A balanced portfolio with a focus on technology and large-cap stocks

Report created on Mar 29, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards the Vanguard S&P 500 ETF, which constitutes 50% of the holdings. Other significant components include a mix of ETFs focused on technology, growth, and dividends. This composition reflects a strong emphasis on U.S. equities, particularly large-cap stocks, aligning with a typical benchmark for balanced portfolios. However, the allocation lacks exposure to bonds or alternative investments, which could provide additional stability. Consider adding fixed-income assets to enhance diversification and reduce volatility.

Growth Info

Historically, the portfolio has delivered a solid Compound Annual Growth Rate (CAGR) of 11.49%, indicating robust performance. The maximum drawdown of -16.97% suggests moderate risk, aligning with the balanced risk profile. Compared to common benchmarks, this performance is impressive, showcasing the portfolio's ability to weather market fluctuations. Despite this, it's essential to remember that past performance doesn't guarantee future returns. Regularly reviewing and adjusting the portfolio can help maintain its strong performance in changing market conditions.

Projection Info

Forward projections using Monte Carlo simulations suggest an annualized return of 12.17%, with a high likelihood of positive outcomes. Monte Carlo analysis uses historical data to simulate potential future performance, providing a range of possible outcomes. While the projections are optimistic, they rely on past data and assumptions that may not hold. Continuous monitoring and adapting to market changes are crucial to achieving projected returns. Consider stress-testing the portfolio under different scenarios to better understand potential risks.

Asset classes Info

  • Stocks
    98%
  • No data
    2%

The portfolio is predominantly composed of stocks, accounting for 98% of the allocation, with minimal exposure to other asset classes. This heavy reliance on equities can lead to higher volatility, especially in market downturns. A more diversified allocation, including bonds or real estate, could provide a buffer against market swings and enhance overall stability. Balancing equity exposure with other asset classes may improve risk-adjusted returns and align better with a balanced investment strategy.

Sectors Info

  • Technology
    33%
  • Financials
    12%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Health Care
    10%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio has a significant allocation to the technology sector, making up 33% of the holdings. This concentration can lead to increased volatility, particularly during periods of tech market instability. While tech stocks have driven past gains, diversification across sectors can mitigate risks. Consider reducing tech exposure and increasing allocations to sectors like healthcare or industrials to balance potential downturns in tech. A more evenly distributed sector allocation can enhance long-term stability and growth.

Regions Info

  • North America
    90%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

With 90% of the portfolio concentrated in North America, geographic diversification is limited. This focus can expose the portfolio to regional economic risks. Expanding exposure to international markets, particularly in emerging economies, can enhance diversification and capture growth opportunities outside the U.S. Consider increasing allocations to Europe, Asia, or Latin America to reduce dependency on the North American market and potentially improve risk-adjusted returns.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    36%
  • Mid-cap
    16%
  • Small-cap
    1%

The portfolio is heavily weighted towards mega and big-cap stocks, comprising 80% of the allocation. While large-cap stocks offer stability and established growth, they may limit exposure to higher growth opportunities found in smaller companies. Including more mid and small-cap stocks could enhance diversification and provide access to potentially higher returns. A more balanced market capitalization allocation can capture a broader range of market dynamics and improve overall portfolio performance.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Vanguard S&P 500 ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    SPDR® Portfolio S&P 500 Growth ETF
    High correlation

The portfolio contains highly correlated assets, particularly among the large-cap U.S. equity ETFs. High correlation means these assets tend to move in the same direction, limiting diversification benefits. During market downturns, this can exacerbate losses. To improve diversification, consider replacing some of these ETFs with less correlated assets, such as international or sector-specific funds. This adjustment can help manage risk and enhance the portfolio's resilience to market volatility.

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 portfolio could benefit from optimization using the Efficient Frontier, a concept that seeks the best possible risk-return ratio. The current allocation might not fully exploit diversification benefits due to high asset correlation. By adjusting allocations among existing assets, the portfolio can potentially achieve a better balance between risk and return. This process involves re-evaluating asset weights to enhance efficiency without necessarily changing the overall investment strategy. Regularly reassessing the portfolio can ensure it remains aligned with optimal risk-return dynamics.

Dividends Info

  • JPMorgan Nasdaq Equity Premium Income ETF 10.90%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 2.90%
  • SPDR® Portfolio S&P 500 Growth ETF 0.70%
  • Vanguard S&P 500 ETF 1.00%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.29%

The portfolio's average dividend yield is 2.29%, with significant contributions from the JPMorgan Nasdaq Equity Premium Income ETF and Schwab U.S. Dividend Equity ETF. Dividends provide a steady income stream and can enhance total returns, particularly in volatile markets. For income-focused investors, maintaining or increasing dividend-paying assets can be beneficial. Consider reviewing the dividend yield regularly to ensure it aligns with income goals and adjust allocations as needed to optimize income generation.

Ongoing product costs Info

  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR® Portfolio S&P 500 Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.08%

The portfolio boasts a low Total Expense Ratio (TER) of 0.08%, which is commendable. Lower costs mean more of your investment's returns stay in your pocket, enhancing long-term performance. This cost efficiency is a strong advantage, aligning with best practices for maximizing returns. Regularly reviewing and optimizing costs can further improve net returns. Maintain focus on low-cost investment options to sustain this advantage and consider reallocating to cheaper alternatives if costs rise.

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