Balanced portfolio with a strong focus on US equities and high dividend yields

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.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio is best suited for an investor with a balanced risk tolerance seeking growth through U.S. equities while also desiring income through dividends. The investor likely has a medium to long-term investment horizon, allowing them to weather market volatility inherent in a stock-heavy portfolio. The modest attempt at diversification through gold and international holdings suggests a cautious approach to risk management.

Positions

  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    20.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    20.00%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    20.00%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    20.00%
  • SPDR® Gold Shares
    GLD - US78463V1070
    5.00%
  • NEOS Nasdaq 100 High Income ETF
    QQQI - US78433H6751
    5.00%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF
    SPYI - US78433H3030
    5.00%
  • Vanguard International High Dividend Yield Index Fund ETF Shares
    VYMI - US9219467944
    5.00%

This portfolio is predominantly invested in U.S. equities, with a significant focus on large-cap growth and dividend-paying stocks, evidenced by its allocations to Schwab U.S. Dividend Equity ETF and Schwab U.S. Large-Cap Growth ETF. The inclusion of specialized ETFs like the Invesco S&P 500® Momentum ETF and the NEOS Nasdaq 100 High Income ETF indicates a strategy that seeks to capitalize on market momentum and income generation. The modest allocation to SPDR® Gold Shares introduces a non-equity asset class, albeit in a limited capacity, which suggests an attempt at diversification and inflation protection.

Warning Historical data is limited for this portfolio, which reduces the confidence in the calculated values.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 20.62%, this portfolio has demonstrated robust performance. The maximum drawdown of -17.23% indicates resilience during market volatility, although it's important to note that past performance is not indicative of future results. The concentration in high-performing sectors and asset classes has contributed to this strong performance, but investors should be cautious about extrapolating past trends far into the future without considering market dynamics.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Monte Carlo simulations, which use historical data to project potential future outcomes, show a wide range of possible returns for this portfolio. The 50th percentile outcome suggests a very optimistic scenario, but it's crucial to understand the limitations of these projections. They rely on past data and cannot account for unforeseen market shifts or global economic changes. Thus, while these projections are useful for planning, they should not be the sole basis for investment decisions.

Asset classes Info

  • Stocks
    95%
  • Other
    5%
  • Cash
    0%

The portfolio's asset class distribution, with 95% in stocks and 5% in other assets, leans heavily towards equities. This concentration enhances growth potential but also increases volatility and risk. Diversifying across more asset classes, such as fixed income or real estate, could provide more stability and reduce overall portfolio risk, especially in turbulent market conditions.

Sectors Info

  • Technology
    27%
  • Financials
    13%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Consumer Staples
    8%
  • Health Care
    8%
  • Industrials
    8%
  • Energy
    6%
  • Utilities
    2%
  • Basic Materials
    1%
  • Real Estate
    1%

Sector allocation shows a heavy emphasis on technology, financial services, and consumer cyclicals, which are sectors known for their growth potential but also for their volatility. This concentration could expose the portfolio to sector-specific risks. Broadening the sector exposure, including more defensive sectors like healthcare and utilities, could help mitigate these risks and add balance.

Regions Info

  • North America
    90%
  • Europe Developed
    3%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

The geographic allocation is heavily skewed towards North America, with minimal exposure to international markets. This concentration in the U.S. market has likely contributed to the portfolio's strong performance, given the market's past success. However, increasing global diversification could reduce risk and tap into growth opportunities in emerging and developed markets outside the U.S.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Unknown
    5%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's focus on mega and big-cap stocks aligns with its emphasis on stability and growth. These companies often offer more resilience during market downturns than their smaller counterparts. However, integrating a broader mix of medium, small, and micro-cap stocks could enhance potential returns, albeit with added risk.

Redundant positions Info

  • Invesco S&P 500® Momentum ETF
    Schwab U.S. Large-Cap Growth ETF
    NEOS Nasdaq 100 High Income ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    SHP ETF Trust - NEOS S&P 500 High Income ETF
    High correlation

The high correlation among certain ETFs in the portfolio, particularly those focused on U.S. equities, limits the benefits of diversification. This redundancy suggests that the portfolio could achieve similar returns with fewer holdings, reducing complexity and potentially lowering costs. Reevaluating these overlapping positions could improve the portfolio's efficiency.

Dividends Info

  • NEOS Nasdaq 100 High Income ETF 14.30%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.50%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 12.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 4.10%
  • Weighted yield (per year) 2.76%

The portfolio's dividend yield strategy, highlighted by the NEOS Nasdaq 100 High Income ETF and Vanguard International High Dividend Yield Index Fund ETF Shares, contributes to its income generation. This approach is beneficial for investors seeking regular income streams, but it's important to balance yield-seeking with growth potential and risk management.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • NEOS Nasdaq 100 High Income ETF 0.68%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 0.68%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
  • Weighted costs total (per year) 0.15%

With an overall Total Expense Ratio (TER) of 0.15%, the portfolio is cost-efficient, which is favorable for long-term growth. The varying costs across ETFs, from the low-cost Schwab U.S. Large-Cap Growth ETF to the higher-cost NEOS ETFs, underscore the importance of monitoring fees to maximize net 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.

The portfolio's current configuration suggests room for optimization, particularly by addressing the high correlation among its equity holdings. Aligning the portfolio closer to the Efficient Frontier could enhance returns for the same level of risk. This process involves adjusting asset allocations to reduce overlap and improve diversification, potentially leading to a more efficient risk-return profile.

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