A growth-focused portfolio with a strong tech tilt and moderate international exposure

Report created on Jan 28, 2025

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 weighted towards equities, with 100% allocation in stocks. The Vanguard Total Stock Market Index Fund ETF dominates the portfolio at 70%, while the iShares Core MSCI International Developed Market accounts for 20%, and the Fidelity MSCI Information Technology Index ETF holds 10%. This composition suggests a focus on broad market exposure with a significant tilt towards technology. Compared to a typical benchmark, this portfolio is less diversified, lacking fixed income or alternative assets. Consider adding other asset classes to balance risk and improve stability, especially during volatile market conditions.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 14.54%. However, it experienced a maximum drawdown of -34.39%, indicating vulnerability during market downturns. While the high returns are attractive, the drawdown highlights potential risks. Comparing to a benchmark, the portfolio's performance aligns with growth-focused strategies but lacks downside protection. To mitigate risk, consider incorporating defensive assets or strategies that can provide stability in turbulent times.

Projection Info

Using Monte Carlo simulations, which model potential future outcomes based on historical data, the portfolio shows promising growth prospects. The median forecast projects a 588.9% return, with 995 out of 1,000 simulations yielding positive outcomes. However, the 5th percentile suggests a potential downside of 85.1%. While these projections are encouraging, it's important to remember that they are based on past performance and assumptions. Regularly reviewing and adjusting the portfolio can help in navigating future uncertainties and aligning with evolving market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking diversification across asset classes. This single asset class focus may lead to increased volatility and risk, particularly during market downturns. Compared to diversified benchmarks, this allocation may not provide sufficient risk mitigation. To enhance diversification, consider introducing other asset classes such as bonds or real estate. This can help balance the risk-return profile and provide a buffer against equity market fluctuations.

Sectors Info

  • Technology
    34%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is heavily concentrated in the technology sector, which accounts for 34% of the allocation. Other sectors like financial services and consumer cyclicals are represented but to a lesser extent. This tech-heavy focus aligns with growth objectives but may lead to increased volatility, especially during interest rate changes. Compared to benchmarks, the sector allocation is skewed towards technology. Diversifying into other sectors could reduce risk and provide stability, particularly if technology faces headwinds.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is predominantly focused on North America, with 82% allocation, while Europe and Japan make up smaller portions. This concentration in North America may limit exposure to growth opportunities in other regions. Compared to global benchmarks, the portfolio is underexposed to emerging markets. Expanding geographic diversification could capture growth in emerging economies and reduce reliance on any single region's performance.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization is skewed towards mega and large-cap stocks, comprising 73% of the allocation. This focus on larger companies may offer stability but could limit exposure to potentially higher growth from small and mid-cap stocks. Compared to benchmarks, the portfolio may benefit from including more small-cap stocks to enhance growth potential. Balancing market capitalization exposure can improve diversification and capture a broader range of market 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 could potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio for a given level of risk. This approach considers rebalancing the current assets to achieve an optimal mix. While the portfolio is growth-focused, exploring optimization can help in achieving a more balanced risk-return profile. Keep in mind that optimization is based on historical data and assumptions, so regular reviews and adjustments are essential to maintaining alignment with investment goals.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • iShares Core MSCI International Developed Market 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.22%

The portfolio's dividend yield is 1.22%, with the highest contribution from the iShares Core MSCI International Developed Market at 1.70%. Dividends can provide a steady income stream, which is beneficial for compounding returns over time. However, the focus on growth and technology may limit dividend income. If income is a priority, consider incorporating higher-yielding assets to balance growth and income objectives.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • iShares Core MSCI International Developed Market 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio's Total Expense Ratio (TER) is impressively low at 0.04%, which supports better long-term performance by minimizing costs. Each of the ETFs in the portfolio has low individual expense ratios, contributing to overall cost efficiency. Compared to typical benchmarks, this low-cost structure is a positive aspect, enhancing net returns. Continue to monitor expenses to ensure they remain competitive, as minimizing costs is a key factor in achieving optimal portfolio performance.

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