A tech-heavy portfolio with strong North American focus and high historical returns

Report created on Jan 26, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of three ETFs, with SPDR MSCI ACWI IMI holding the largest share at 50%. The remaining 50% is split equally between the iShares S&P 500 Information Technology Sector and the Invesco S&P 500 ETFs. This composition leans heavily towards equities, particularly in the technology sector. While it aligns with a balanced risk profile, the concentration in tech could introduce sector-specific risks. Broad diversification across sectors and regions is recommended to mitigate these risks and enhance stability.

Growth Info

Historically, the portfolio has shown impressive performance with a Compound Annual Growth Rate (CAGR) of 16.45%. This figure suggests strong growth potential, especially when compared to typical market benchmarks. However, it's important to note the portfolio's maximum drawdown of -29.19%, indicating potential volatility. While past performance is encouraging, it doesn't guarantee future results. Regularly reviewing the portfolio to align with changing market conditions is advisable to maintain this growth trajectory.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a wide range of potential returns. With a median expected return of 935.7% and 999 out of 1,000 simulations showing positive outcomes, the portfolio's future looks promising. However, the variability in projections underscores the importance of diversification to manage risk. It's crucial to remember that simulations are based on historical trends and can't predict future market conditions with certainty.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, which can offer high growth potential but also come with increased volatility. Compared to a typical balanced portfolio, this allocation lacks exposure to fixed income or other asset classes, which could provide stability. Incorporating bonds or alternative investments might reduce volatility and improve risk-adjusted returns, aligning more closely with a balanced investment strategy.

Sectors Info

  • Technology
    46%
  • Financials
    11%
  • Consumer Discretionary
    8%
  • Health Care
    8%
  • Industrials
    7%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

With 46% of the portfolio allocated to technology, there's a significant sector concentration. While tech has driven substantial growth recently, it can also be subject to higher volatility, especially during interest rate changes. The remaining sectors, including financial services and consumer cyclicals, offer some diversification. Balancing sector exposure could help mitigate risks associated with tech downturns, providing a more stable growth path.

Regions Info

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

The portfolio is heavily weighted towards North America, comprising 84% of its geographic allocation. This concentration could expose it to regional risks, such as economic downturns in the U.S. and Canada. While North America has been a strong performer, diversifying into other regions like Europe or emerging markets could reduce risk and enhance long-term growth potential. A more balanced geographic allocation aligns with global diversification standards.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    32%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is dominated by mega-cap stocks at 49%, followed by large caps at 32%. This focus on larger companies can provide stability and lower volatility. However, the limited exposure to small and micro-cap stocks might miss out on higher growth opportunities typically associated with these segments. Increasing allocation to smaller companies could enhance diversification and potentially boost returns, albeit with higher risk.

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 current portfolio could potentially be optimized for better risk-return balance using the Efficient Frontier concept. This involves adjusting the asset weights to achieve the best possible returns for the given level of risk. While the portfolio already performs well, exploring optimization strategies could further enhance returns. It's crucial to remember that optimization is based on historical data and assumptions, which may not hold in the future.

Ongoing product costs Info

  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • SPDR MSCI ACWI IMI 0.40%
  • Invesco S&P 500 UCITS ETF 0.05%
  • Weighted costs total (per year) 0.25%

With a total expense ratio (TER) of 0.25%, the portfolio's costs are reasonably low, supporting better long-term performance. Lower fees mean more of the investment returns stay in the portfolio, compounding over time. Maintaining this cost efficiency is key, but it's also worth exploring if similar exposure can be achieved with even lower-cost options. Regularly reviewing and optimizing cost structures can enhance net returns.

What next?

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey