A growth-focused portfolio with high tech exposure and moderate diversification

Report created on Dec 29, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio comprises two ETFs, each at 40%, and a single stock at 20%. This composition leans heavily towards equities, indicating a focus on growth. Compared to typical balanced portfolios, this one is more aggressive, given its high equity exposure and lack of bonds or alternative assets. For greater diversification, consider adding different asset classes, such as fixed income or commodities, to mitigate risk and enhance stability during market downturns.

Growth Info

Historically, this portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 18.66%, which suggests strong growth. However, it also experienced a maximum drawdown of -32.9%, indicating significant volatility. While past performance is promising, remember that it doesn't guarantee future results. To potentially reduce volatility, consider diversifying across different asset classes or sectors, which can help cushion against sharp declines.

Projection Info

Using Monte Carlo simulations, which estimate future outcomes based on historical data, the portfolio shows a broad range of potential results. The median projection is a 938.16% return, but outcomes vary widely. It's crucial to understand that these simulations are not predictions but rather scenarios that illustrate potential risks and rewards. Consider maintaining a diversified approach to enhance the likelihood of achieving favorable results in various market conditions.

Asset classes Info

  • Stocks
    100%

Nearly 100% of the portfolio is allocated to stocks, with negligible allocations to cash and other assets. This heavy stock weighting suggests a high-risk, high-reward strategy typical of growth-focused portfolios. While this can lead to substantial returns, it also increases vulnerability to market swings. For a more balanced risk profile, consider incorporating other asset classes like bonds, which can provide stability and income.

Sectors Info

  • Technology
    32%
  • No data
    20%
  • Telecommunications
    10%
  • Financials
    9%
  • Consumer Discretionary
    8%
  • Industrials
    5%
  • Health Care
    5%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Real Estate
    1%
  • Energy
    1%
  • Basic Materials
    1%

The portfolio is heavily weighted towards technology, with 32.39% exposure, followed by communication services and financial services. This sector concentration can lead to higher volatility, especially in tech-driven market conditions. While tech can offer growth, consider diversifying into less volatile sectors like healthcare or consumer staples to reduce risk. A balanced sector allocation can enhance resilience against sector-specific downturns.

Regions Info

  • North America
    72%
  • No data
    20%
  • Europe Developed
    4%
  • Japan
    2%
  • Australasia
    1%

Geographically, the portfolio is predominantly exposed to North America, with 72.12%, and minimal exposure to other regions. This concentration may limit diversification benefits and increase susceptibility to regional economic shifts. To mitigate this risk, consider increasing exposure to other global markets, such as Europe or Asia, which can provide additional growth opportunities and reduce reliance on North American markets.

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.

Based on Efficient Frontier analysis, the portfolio could potentially be optimized for a better risk-return ratio by adjusting the current asset allocation. This involves reallocating within existing assets to achieve the most efficient balance between risk and return. However, remember that optimization is limited to current assets and doesn't inherently improve diversification or other investment goals.

Ongoing product costs Info

  • iShares NASDAQ 100 UCITS ETF USD (Acc) 0.36%
  • iShares Edge MSCI World Momentum Factor UCITS ETF 0.30%
  • Weighted costs total (per year) 0.26%

The portfolio's total expense ratio (TER) is 0.26%, which is relatively low, supporting better long-term returns by minimizing costs. Low fees are advantageous as they preserve more of the investment's growth. While the current cost structure is efficient, periodically review costs to ensure they remain competitive. Consider whether lower-cost alternatives, such as index funds, could further enhance cost-effectiveness without sacrificing performance.

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