A growth-focused portfolio with high North American exposure and significant tech sector concentration

Report created on Dec 28, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards ETFs, with a strong focus on the S&P 500 and Nasdaq-100 indices, comprising nearly 100% of the holdings. This structure indicates a single-focused approach, primarily targeting large-cap U.S. equities. While this can drive growth in bullish markets, it may lack diversification compared to more balanced portfolios. Diversification is crucial as it spreads risk across different asset types, reducing potential losses. Consider incorporating other asset classes like bonds or international equities to balance risk and return.

Growth Info

Historically, the portfolio has performed well, showing a compound annual growth rate (CAGR) of 19.11%. This impressive growth is partly due to the strong performance of U.S. equities in recent years. However, the maximum drawdown of -32.3% highlights the potential volatility and risk involved. It's important to remember that past performance doesn't guarantee future results. To mitigate risk, consider diversifying into less volatile assets, which can provide more stability during market downturns.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns, with a median (50th percentile) growth of 1,271.39%. While this indicates a strong potential for growth, it's important to note that simulations are based on historical trends and cannot predict future market conditions with certainty. To improve confidence in future projections, continue monitoring market trends and adjust allocations as needed to align with your risk tolerance and investment goals.

Asset classes Info

  • Stocks
    80%
  • Other
    20%

The portfolio is predominantly allocated to stocks, accounting for 80% of the holdings, with the remaining 20% classified as "Other." This heavy reliance on equities is typical for growth-focused portfolios but can lead to increased volatility. Diversification across different asset classes, such as bonds or real estate, can help mitigate risk and provide more stable returns. Consider gradually introducing alternative asset classes to enhance the portfolio's resilience against market fluctuations.

Sectors Info

  • Technology
    20%
  • Financials
    12%
  • Health Care
    10%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Consumer Staples
    6%
  • Telecommunications
    4%
  • Energy
    4%
  • Consumer Discretionary
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The portfolio is concentrated in the technology sector, representing over 20% of the holdings, followed by financial services and healthcare. This sectoral allocation mirrors common benchmarks but may expose the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. While tech-heavy portfolios can benefit from innovation-driven growth, they may also experience heightened volatility. Consider diversifying into other sectors to reduce reliance on any single industry.

Regions Info

  • North America
    79%

With over 79% exposure to North American equities, the portfolio is heavily concentrated in this region. This geographic focus aligns with the portfolio's emphasis on U.S. indices but limits exposure to other global markets. Geographic diversification can help reduce risk by spreading investments across different economic environments. Consider increasing allocations to other regions, such as Europe or Asia, to enhance diversification and capture growth opportunities in emerging markets.

Redundant positions Info

  • EasyETF - BNP Paribas Easy S&P 500 UCITS ETF
    Amundi Index Solutions - Amundi S&P 500 UCITS ETF C EUR
    High correlation

The portfolio contains highly correlated assets, particularly between the S&P 500 ETFs. High correlation means these assets tend to move together, which can limit diversification benefits. In market downturns, highly correlated assets can exacerbate losses. To improve diversification, consider replacing one of the S&P 500 ETFs with a different asset that offers lower correlation, such as international equities or fixed-income securities, to better balance the portfolio.

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 can potentially be optimized using the Efficient Frontier, which seeks to maximize returns for a given level of risk by adjusting asset allocations. However, before optimizing, it's crucial to address the high correlation between certain assets, as this limits diversification benefits. By replacing overlapping ETFs with less correlated assets, you can enhance the portfolio's efficiency, achieving a better risk-return balance without sacrificing growth potential.

Ongoing product costs Info

  • Amundi Index Solutions - Amundi S&P 500 UCITS ETF C EUR 0.15%
  • Amundi Nasdaq-100 UCITS USD 0.23%
  • EasyETF - BNP Paribas Easy S&P 500 UCITS ETF 0.12%
  • Amundi ETF PEA Nasdaq-100 UCITS ETF 0.23%
  • Weighted costs total (per year) 0.16%

The total expense ratio (TER) for the portfolio is a modest 0.16%, which is relatively low and advantageous for long-term growth. Low costs mean more of your money stays invested, compounding over time. This cost efficiency aligns well with best practices in portfolio management. However, regularly review the fees to ensure they remain competitive and consider replacing higher-cost funds with more affordable options if necessary to maximize 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