A growth-focused portfolio with significant exposure to technology and North American markets

Report created on Dec 15, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equities, with a significant 61% allocation to the Invesco EQQQ NASDAQ-100 UCITS ETF and 24% to the Vanguard S&P 500 UCITS ETF. The remaining 15% is allocated to the iShares J.P. Morgan Emerging Markets Bond ETF. This composition suggests a strong focus on growth, with a substantial portion of the portfolio invested in large-cap U.S. stocks. The inclusion of emerging market bonds provides some diversification and potential for income, though it remains a small portion of the overall portfolio. Balancing growth and income, this composition reflects a strategy aimed at capital appreciation with moderate risk exposure.

Growth Info

Historically, the portfolio has delivered a robust compound annual growth rate (CAGR) of 15.45%, indicating strong performance over the past years. However, it also experienced a maximum drawdown of -21.05%, highlighting the potential volatility associated with its equity-heavy composition. This performance suggests that while the portfolio can generate significant returns, it may also be subject to sharp declines during market downturns. Investors should be aware that past performance does not guarantee future results, and they should consider their risk tolerance when evaluating such historical data.

Projection Info

Using Monte Carlo simulations, the portfolio's potential future outcomes were projected based on historical data. With 1,000 simulations, the annualized return was estimated at 11.71%, and the portfolio showed a high likelihood of positive returns, with 991 simulations indicating gains. The 5th percentile outcome was a 60.49% increase, while the 67th percentile reached 433.92%. These projections highlight the portfolio's capacity for growth, though they also underscore the uncertainty inherent in financial markets. Investors should understand that simulations are based on historical data, which may not fully predict future market conditions.

Asset classes Info

  • Stocks
    85%
  • Bonds
    15%

The portfolio is predominantly composed of equities, accounting for over 85% of its allocation, with the remaining 15% in bonds. This allocation suggests a focus on capital growth, leveraging the potential higher returns associated with stocks. However, the limited bond exposure means the portfolio may be less insulated against market volatility. Diversifying across additional asset classes could help mitigate risk and provide more balanced returns. Investors may consider incorporating alternative investments or increasing bond exposure to enhance diversification and reduce potential volatility.

Sectors Info

  • Technology
    39%
  • Telecommunications
    12%
  • Consumer Discretionary
    11%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Industrials
    4%
  • Financials
    3%
  • Utilities
    1%
  • Basic Materials
    1%
  • Energy
    1%
  • Real Estate
    1%

The portfolio is notably concentrated in the technology sector, which comprises 39% of its total allocation. Other significant sectors include communication services and consumer cyclicals. This concentration suggests a strong tilt towards growth-oriented sectors, which can offer substantial returns but also pose higher risks during downturns. While this focus can drive performance in bullish markets, it may expose the portfolio to sector-specific risks. Investors might consider diversifying across more sectors to stabilize returns and reduce exposure to any single industry's volatility.

Regions Info

  • North America
    83%
  • Europe Developed
    1%

Geographically, the portfolio is heavily skewed towards North America, with over 83% of its assets in this region. This concentration reflects a strong reliance on the U.S. market, which can be advantageous given its economic strength but also exposes the portfolio to regional risks. The minimal exposure to other regions, such as Europe and Asia, limits the benefits of geographic diversification. Investors should consider increasing international exposure to mitigate risks associated with economic or political changes in North America and to capture growth opportunities in other markets.

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.

Utilizing the Efficient Frontier, this portfolio could potentially be optimized by adjusting the allocation among existing assets to achieve a better risk-return ratio. By reallocating investments, the portfolio might reach a more efficient point, balancing risk and return more effectively. However, this optimization is limited to the current assets and does not necessarily address diversification or other investment goals. Investors should assess whether the portfolio's current efficiency aligns with their risk tolerance and long-term objectives.

Ongoing product costs Info

  • Invesco EQQQ NASDAQ-100 UCITS ETF Acc 0.35%
  • iShares J.P. Morgan Emerging Markets Bond EUR Hedged UCITS 0.50%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.31%

The portfolio's total expense ratio (TER) is 0.31%, with the Vanguard S&P 500 ETF being the most cost-effective at 0.07%. Reducing costs is crucial for improving long-term returns, as fees can significantly erode gains over time. Investors should regularly review and compare the expense ratios of their holdings to ensure they are not overpaying for management fees. Exploring lower-cost alternatives or negotiating fees with financial advisors may help optimize the portfolio's net returns.

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