively high. High costs can eat into returns over time, reducing the overall performance of the portfolio. Lowering the expense ratio by including low-cost index funds or ETFs could help improve net returns. Keeping investment costs low is crucial for long-term success, as even small differences in fees can compound significantly over time.

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