This portfolio has only about 3.8 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced Portfolio with Low Diversity and High Technology Exposure

Report created on Jul 27, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio primarily consists of ETFs, with Vanguard S&P 500 ETF making up 50%, Avantis U.S. Small Cap Value ETF at 20%, Invesco NASDAQ 100 ETF at 20%, and Schwab U.S. Dividend Equity ETF at 10%. This composition shows a strong bias towards large-cap U.S. stocks, with a minor allocation to small-cap and dividend-focused equities. The low diversity indicates a significant concentration risk, primarily in the U.S. market. To mitigate this, it would be beneficial to consider adding more diverse asset classes to balance the risk.

Growth Info

Historically, the portfolio has performed well, with a CAGR of 16.09% and a maximum drawdown of -23.69%. This indicates robust growth potential but also highlights vulnerability to market downturns. The fact that 20 days make up 90% of the returns suggests high volatility. To enhance stability, it would be prudent to introduce assets with lower volatility, such as bonds or other fixed-income securities, which can cushion against market swings.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows promising potential. The 5th percentile projects a 165.74% return, while the median (50th percentile) is 796.12%, and the 67th percentile reaches 1,165.62%. Nearly all simulations (998 out of 1,000) resulted in positive returns, with an annualized return of 18.77%. This suggests a high probability of substantial growth, but diversification could further enhance these projections by reducing risk.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.90% in equities and a negligible amount in cash. This high equity exposure aligns with a growth-oriented strategy but increases susceptibility to market volatility. Introducing other asset classes, such as bonds or commodities, could provide better risk-adjusted returns. A more balanced allocation would help in achieving a steadier growth trajectory, especially during market downturns.

Sectors Info

  • Technology
    27%
  • Financials
    14%
  • Consumer Discretionary
    13%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Energy
    6%
  • Basic Materials
    3%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation shows a significant concentration in Technology (27.10%), followed by Financial Services (13.60%) and Consumer Cyclicals (12.64%). This heavy tech focus can drive high returns but also adds sector-specific risk. To mitigate this, diversifying into underrepresented sectors like Utilities or Real Estate could provide more stability. A more even sector distribution would help in reducing the impact of sector-specific downturns.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographically, the portfolio is overwhelmingly concentrated in North America (98.63%), with minimal exposure to other regions. This lack of geographic diversification exposes the portfolio to regional risks, such as economic downturns or political instability in the U.S. Expanding the geographic allocation to include more exposure to Europe, Asia, and other emerging markets could provide a hedge against regional risks and enhance overall returns.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Invesco NASDAQ 100 ETF 0.70%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.46%

The portfolio includes the Schwab U.S. Dividend Equity ETF, which provides some dividend income. However, the overall dividend yield is not specified, indicating that the focus is more on capital appreciation rather than income generation. For investors seeking steady income, increasing the allocation to dividend-paying stocks or ETFs could be a viable strategy. This would provide a more balanced approach, combining growth with income.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.10%

The total expense ratio (TER) of the portfolio is relatively low at 0.1%, which is advantageous for long-term growth. Lower costs mean more of the returns are retained, enhancing overall performance. However, it's essential to continuously monitor these costs and ensure that they remain competitive. Keeping investment costs low is a fundamental principle of sound investing, as it directly impacts net returns.

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