A growth-focused portfolio with strong U.S. bias and high tech concentration

Report created on Jan 1, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is predominantly composed of ETFs, making up 63% of the total allocation, with individual stocks representing the remaining 37%. The Vanguard S&P 500 ETF has the largest share at 26%, followed by the Invesco NASDAQ 100 ETF and Vanguard Total World Stock Index Fund ETF Shares, each at 12%. This composition reflects a growth-oriented strategy with a significant focus on large-cap U.S. equities. While ETFs offer diversification, the concentration in a few funds can limit exposure to other asset classes. Consider diversifying into bonds or alternative investments to balance risk and potential returns.

Growth Info

Historically, the portfolio has delivered a robust Compound Annual Growth Rate (CAGR) of 20.02%, indicating strong performance. However, it has also experienced a maximum drawdown of -29.66%, highlighting potential volatility. This performance surpasses typical benchmark indices, suggesting effective asset selection. Nonetheless, past performance should not be solely relied upon for future expectations. Consider maintaining a diversified approach to mitigate the impact of market downturns and ensure continued growth.

Projection Info

Forward projections using Monte Carlo simulations suggest an annualized return of 29.91% with a high probability of positive outcomes. This method uses historical data to simulate potential future scenarios, but it's important to note that these are not guarantees. The wide range of potential outcomes reflects the inherent uncertainty in investing. Regularly review and adjust your portfolio to adapt to changing market conditions and personal financial goals, ensuring it remains aligned with your risk tolerance.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising over 99% of the total allocation. This high equity exposure aligns with a growth-focused strategy but may increase vulnerability to market volatility. Compared to a balanced benchmark, which often includes bonds and other asset types, this portfolio lacks diversification across asset classes. Consider incorporating fixed-income securities or alternative investments to reduce risk and provide more stability during market fluctuations.

Sectors Info

  • Technology
    34%
  • Financials
    23%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Health Care
    6%
  • Industrials
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio exhibits a strong concentration in the technology sector, accounting for nearly 34% of the total allocation, followed by financial services at 23%. While this tech focus can drive growth, it also increases exposure to sector-specific risks, such as regulatory changes or tech market corrections. A more balanced sector allocation could enhance diversification and reduce risk. Consider reallocating some investments to underrepresented sectors like healthcare or industrials to achieve a more even distribution.

Regions Info

  • North America
    88%
  • Asia Emerging
    5%
  • Europe Developed
    2%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Japan
    1%

Geographic exposure is heavily skewed towards North America, making up 88% of the portfolio. This concentration limits international diversification and exposes the portfolio to regional economic risks. Compared to global benchmarks, which typically have more balanced geographic allocations, this portfolio could benefit from increased exposure to international markets. Expanding investments in Europe, Asia, and emerging markets can enhance diversification and capture growth opportunities outside the U.S.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The portfolio includes highly correlated assets, such as the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares. High correlation means these assets tend to move in the same direction, reducing diversification benefits. During market downturns, correlated assets may not provide the desired risk mitigation. Consider reducing exposure to overlapping assets and introducing less correlated investments to enhance diversification and improve risk management.

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.

While the portfolio aims for growth, it can be further optimized using the Efficient Frontier, which seeks the best risk-return ratio. This involves adjusting the allocation among current assets to achieve maximum efficiency. However, the presence of highly correlated assets limits diversification benefits. Prioritize diversification and consider reallocating towards underrepresented asset classes and sectors. This approach can enhance the portfolio's risk-return profile, ensuring it aligns with your investment goals.

Dividends Info

  • Apple Inc 0.40%
  • Broadcom Inc 0.90%
  • American Express Company 0.90%
  • Bank of America Corp 2.30%
  • BlackRock Inc 2.00%
  • Blackstone Group Inc 2.00%
  • Alphabet Inc Class C 0.30%
  • Goldman Sachs Group Inc 2.00%
  • JPMorgan Chase & Co 1.90%
  • The Coca-Cola Company 3.10%
  • Microsoft Corporation 0.70%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 2.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.46%

The portfolio has an overall dividend yield of 1.46%, with notable contributions from the Schwab U.S. Dividend Equity ETF and Coca-Cola. Dividend income can provide a steady cash flow, which is beneficial for reinvestment or income generation. However, the focus on growth stocks may limit dividend yields. If income generation is a goal, consider increasing allocation to high-dividend stocks or ETFs, balancing growth and income to suit your financial objectives.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, indicating cost-efficient management. Lower costs mean more of your investment returns are retained, enhancing long-term performance. This aligns well with best practices for minimizing investment expenses. Ensure that any changes to the portfolio, such as adding new funds or stocks, maintain this low-cost structure. Regularly review fund fees to identify opportunities for cost savings.

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