A balanced portfolio with strong North American focus and technology sector concentration

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of two ETFs and two individual stocks, with a significant 50% allocation to the Vanguard Total World Stock Index Fund ETF. The Invesco NASDAQ 100 ETF follows at 30%, while Berkshire Hathaway Inc and JPMorgan Chase & Co each make up 10%. This structure shows a preference for broad market exposure through ETFs, complemented by targeted investments in well-known companies. This composition is well-aligned with a balanced risk profile, offering a blend of diversification and concentrated bets on high-performing entities.

Growth Info

The portfolio has demonstrated a strong historic performance, with a Compound Annual Growth Rate (CAGR) of 11.83%. This is a solid return, especially when considering the maximum drawdown of -28.29%, which indicates the worst peak-to-trough decline. Compared to benchmarks, this performance is commendable, reflecting the portfolio's resilience and growth potential. However, it's crucial to remember that past performance doesn't guarantee future results. Regularly reviewing performance relative to benchmarks can help maintain alignment with investment goals.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a promising outlook. With 1,000 simulations, the portfolio shows a median projected return of 593.2%, with 994 simulations indicating positive returns. This analysis provides a range of potential future scenarios, highlighting the portfolio's potential for growth. However, it's essential to recognize that these projections are based on historical data and assumptions, and actual future performance may vary. Regular monitoring and adjustments can help navigate potential risks.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% in equities and a minimal 1% in cash. This allocation emphasizes growth potential but also increases exposure to market volatility. Compared to typical benchmarks, the lack of fixed income or alternative assets could limit diversification benefits. To enhance risk management, consider incorporating other asset classes, such as bonds or real estate, which can provide stability and income during market downturns.

Sectors Info

  • Financials
    29%
  • Technology
    28%
  • Consumer Discretionary
    9%
  • Telecommunications
    9%
  • Health Care
    7%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Basic Materials
    2%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio is concentrated in the financial services and technology sectors, making up 29% and 28% respectively. While this sectoral allocation aligns with current market trends, it may expose the portfolio to higher volatility, especially during economic shifts. A technology-heavy portfolio might experience significant swings during interest rate changes. To mitigate sector-specific risks, consider diversifying into underrepresented sectors like healthcare or consumer defensive, which can offer stability during market fluctuations.

Regions Info

  • North America
    82%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

With 82% of assets allocated to North America, this portfolio is heavily skewed towards the U.S. market. While this has been beneficial given the strong performance of U.S. equities, it may increase vulnerability to regional economic downturns. Compared to global benchmarks, the portfolio's geographic exposure is less diversified. To enhance global diversification, consider increasing exposure to emerging markets or other regions, which can provide growth opportunities and reduce reliance on a single market.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    3%

The portfolio is predominantly invested in mega and big-cap stocks, accounting for 57% and 26% respectively. This focus on larger companies offers stability and reduced volatility, as these firms are generally more resilient during market downturns. However, the limited exposure to small and micro-cap stocks may restrict growth potential. To balance risk and reward, consider gradually increasing exposure to smaller companies, which can offer higher returns albeit with greater risk.

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 could potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. Currently, an optimal portfolio could achieve a 20.62% expected return with a risk level of 17.69%. This suggests room for improvement in risk-adjusted returns. However, optimization should be approached with caution, as it may require significant changes to the portfolio's current structure. Balancing risk and return while maintaining alignment with investment goals is key to successful optimization.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 1.48%

The portfolio's total dividend yield is 1.48%, with the Vanguard Total World Stock Index Fund ETF contributing the highest yield at 2.20%. Dividends provide a steady income stream and can enhance total returns, particularly in volatile markets. While the yield is modest, it aligns with a growth-focused strategy. For investors seeking higher income, consider reallocating a portion of the portfolio to dividend-focused funds or stocks, which can offer a more substantial yield.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is impressively low at 0.08%, with the Vanguard ETF contributing just 0.07%. Low costs are crucial for enhancing long-term returns, as they reduce the drag on performance. This cost efficiency aligns well with best practices, ensuring more of the portfolio's returns are retained. Maintaining a focus on low-cost investments can significantly impact overall returns over time. Regularly reviewing and minimizing expenses should remain a priority to optimize performance.

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