A highly diversified growth-focused portfolio with significant exposure to US equities

Report created on Jan 13, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed primarily of ETFs, with a strong emphasis on equities, making up 79.5% of the allocation. Real estate also plays a significant role at 20%. The asset mix leans towards growth, with a considerable portion in the Vanguard S&P 500 ETF, representing 45% of the portfolio. This composition aligns well with common growth-focused benchmarks, offering a balanced approach with a tilt towards US large-cap stocks. The inclusion of real estate adds a layer of diversification, which can mitigate risk. To further optimize, consider periodically rebalancing to maintain desired allocations as market conditions change.

Growth Info

Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 12.38%, indicating robust performance over time. The maximum drawdown of -35.34% highlights the volatility inherent in a growth-focused strategy. While these figures are promising, it's crucial to remember that past performance doesn't guarantee future results. Comparing with a benchmark like the S&P 500, this portfolio has performed competitively, demonstrating its potential for high returns. To manage risk, consider incorporating strategies like dollar-cost averaging, which can help mitigate the impact of market volatility on long-term performance.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with a median return of 350.89% over the investment horizon. The Monte Carlo method uses historical data to simulate thousands of potential future paths, providing a probabilistic view of potential returns. While the median outcome is promising, the range of possibilities underscores the inherent uncertainty in investing. To navigate this, maintain a diversified portfolio and stay informed about market trends. Regularly reviewing and adjusting your portfolio can help you stay aligned with your investment goals.

Asset classes Info

  • Stocks
    80%
  • Real Estate
    20%

The portfolio's allocation across asset classes is primarily concentrated in stocks and real estate, with minimal exposure to cash and other assets. This focus on equities aligns with a growth-oriented strategy, aiming for higher returns over time. Real estate's 20% allocation provides an additional layer of diversification, potentially smoothing out volatility. Compared to typical benchmarks, this allocation is well-balanced for a growth-focused investor. To enhance diversification, consider exploring alternative asset classes, such as bonds, which could provide stability during market downturns.

Sectors Info

  • Technology
    28%
  • Real Estate
    22%
  • Financials
    10%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%

Sector allocation reveals a significant concentration in technology (28.4%) and real estate (22.1%), with diversified exposure across other sectors. This tech-heavy allocation can lead to higher volatility, especially during economic shifts affecting tech industries. However, it also offers potential for substantial growth, given the sector's historical performance. The spread across financial services, consumer cyclicals, and industrials further diversifies risk. To mitigate sector-specific risks, regularly review sector allocations and adjust as needed to maintain a balanced exposure that aligns with market conditions and personal risk tolerance.

Regions Info

  • North America
    84%
  • Europe Developed
    7%
  • Asia Developed
    3%
  • Asia Emerging
    2%
  • Japan
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, with 83.8% exposure, primarily through US equities. This concentration can lead to regional risk, particularly if the US market experiences downturns. The remaining allocation is spread across Europe, Asia, and other regions, providing some international diversification. This geographic mix aligns with many US-based benchmarks but could benefit from increased exposure to emerging markets for growth potential. Regularly assess geographic allocations to ensure they align with your investment goals and risk appetite, considering global economic conditions.

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 can be optimized along the Efficient Frontier, which balances risk and return for the given asset mix. This optimization involves adjusting allocations to achieve the best possible risk-return ratio, enhancing potential returns for a given level of risk. While the current mix is growth-focused, consider if slight adjustments could improve efficiency. Regularly reviewing and rebalancing the portfolio can help maintain alignment with the Efficient Frontier, ensuring that you are maximizing returns relative to the risk you are willing to take.

Dividends Info

  • VanEck Semiconductor ETF 0.40%
  • Vanguard Small-Cap Index Fund ETF Shares 1.30%
  • Vanguard Real Estate Index Fund ETF Shares 4.00%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.06%

With a total dividend yield of 2.06%, the portfolio provides a modest income stream, primarily from the Vanguard Real Estate Index Fund ETF Shares, offering a 4% yield. Dividends can be an essential component of total returns, especially in volatile markets, offering a buffer against price fluctuations. For growth-focused investors, reinvesting dividends can enhance compounding over time. Consider whether the current yield aligns with your income needs and investment goals. If income is a priority, explore options to increase dividend exposure while maintaining overall portfolio balance.

Ongoing product costs Info

  • VanEck Semiconductor ETF 0.35%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio boasts an impressively low total expense ratio (TER) of 0.09%, thanks to the cost-effective nature of Vanguard ETFs. Low costs are crucial for long-term performance, as they minimize the drag on returns. Compared to industry averages, this portfolio is well-positioned to maximize net returns over time. While the current cost structure is efficient, periodically review fees associated with any new investments or changes in the portfolio to ensure they remain competitive. Consider replacing higher-cost funds with lower-cost alternatives if necessary.

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