Growth-Oriented Portfolio with Strong US Focus and High Risk-Reward Potential for Ambitious Investors

Report created on Aug 2, 2024

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

The portfolio is heavily skewed towards ETFs, with a strong emphasis on US equities, particularly large-cap stocks. This composition suggests a growth-oriented strategy, aiming for capital appreciation. The inclusion of leveraged ETFs indicates a higher risk tolerance, as these can amplify both gains and losses. While there's a broad diversification across different ETFs, the concentration in US equities limits geographic diversification. This composition is suitable for those who are comfortable with short-term volatility in pursuit of long-term growth. To enhance diversification, consider balancing the US-heavy allocation with more international exposure.

Growth Info

Historically, this portfolio has delivered impressive returns with a CAGR of 22.26%. However, it's important to note the significant maximum drawdown of -38.52%, highlighting the portfolio's volatility. The fact that 90% of returns were achieved in just 20 days underscores the importance of timing and market conditions. This performance suggests that while the portfolio can generate substantial returns, it also requires a strong stomach for market fluctuations. To mitigate risks, consider implementing strategies like dollar-cost averaging or rebalancing to maintain desired risk levels and capitalize on market opportunities.

Projection Info

Using a Monte Carlo simulation with 1,000 simulations, the portfolio's future performance shows a wide range of outcomes. The 5th percentile projects a modest 37.45% return, while the median is a staggering 1,528.58%, and the 67th percentile reaches 2,918.49%. With 975 simulations showing positive returns, there's a strong likelihood of portfolio growth. The annualized return across simulations is 28.84%, indicating potential for substantial gains. However, the variability highlights the importance of risk management and diversification. To optimize future performance, consider adjusting asset allocations to balance risk and reward.

Asset classes Info

  • Stocks
    95%
  • Cash
    4%
  • Other
    1%

The portfolio is predominantly invested in stocks, comprising 94.77% of the allocation, with minimal exposure to cash, bonds, and other asset classes. This heavy stock allocation aligns with a growth-focused strategy but increases vulnerability to market volatility. Diversifying into bonds or other asset classes could provide stability and cushion against market downturns. Although stocks offer higher returns, incorporating fixed income could help manage risk and provide steady income. Consider gradually increasing bond allocation to enhance portfolio resilience without compromising growth potential.

Sectors Info

  • Technology
    37%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is heavily weighted towards technology, which makes up 36.52% of the portfolio. This concentration reflects a bet on tech-driven growth but also exposes the portfolio to sector-specific risks. Other major sectors include financial services and consumer cyclicals. While these sectors can drive growth, they also introduce volatility. A more balanced sector allocation could reduce risk and enhance stability. Consider diversifying into sectors like healthcare or consumer defensive to mitigate the impact of tech sector fluctuations and ensure a more balanced growth trajectory.

Regions Info

  • North America
    85%
  • Europe Developed
    6%
  • Asia Emerging
    3%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is overwhelmingly focused on North America, accounting for 85.27% of the allocation. This concentration limits exposure to international markets and potential global growth opportunities. While the US market has been a strong performer, diversifying into other regions could provide access to different economic cycles and reduce regional risk. Consider increasing exposure to emerging markets or developed regions outside North America to enhance global diversification and capitalize on international growth trends.

Redundant positions Info

  • ProShares Ultra Russell2000
    Avantis® U.S. Small Cap Value ETF
    High correlation
  • Vanguard S&P 500 ETF
    ProShares Ultra Dow30
    ProShares Ultra S&P500
    Invesco NASDAQ 100 ETF
    High correlation

The portfolio contains highly correlated assets, particularly among US-focused ETFs like ProShares Ultra Russell2000 and Avantis® U.S. Small Cap Value ETF, as well as Vanguard S&P 500 ETF and ProShares Ultra Dow30. This correlation reduces diversification benefits and increases vulnerability to market swings. By holding assets that move in tandem, the portfolio may not fully capitalize on diversification's risk-reducing potential. To enhance diversification, consider reducing exposure to overlapping assets and incorporating uncorrelated investments to improve risk management and optimize returns.

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.

Before optimizing, focus on reducing asset overlap to enhance diversification. Removing highly correlated assets can improve risk management and potential returns. To adjust risk levels, consider moving along the efficient frontier. A riskier portfolio could involve increasing exposure to leveraged ETFs, while a more conservative approach might involve adding bonds. This balance can help align the portfolio with personal risk tolerance and financial goals. Once diversification is optimized, further fine-tuning can enhance performance without compromising stability.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • ProShares Ultra Dow30 1.00%
  • Invesco NASDAQ 100 ETF 0.60%
  • ProShares Ultra S&P500 0.70%
  • ProShares Ultra Russell2000 0.80%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.20%

The portfolio's total dividend yield stands at 1.2%, with contributions from various ETFs like Vanguard Total International Stock Index Fund ETF Shares at 3.0%. While dividends provide a steady income stream, the yield is relatively modest given the portfolio's growth orientation. Increasing dividend-paying stocks or ETFs could enhance income generation without sacrificing growth potential. Consider balancing growth and income by incorporating more high-yield investments to bolster cash flow and provide stability during market downturns.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • ProShares Ultra Dow30 0.95%
  • Invesco NASDAQ 100 ETF 0.15%
  • ProShares Ultra S&P500 0.91%
  • ProShares Ultra Semiconductors 0.95%
  • ProShares Ultra Russell2000 0.95%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.34%

With a total expense ratio (TER) of 0.34%, the portfolio's costs are relatively low, benefiting overall returns. The Vanguard S&P 500 ETF boasts the lowest cost at 0.03%, while some leveraged ETFs have higher expenses. Keeping costs low is crucial for long-term growth, as high fees can erode returns. To maintain cost efficiency, consider reviewing and possibly reducing exposure to high-cost ETFs. Prioritizing low-cost investments can help maximize net returns and improve portfolio performance over time.

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