Growth-Focused Portfolio with Moderate Diversification and High Technology Exposure

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

Growth Investors

This portfolio suits a growth-oriented investor with a high risk tolerance, seeking significant capital appreciation over time. Ideal for those with a long-term investment horizon, it capitalizes on the potential of technology and large-cap U.S. equities. This investor is comfortable with market volatility, understanding that substantial short-term fluctuations can lead to impressive long-term gains. The portfolio's limited geographic and sector diversification may appeal to those confident in the U.S. market's continued growth and technological innovation.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    52.95%
  • ProShares Ultra Semiconductors
    USD - US74347R6696
    22.88%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    11.42%
  • iShares Global Tech ETF
    IXN - US4642872919
    7.97%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    4.77%

The portfolio is heavily weighted towards ETFs, with the Vanguard S&P 500 ETF making up over half of the total allocation. This suggests a strong emphasis on broad market exposure, primarily through large-cap U.S. equities. The presence of ProShares Ultra Semiconductors and iShares Global Tech ETF indicates a significant tilt towards the technology sector, which can offer high growth potential but also increased volatility. The inclusion of the Vanguard Total International Stock Index Fund ETF Shares provides some international diversification, although it remains a small portion of the overall allocation. This composition reflects a growth-oriented strategy with moderate diversification.

Growth Info

Historically, the portfolio has delivered an impressive compound annual growth rate (CAGR) of 24.21%. However, this growth has come with a significant maximum drawdown of -59.8%, highlighting the portfolio's susceptibility to market downturns. The concentrated returns, with 90% of gains occurring over just 35 days, suggest a high level of volatility and reliance on key market movements. This performance pattern is typical for portfolios with substantial technology exposure, delivering strong returns during bull markets but facing sharp declines during periods of market stress.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's potential future performance was analyzed. This method uses random sampling to predict various outcomes based on historical data. The results show a wide range of potential end values, with the 5th percentile at a 44.79% return and the 67th percentile at 1,877.07%. The median outcome suggests a 975.95% return, with 977 simulations yielding positive results. The annualized return across simulations is 24.61%, indicating strong growth potential but also significant variability in outcomes.

Asset classes

  • Stocks
    96%
  • Cash
    4%
  • Other
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, accounting for over 96% of the total allocation. This heavy equity exposure aligns with the growth-focused strategy but also increases risk, particularly in volatile markets. The small cash position provides minimal liquidity, which may limit flexibility in responding to market changes. With such a high concentration in equities, the portfolio is poised for significant growth but may experience substantial fluctuations in value. Investors should be prepared for the potential for both high returns and high volatility.

Sectors

  • Technology
    52%
  • Financials
    9%
  • Health Care
    8%
  • Consumer Discretionary
    7%
  • Telecommunications
    6%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Technology dominates the sector allocation, comprising over half of the portfolio. This focus on tech stocks can drive substantial growth, given the sector's potential for innovation and expansion. However, it also exposes the portfolio to sector-specific risks, such as regulatory changes or market saturation. Other sectors like financial services, healthcare, and consumer cyclicals provide some diversification but remain relatively small components. A more balanced sector allocation could help mitigate risk and provide more stability during market downturns.

Regions

  • North America
    94%
  • Europe Developed
    3%
  • Asia Developed
    1%
  • Japan
    1%
  • Asia Emerging
    1%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

The geographic composition is overwhelmingly skewed towards North America, which accounts for over 93% of the portfolio. This concentration reflects a strong reliance on the U.S. market, potentially limiting exposure to growth opportunities in other regions. While the inclusion of international stocks offers some diversification, the allocation remains minimal. Expanding geographic diversification could help reduce risk by spreading investments across different economic environments and currency exposures, potentially enhancing long-term returns.

Redundant positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    iShares Global Tech ETF
    Vanguard S&P 500 ETF
    High correlation

The portfolio features highly correlated assets, particularly among the Vanguard Total Stock Market Index Fund ETF Shares, iShares Global Tech ETF, and Vanguard S&P 500 ETF. Such correlations suggest that these assets tend to move in tandem, potentially amplifying both gains and losses. While this can lead to strong returns during market upswings, it also increases vulnerability to downturns. To reduce risk, consider incorporating assets with lower correlations, which can provide more stability and smoother returns over time.

Dividends

  • iShares Global Tech ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 0.96%

The portfolio's dividend yield is modest at 0.96%, reflecting its growth-oriented focus. The Vanguard Total International Stock Index Fund ETF Shares contributes the highest yield at 3.0%, while other holdings like the Vanguard S&P 500 ETF offer lower yields. While dividends provide a steady income stream, the portfolio's emphasis on growth suggests a preference for capital appreciation over income generation. Investors seeking higher income may need to adjust the portfolio to include more dividend-focused assets.

Ongoing product costs

  • iShares Global Tech ETF 0.41%
  • ProShares Ultra Semiconductors 0.95%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.27%

The portfolio's total expense ratio (TER) is relatively low at 0.27%, indicating cost-efficient management. The Vanguard ETFs, with expense ratios as low as 0.03%, contribute significantly to keeping costs down. However, the ProShares Ultra Semiconductors ETF has a higher expense ratio of 0.95%, which could impact overall returns. Maintaining low costs is crucial for maximizing net returns, and investors should continue to monitor expenses to ensure they align with the portfolio's objectives and performance expectations.

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 current portfolio is not optimal due to overlapping, highly correlated assets. The efficient frontier concept suggests that an optimal portfolio maximizes returns for a given level of risk. In this case, the portfolio's heavy reliance on correlated tech stocks could lead to increased volatility without proportional returns. To enhance optimization, consider diversifying with assets that offer lower correlations, potentially improving the risk-return profile. However, given the portfolio's growth focus, some level of correlation may be acceptable to achieve desired outcomes.

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