A growth-focused portfolio with high exposure to US technology and healthcare sectors

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, aiming for substantial capital appreciation. The focus on large-cap US equities and technology sectors suggests a preference for significant growth potential. An investor with a long-term horizon, willing to withstand market volatility for the possibility of higher returns, would find this portfolio appealing. However, this approach may not suit those seeking income or lower-risk investments.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    60.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    30.00%
  • Eli Lilly and Company
    LLY - US5324571083
    5.00%
  • NVIDIA Corporation
    NVDA - US67066G1040
    5.00%

This portfolio is heavily weighted towards ETFs, with the Vanguard S&P 500 ETF making up 60% and the Invesco NASDAQ 100 ETF 30%. It also includes individual stocks like Eli Lilly and NVIDIA, each comprising 5%. Compared to a typical balanced portfolio, this composition is concentrated, primarily in large-cap US equities. While ETFs provide diversification across numerous stocks, the high concentration in these two ETFs limits exposure to other asset classes. To improve diversification, consider adding fixed-income securities or international equities to balance the portfolio's risk profile.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 19.57%, significantly outperforming many traditional benchmarks. However, it also experienced a maximum drawdown of -27.38%, indicating potential volatility. This performance suggests a capacity for high returns but also highlights the risk associated with the current allocation. To mitigate potential future volatility, consider rebalancing the portfolio to include more defensive assets or sectors that may perform well during downturns.

Projection Info

Using Monte Carlo simulations, which apply historical data to predict future outcomes, the portfolio's potential future performance was analyzed. The simulations indicate an impressive median return projection of 7,299.1% and a high probability of positive returns. However, these projections are based on past data and are not guarantees. To prepare for various market conditions, consider maintaining a flexible strategy that can adapt to changing economic environments, possibly by incorporating more diverse asset classes.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio consists entirely of stocks, with no allocation to cash or bonds. This single asset class focus amplifies potential returns but also increases risk. In comparison, a more balanced portfolio might include bonds or other fixed-income assets to provide stability and income. Diversifying into multiple asset classes can help cushion against market volatility and provide more consistent returns over time, especially during equity market downturns.

Sectors Info

  • Technology
    40%
  • Health Care
    13%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Financials
    8%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The portfolio is heavily invested in technology (40%) and healthcare (13%), with smaller allocations across other sectors. This concentration could lead to higher volatility, especially during periods of sector-specific downturns. For example, technology-heavy portfolios may experience fluctuations due to interest rate changes. To mitigate this risk, consider diversifying further into sectors like consumer staples or utilities, which traditionally exhibit less volatility and can offer stability.

Regions Info

  • North America
    99%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%

Geographically, the portfolio is almost entirely concentrated in North America, with a 99% allocation. This focus limits exposure to international markets, which could provide additional diversification and potential growth opportunities. By incorporating more global equities, especially from emerging markets, the portfolio could benefit from different economic cycles and reduce reliance on the US market. This adjustment could also help hedge against domestic economic downturns.

Market capitalization Info

  • Mega-cap
    54%
  • Large-cap
    32%
  • Mid-cap
    14%
  • Small-cap
    0%

The portfolio is primarily invested in mega-cap (54%) and big-cap (32%) stocks, with minimal exposure to medium and small-cap companies. While large-cap stocks are generally more stable, smaller companies can offer higher growth potential. To enhance diversification and capture potential growth, consider adding small or mid-cap stocks. This approach can provide a balance between stability and growth, potentially improving long-term returns.

Dividends Info

  • Eli Lilly and Company 0.60%
  • Invesco NASDAQ 100 ETF 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.93%

The portfolio's overall dividend yield is 0.93%, with contributions from Eli Lilly, Invesco NASDAQ 100 ETF, and Vanguard S&P 500 ETF. While dividends provide a steady income stream, this yield is relatively modest. For investors seeking income, consider increasing exposure to dividend-focused investments, which can offer more substantial yields. Balancing growth and income can help achieve a more stable return profile, especially during market volatility.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, primarily due to the low-cost Vanguard S&P 500 ETF. Keeping costs low is crucial for long-term performance, as fees can significantly erode returns over time. This cost efficiency is a strength of the portfolio, allowing more of the investment's returns to be retained. Continue to monitor expense ratios and opt for low-cost investment options where possible 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 can be optimized using the Efficient Frontier to achieve a better risk-return ratio. The analysis suggests that an optimized portfolio could yield a higher expected return of 50.71% with a comparable risk level. This optimization involves reallocating current assets to achieve the best possible balance between risk and return. While this approach focuses on maximizing returns, ensure it aligns with your risk tolerance and investment goals.

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