High-risk portfolio with a major bet on Bitcoin and solid US stock exposure
Report created on Aug 18, 2025Risk profile
6/7
Diversification profile
1/5
Positions
-
FB Fidelity Wise Origin Bitcoin Trust
FBTC - US3159481098 50.00% -
IT iShares Core S&P Total U.S. Stock Market ETF
ITOT - US4642871507 25.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 25.00%
The portfolio is notably aggressive, with half of its allocation in a Bitcoin ETF, reflecting a high-risk, high-reward strategy. The remainder is split evenly between broad U.S. stock market exposure and dividend-paying stocks. This structure suggests a focus on growth, particularly through cryptocurrency, while still maintaining a footing in traditional equities. The heavy weighting towards a single cryptocurrency asset class significantly narrows diversification, increasing the portfolio's volatility and risk profile.
Growth
Historical performance showcases a remarkable Compound Annual Growth Rate (CAGR) of 43.19%, though this comes with a substantial maximum drawdown of -23.67%. Such figures underline the portfolio's high-risk nature, with its success heavily reliant on the volatile cryptocurrency market. The performance also indicates that a few select days have driven the majority of returns, emphasizing the unpredictability and concentration of gains characteristic of aggressive investment strategies.
Projection
Monte Carlo simulations, projecting future performance based on historical data, suggest a wide range of outcomes, with a median increase of 6,441.8%. While all simulations predict positive returns, the vast disparity between the 5th and 67th percentiles (761.5% to 11,168.8%) highlights the extreme uncertainty in the portfolio's future success. This underscores the speculative nature of heavily weighting a portfolio towards Bitcoin.
Asset classes
- Other 50%
- Stocks 50%
The portfolio's assets are split evenly between "Other" (Bitcoin) and stocks, indicating a lack of traditional diversification across asset classes like bonds or real estate. This allocation could lead to higher volatility and risk, particularly due to the speculative nature of cryptocurrency. While stocks provide some balance, the absence of other asset classes misses opportunities for risk mitigation and steady income through interest or rents.
Sectors
- Technology 11%
- Health Care 6%
- Consumer Staples 6%
- Financials 6%
- Energy 6%
- Consumer Discretionary 5%
- Industrials 5%
- Telecommunications 3%
- Basic Materials 1%
- Real Estate 1%
- Utilities 1%
Sectoral allocation within the equities portion is relatively diversified, covering technology, healthcare, and consumer goods, among others. However, the overall portfolio's effectiveness in sector diversification is limited by the dominant position of Bitcoin. The sectors represented primarily through the U.S. stock ETFs suggest a conventional approach within the equity allocation, targeting growth and stability across various industries.
Regions
- North America 50%
Geographic exposure is heavily skewed towards North America, specifically the U.S., due to the nature of the ETFs chosen. This concentration risks magnifying the impact of regional economic downturns or policy changes on the portfolio's performance. Expanding geographic diversity could mitigate some risk and provide exposure to global growth opportunities, especially in emerging markets.
Market capitalization
- Large-cap 23%
- Mid-cap 13%
- Mega-cap 10%
- Small-cap 3%
- Micro-cap 1%
The market capitalization breakdown shows a preference for larger companies, with a significant portion in big, medium, and mega-cap stocks. This tilt towards larger companies may offer some stability relative to smaller caps, but it also limits potential upside from high-growth small and micro-cap stocks. Diversifying across market caps can enhance returns while managing 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.
Given the portfolio's aggressive stance and single-focus diversification, optimizing for the Efficient Frontier could involve reconsidering asset allocation to achieve a better risk-return balance. While the current setup may offer high returns, it comes with significant risk. Adjusting the allocation to include a wider range of asset classes and geographic exposure could enhance diversification and potentially improve the risk-adjusted return profile.
Dividends
- iShares Core S&P Total U.S. Stock Market ETF 1.20%
- Schwab U.S. Dividend Equity ETF 3.70%
- Weighted yield (per year) 1.22%
The dividend yield of 1.22% from the equity ETFs adds a modest income component to the portfolio, with the Schwab ETF contributing a higher yield due to its focus on dividend-paying stocks. While dividends provide a stream of income and potential for reinvestment, the portfolio's overall yield is relatively low, reflecting its growth-oriented strategy over income generation.
Ongoing product costs
- Fidelity Wise Origin Bitcoin Trust 0.25%
- iShares Core S&P Total U.S. Stock Market ETF 0.03%
- Schwab U.S. Dividend Equity ETF 0.06%
- Weighted costs total (per year) 0.15%
The portfolio's total expense ratio (TER) of 0.15% is impressively low, especially considering the inclusion of a specialized Bitcoin ETF. Keeping costs low is vital for maximizing long-term returns, as even small differences in fees can compound significantly over time. This cost efficiency is a positive aspect of the portfolio, supporting better performance relative to higher-cost alternatives.
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