A growth-oriented portfolio with a strong technology focus and limited geographic diversification

Report created on Dec 14, 2024

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 heavily weighted towards the Vanguard S&P 500 UCITS ETF, which makes up 75% of the holdings. The iShares S&P 500 Information Technology Sector ETF accounts for 15%, while the iShares Core MSCI Emerging Markets ETF covers the remaining 10%. This allocation indicates a strong focus on U.S. equities, particularly in the technology sector. Such concentration can lead to substantial growth potential but also increases exposure to market volatility. Balancing this with other asset classes or regions could provide more stability.

Growth Info

Historically, this portfolio has delivered impressive returns, with a compound annual growth rate (CAGR) of 17.26%. However, it has also experienced significant volatility, as evidenced by a maximum drawdown of 25%. This means that while the portfolio has the potential for high returns, it can also suffer from substantial declines during market downturns. Investors should be prepared for this level of risk and consider whether it aligns with their financial goals and risk tolerance.

Projection Info

The Monte Carlo simulation, which uses historical data to predict potential future outcomes, suggests a wide range of possible returns. With 1,000 simulations, the portfolio's end values range from a 5th percentile of 120.43% to a 67th percentile of 1,020.93%. The median outcome is 723.68%, indicating strong potential growth. However, it's crucial to remember that these simulations are based on past performance and assumptions, which may not accurately predict future market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is almost entirely composed of stocks, with a negligible amount in cash. This high equity exposure offers the potential for significant capital appreciation but also increases vulnerability to market fluctuations. A more diversified allocation, including bonds or other asset classes, could provide a buffer against volatility and enhance risk-adjusted returns. Investors should assess whether the current allocation aligns with their risk tolerance and investment strategy.

Sectors Info

  • Technology
    42%
  • Financials
    12%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The portfolio is heavily concentrated in the technology sector, which accounts for over 42% of the holdings. Other sectors, like financial services and consumer cyclicals, have much smaller allocations. This concentration in technology can lead to substantial gains during periods of tech sector growth but also exposes the portfolio to sector-specific risks. Diversifying across a broader range of sectors could reduce volatility and enhance long-term stability.

Regions Info

  • North America
    89%
  • Asia Emerging
    5%
  • Asia Developed
    3%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Developed
    1%

Geographically, the portfolio is predominantly focused on North America, with nearly 90% of its assets allocated there. This limited geographic diversification may leave the portfolio vulnerable to regional economic downturns. Expanding exposure to other regions, such as Europe or emerging markets, could provide a hedge against North American market fluctuations and offer additional growth opportunities.

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.

The portfolio's current allocation could potentially be optimized using the Efficient Frontier, which seeks the best risk-return balance. By adjusting the weights of existing assets, investors might achieve a more favorable risk-return ratio. However, this optimization is limited to the current selection of assets and does not consider adding new ones. The focus should be on achieving the most efficient use of the current assets to maximize returns for a given level of risk.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets IMI UCITS 0.18%
  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is relatively low at 0.09%, which is beneficial for long-term investors. Lower costs mean more of the portfolio's returns are retained, enhancing compounding over time. However, it's always worth reviewing expense ratios periodically to ensure they remain competitive. Reducing costs further, if possible, could improve net returns, especially over extended investment horizons.

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