A high-risk technology-focused portfolio with significant US market exposure and leveraged components

Report created on Jan 7, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards ETFs, with a significant 42% in a leveraged ETF tracking the MSCI USA index. This high concentration in leveraged products suggests a focus on aggressive growth, which can increase volatility. The inclusion of NVIDIA Corporation at 26% further emphasizes a tech-heavy strategy. While the portfolio is moderately diversified, it leans heavily on high-risk, high-reward assets. To balance risk, consider incorporating more traditional, less volatile assets. This could help stabilize returns during market downturns.

Growth Info

Historically, the portfolio has shown impressive growth with a CAGR of 37.82%, indicating strong past performance. However, the max drawdown of -44.23% highlights significant volatility, which is common with aggressive strategies. This volatility can lead to substantial short-term losses, demanding a strong risk tolerance. Comparing this to benchmarks, the performance is exceptional, but it's crucial to remember that past performance doesn't guarantee future results. Investors may want to brace for potential downturns and ensure they are comfortable with the associated risks.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns. The 50th percentile projection is an impressive 8,224.57%, but it's important to note that these projections are based on past data and assumptions. The simulations show that all scenarios yielded positive returns, highlighting the portfolio's growth potential. However, the high variability in outcomes underscores the importance of preparing for different market conditions. Investors should maintain a long-term perspective and be ready for potential volatility.

Asset classes Info

  • Stocks
    58%
  • Other
    42%

The portfolio is primarily composed of stocks, with 57.95% allocated to this asset class. The rest is categorized as "Other," likely due to leveraged ETF exposure. This allocation is typical for an aggressive growth strategy but may lack sufficient diversification. Compared to benchmarks, the portfolio's stock allocation is high, increasing exposure to market fluctuations. Consider diversifying into other asset classes, such as bonds or commodities, to reduce risk and enhance stability. This can provide a buffer against stock market volatility.

Sectors Info

  • Technology
    37%
  • Financials
    5%
  • Consumer Discretionary
    3%
  • Telecommunications
    3%
  • Health Care
    3%
  • Industrials
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in technology, accounting for 36.62% of the allocation. This focus aligns with recent tech sector growth but also introduces sector-specific risks. Other sectors, like financial services and consumer cyclicals, have minimal representation. Compared to benchmarks, this concentration may lead to higher volatility, especially during sector downturns. Diversifying across more sectors could help mitigate risks associated with sector-specific events. Consider increasing exposure to underrepresented sectors to achieve a more balanced allocation.

Regions Info

  • North America
    51%
  • Europe Developed
    4%
  • Japan
    1%

The portfolio's geographic exposure is predominantly in North America, with 51.12% allocated there. This significant concentration can impact diversification and increase vulnerability to regional economic shifts. The limited exposure to Europe, Japan, and other regions suggests a need for broader geographic diversification. Compared to global benchmarks, this allocation might miss out on opportunities in emerging markets or other developed regions. Expanding geographic exposure can help reduce regional risk and capture growth opportunities worldwide.

Redundant positions Info

  • Amundi ETF Leveraged MSCI USA Daily UCITS ETF
    HSBC MSCI World UCITS ETF
    High correlation

The portfolio contains highly correlated assets, particularly the Amundi ETF Leveraged MSCI USA Daily UCITS ETF and the HSBC MSCI World UCITS ETF. This correlation limits diversification benefits, as these assets tend to move in tandem. During market downturns, such correlations can exacerbate losses. To enhance diversification, consider replacing one of these ETFs with an asset that has a different risk profile or exposure. This adjustment can improve the portfolio's resilience against market volatility.

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.

For risk vs. return optimization, the portfolio could benefit from adjustments based on the Efficient Frontier, which seeks the best possible risk-return ratio. Currently, the portfolio's high-risk assets may not be positioned optimally. By reallocating within existing assets, you can potentially achieve a more efficient balance. This doesn't necessarily mean adding new assets but rather adjusting the weights of current holdings. Such optimization can help ensure that you're getting the most return for the level of risk you are taking.

Dividends Info

  • HSBC MSCI World UCITS ETF 0.70%
  • Weighted yield (per year) 0.20%

The portfolio's dividend yield is relatively low at 0.2%, with the HSBC MSCI World UCITS ETF contributing 0.7%. This suggests a focus on capital appreciation rather than income generation. For investors seeking regular income, this might not be ideal. However, for those prioritizing growth, the low yield aligns with the portfolio's aggressive strategy. If income is a consideration, incorporating higher-yield assets or dividend-focused funds could provide additional cash flow without sacrificing growth potential.

Ongoing product costs Info

  • Amundi ETF Leveraged MSCI USA Daily UCITS ETF 0.35%
  • HSBC MSCI World UCITS ETF 0.15%
  • Xtrackers Artificial Intelligence &Big Data UCITS ETF 1C 0.35%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) is 0.2%, which is competitively low, supporting better long-term performance. The cost efficiency is impressive, especially given the inclusion of specialized ETFs. Lower costs mean more of your returns stay in your pocket, enhancing compounding effects over time. Regularly reviewing and ensuring that the TER remains competitive is wise. If costs increase, consider switching to lower-cost alternatives to maintain this advantage. Cost management is crucial for maximizing net returns.

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