Balanced portfolio with a strong focus on technology and real estate sectors

Report created on Aug 3, 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 broadly diversified across major asset classes, with a significant emphasis on stocks (99%) and a minimal cash reserve (1%). The portfolio's structure, leaning heavily towards ETFs and a notable position in common stock (Realty Income Corporation), suggests a strategic approach to balancing growth potential with income generation. The allocation across Vanguard's S&P 500, Total International Stock Index Fund, and specific sector-focused ETFs like Invesco QQQ and NEOS S&P 500 High Income, alongside a modest exposure to emerging markets, indicates a well-thought-out strategy aiming for broad market exposure while seeking higher income streams through dividends.

Growth Info

Historically, this portfolio has shown a strong performance with a Compound Annual Growth Rate (CAGR) of 14.72% and a maximum drawdown of -16.07%. These figures highlight the portfolio's ability to generate substantial returns while maintaining a relatively moderate level of risk. The days contributing to 90% of the returns being concentrated in just 14.0 days point towards the impact of significant market movements on performance. Comparing this to benchmark indices would provide further context on its relative performance, especially during volatile market periods.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes for this portfolio. With 995 out of 1,000 simulations yielding positive returns and a median projected increase of 490.4%, the analysis suggests a strong likelihood of future growth. However, it's essential to remember that these projections are speculative and depend on past market behavior, which may not predict future trends accurately.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The almost exclusive focus on stocks within this portfolio underscores a growth-oriented strategy but also exposes it to market volatility. The minimal cash holding provides limited liquidity and buffer against market downturns. Diversifying across more asset classes, such as bonds or real estate investment trusts (REITs), beyond the current stock and cash composition, could offer better risk management and potentially smoother returns over time.

Sectors Info

  • Technology
    26%
  • Real Estate
    17%
  • Financials
    12%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%

The sectoral allocation reveals a heavy tilt towards technology and real estate, comprising 43% of the portfolio. This concentration in sectors known for their growth potential and income generation, respectively, aligns with a balanced growth and income strategy. However, the significant exposure to technology, while beneficial during bull markets, may increase volatility during tech sector downturns. A more even distribution across sectors could mitigate sector-specific risks.

Regions Info

  • North America
    71%
  • Europe Developed
    10%
  • Asia Emerging
    7%
  • Japan
    4%
  • Asia Developed
    4%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

With 71% of assets allocated to North America and a diversified exposure across developed and emerging markets globally, the portfolio is positioned to capture growth across different economic cycles. However, the relatively low exposure to emerging markets (5%) and specific regions like Latin America and Africa/Middle East might limit potential gains from high-growth areas. Increasing exposure to underrepresented regions could enhance diversification and growth prospects.

Market capitalization Info

  • Large-cap
    43%
  • Mega-cap
    40%
  • Mid-cap
    14%
  • Small-cap
    1%

The portfolio's composition, favoring big (43%) and mega-cap (40%) companies, aligns with its balanced risk profile, as these entities typically offer stability and reliability. However, the relatively small allocation to medium, small, and micro-cap stocks (15% combined) may limit potential upsides from faster-growing firms. A slight increase in exposure to smaller-cap stocks could introduce higher growth potential, albeit with increased risk.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Invesco QQQ Trust
    High correlation

The high correlation observed between the Vanguard S&P 500 ETF and Invesco QQQ Trust suggests redundancy in the portfolio, limiting diversification benefits and potentially amplifying exposure to market downturns. Reducing overlap by reallocating from highly correlated assets to those with lower correlations could enhance the portfolio's risk-adjusted 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.

Optimizing the portfolio along the Efficient Frontier could further improve its risk-return profile. This involves adjusting the allocation between the current assets to achieve the best possible balance of risk and return. The emphasis should be on reducing overlap between highly correlated assets, such as the Vanguard S&P 500 ETF and Invesco QQQ Trust, and increasing exposure to underrepresented sectors or regions to enhance diversification without significantly increasing the portfolio's overall risk level.

Dividends Info

  • Realty Income Corporation 5.20%
  • Invesco QQQ Trust 0.50%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 12.20%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 3.30%

The portfolio's dividend yield strategy, highlighted by the SHP ETF Trust - NEOS S&P 500 High Income ETF's 12.20% yield, contributes significantly to its income generation capabilities. With a total portfolio yield of 3.30%, the approach balances growth with income, providing a regular cash flow. However, focusing too heavily on high-yield assets could expose the portfolio to sectors or companies with higher risk profiles. Balancing yield with growth and stability is crucial.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 0.68%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.12%

The portfolio's overall expense ratio (TER) of 0.12% is impressively low, particularly for a strategy that includes both growth and income elements. This cost efficiency supports better long-term performance by minimizing the drag on returns. Maintaining a focus on low-cost investments, especially within ETFs, is a prudent strategy that can contribute significantly to net performance over time.

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