Balanced Growth Portfolio with Moderate Diversification and High Potential Returns

Report created on Dec 2, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed of 19 different ETFs, offering a moderately diversified mix across various sectors and asset classes. With a strong focus on equities, the portfolio leans heavily towards stocks, making up over 93% of the total allocation. Real estate offers some diversification, comprising about 6.5%. This composition aligns with a growth-oriented strategy, aiming to maximize returns through equity exposure. To enhance diversification, consider exploring additional asset classes or increasing real estate exposure. This balanced approach can help mitigate risks while maintaining growth potential.

Growth Info

Historically, the portfolio has shown impressive performance with a compound annual growth rate (CAGR) of 13.71%. However, it experienced a maximum drawdown of 36.76%, indicating potential volatility. Despite this, the portfolio's ability to recover and deliver strong returns is noteworthy. Understanding these metrics helps in setting realistic expectations and preparing for market fluctuations. To manage risk, consider maintaining a diversified allocation and reviewing the portfolio periodically to ensure alignment with financial goals.

Projection Info

Using a Monte Carlo simulation, the portfolio's future performance was projected based on 1,000 simulations. This method provides a range of possible outcomes, with a median return of 376.14% and a 67th percentile return of 606.37%. The simulation suggests a high probability of positive returns, with 980 simulations showing gains. While promising, it's important to remember that these are hypothetical outcomes. Regularly reviewing and adjusting the portfolio can help manage risk and capitalize on potential opportunities as market conditions evolve.

Asset classes Info

  • Stocks
    93%
  • Real Estate
    6%

The portfolio predominantly consists of stocks, accounting for over 93% of total holdings, with a small allocation to real estate and cash. This heavy equity focus is suitable for growth-oriented investors seeking capital appreciation. However, it also exposes the portfolio to market volatility. Diversifying into other asset classes like bonds or alternative investments could help reduce risk and provide a more balanced approach. Regularly reviewing asset allocation ensures alignment with investment objectives and risk tolerance.

Sectors Info

  • Technology
    20%
  • Financials
    14%
  • Industrials
    12%
  • Energy
    11%
  • Consumer Discretionary
    10%
  • Real Estate
    9%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Telecommunications
    4%
  • Basic Materials
    4%
  • Utilities
    3%

Sector allocation is diverse, with significant exposure to technology, financial services, and industrials. This mix reflects an emphasis on growth sectors, which can drive returns but also introduce volatility. Balancing sector exposure can mitigate risks associated with market fluctuations. Consider periodically reviewing sector allocations and adjusting as needed to maintain a diversified portfolio. This approach helps capitalize on emerging opportunities while managing potential risks associated with sector-specific downturns.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Asia Developed
    2%
  • Australasia
    1%

Geographically, the portfolio is heavily weighted towards North America, with 82.45% allocation. Europe Developed and Japan also have notable allocations. While this focus on developed markets can provide stability, it may limit exposure to growth opportunities in emerging markets. Diversifying geographically can enhance the portfolio's resilience and potential for returns. Regularly assessing geographic allocations ensures alignment with investment goals and risk tolerance. Exploring opportunities in underrepresented regions could offer additional growth potential.

Redundant positions Info

  • Vanguard S&P 500 ETF
    iShares Russell Top 200 ETF
    Fidelity® Low Volatility Factor ETF
    Vanguard Mid-Cap Index Fund ETF Shares
    High correlation

The portfolio includes highly correlated assets, particularly among large-cap ETFs like Vanguard S&P 500 ETF and iShares Russell Top 200 ETF. High correlation can limit diversification benefits, as these assets may move in tandem. Reducing overlap by diversifying into less correlated assets can enhance portfolio resilience. Consider periodically reviewing correlations and adjusting holdings to ensure a balanced and diversified portfolio. This approach can help manage risk and improve overall performance.

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.

Before optimizing the portfolio, focus on reducing overlap by removing highly correlated assets that don't provide diversification benefits. Moving along the efficient frontier can help achieve a riskier or more conservative portfolio. For a riskier approach, increase exposure to equities, while a more conservative strategy may involve adding bonds. Regularly reviewing the portfolio ensures alignment with risk tolerance and financial goals. This process helps optimize returns while managing potential risks effectively.

Dividends Info

  • Pacer US Cash Cows 100 ETF 1.80%
  • Fidelity® Low Volatility Factor ETF 1.20%
  • Fidelity® MSCI Energy Index ETF 2.90%
  • iShares Currency Hedged MSCI EAFE ETF 2.80%
  • IQ 50 Percent Hedged FTSE International ETF 2.40%
  • iShares MSCI Intl Quality Factor ETF 2.50%
  • iShares Russell Top 200 ETF 1.00%
  • First Trust Rising Dividend Achievers ETF 1.60%
  • iShares Residential and Multisector Real Estate ETF 2.20%
  • Invesco S&P SmallCap 600 Revenue ETF 1.20%
  • Schwab U.S. Dividend Equity ETF 3.30%
  • Cambria Shareholder Yield ETF 1.70%
  • Vanguard Mid-Cap Index Fund ETF Shares 1.40%
  • Vanguard S&P 500 ETF 1.20%
  • SPDR® S&P Global Dividend ETF 4.40%
  • Technology Select Sector SPDR® Fund 0.70%
  • Invesco S&P MidCap Quality ETF 4.70%
  • Weighted yield (per year) 2.05%

The portfolio offers a total dividend yield of 2.05%, with contributions from various ETFs like SPDR® S&P Global Dividend ETF and Schwab U.S. Dividend Equity ETF. This yield provides a steady income stream, complementing the growth-focused strategy. Understanding dividend yield is crucial for evaluating income potential. To enhance income, consider exploring additional dividend-focused investments or reallocating to higher-yielding assets. Regularly reviewing dividend contributions ensures alignment with income objectives.

Ongoing product costs Info

  • Pacer US Cash Cows 100 ETF 0.49%
  • Fidelity® Low Volatility Factor ETF 0.15%
  • Fidelity® MSCI Energy Index ETF 0.08%
  • iShares Currency Hedged MSCI EAFE ETF 0.35%
  • IQ 50 Percent Hedged FTSE International ETF 0.20%
  • iShares MSCI Intl Quality Factor ETF 0.30%
  • iShares Russell Top 200 ETF 0.15%
  • First Trust Rising Dividend Achievers ETF 0.49%
  • iShares Residential and Multisector Real Estate ETF 0.48%
  • Robo Global® Robotics and Automation Index ETF 0.95%
  • Invesco S&P SmallCap 600 Revenue ETF 0.39%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Cambria Shareholder Yield ETF 0.59%
  • Vanguard Mid-Cap Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • SPDR® S&P Global Dividend ETF 0.40%
  • Technology Select Sector SPDR® Fund 0.09%
  • Invesco S&P MidCap Quality ETF 0.25%
  • Weighted costs total (per year) 0.28%

The portfolio's total expense ratio (TER) is 0.28%, which is relatively low, indicating cost-efficient management. Lower costs can enhance net returns over time, making this an attractive feature. Understanding expense ratios helps in assessing the cost-effectiveness of investments. To maintain low costs, consider regularly reviewing expense ratios and exploring cost-effective alternatives. Keeping investment costs in check ensures more of the returns are retained, contributing to overall portfolio growth.

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