Growth-oriented portfolio with a strong tilt towards technology and developed markets

Report created on May 5, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with a 70% allocation in a broad U.S. stock market ETF, 25% in an international developed market ETF, and a 5% specialization in the technology sector. This composition reflects a growth-oriented approach, leveraging the broad market's potential while seeking additional gains from international diversification and the tech sector's dynamism. The emphasis on ETFs suggests a preference for diversified, cost-effective investments, aligning with a moderate to high-risk tolerance given the portfolio's equity concentration.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.15%, with a significant drawdown of -34.51%. This performance, while robust, also underscores the inherent volatility associated with a growth-focused, equity-heavy portfolio. The days contributing most significantly to returns highlight the impact of short-term market movements on overall performance. Benchmarking against similar growth-oriented portfolios could provide further insight into its relative performance, especially during different market cycles.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of possible future outcomes, suggest a wide dispersion in potential portfolio values, with a median increase of 521%. While encouraging, it's crucial to remember that such projections are speculative, relying on past trends that may not predict future movements. The high percentile outcomes underscore the portfolio's growth potential, yet the broad range also highlights the risk of significant fluctuations.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks positions it firmly within the growth spectrum of investment strategies. This single-asset class focus enhances potential returns but also increases vulnerability to market volatility. Diversifying across different asset classes, such as bonds or real estate, could offer a buffer against stock market downturns, potentially smoothing out returns over time without drastically compromising growth objectives.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Industrials
    10%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

With a significant tilt towards technology (29%), followed by financial services and a mix of other sectors, the portfolio is well-positioned to capitalize on tech sector growth. However, this concentration also exposes it to sector-specific risks, such as regulatory changes or market sentiment shifts. Balancing sector allocations, while maintaining a focus on growth, could mitigate some of this risk, ensuring that the portfolio is less susceptible to single-sector downturns.

Regions Info

  • North America
    78%
  • Europe Developed
    14%
  • Japan
    5%
  • Australasia
    2%
  • Asia Developed
    1%

The geographic allocation heavily favors North America (78%), with modest exposure to Europe and Japan, and negligible investments in emerging markets. This distribution reflects a cautious approach to international diversification, focusing on developed economies. Expanding into emerging markets could offer higher growth potential and further diversification benefits, albeit with increased risk.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's emphasis on mega (43%) and big (30%) cap stocks underlines its growth orientation while leveraging the stability of large, established companies. Medium, small, and micro-cap stocks, although more volatile, could offer higher growth potential and further diversification. Rebalancing to include a broader market cap spectrum might enhance returns over the long term, albeit with added 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.

Utilizing the Efficient Frontier concept to assess the portfolio suggests that there might be opportunities for optimization, aiming for the best possible risk-return ratio. Adjusting allocations within the existing asset mix could potentially enhance returns for the same level of risk or reduce risk without significantly compromising returns. Regularly reviewing and adjusting the portfolio in line with these principles can help in maintaining an optimal balance.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.50%
  • iShares Core MSCI International Developed Market 2.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.66%

The portfolio's dividend yield averages 1.66%, contributing to total returns. While not the primary focus of a growth-oriented strategy, dividends offer a source of passive income and can provide a cushion during market dips. Balancing growth and income-producing assets could offer a more rounded approach, potentially smoothing returns while still targeting capital appreciation.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • iShares Core MSCI International Developed Market 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.04%

With an overall Total Expense Ratio (TER) of 0.04%, the portfolio benefits from low-cost ETFs, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, especially in a growth-oriented strategy where compound returns play a significant role. Continuously monitoring and minimizing investment costs will remain a key factor in enhancing portfolio performance.

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