Balanced US-focused portfolio with strong dividend yield and tech sector concentration

Report created on Feb 10, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists of three ETFs: Pacer US Cash Cows 100, Schwab U.S. Dividend Equity, and Invesco PHLX Semiconductor. The Pacer and Schwab ETFs each hold a 40.24% allocation, while the Invesco ETF accounts for 19.51%. This composition leans heavily towards established US companies, with a total stock allocation of 100%. Compared to a typical balanced benchmark, this portfolio is less diversified due to its concentration in equities. To enhance diversification, consider incorporating other asset classes like bonds or real estate investment trusts (REITs) that can provide stability during market fluctuations.

Growth Info

Historically, the portfolio has achieved a CAGR of 10.78%, indicating strong growth over time. However, it experienced a maximum drawdown of -20.83%, highlighting potential volatility. This performance surpasses many traditional benchmarks, reflecting the portfolio's focus on growth-oriented and dividend-paying stocks. While past performance is not indicative of future results, maintaining a diversified approach can help mitigate risks. Consider gradually rebalancing to maintain alignment with long-term goals, especially during periods of market turbulence.

Projection Info

Utilizing Monte Carlo simulations, the portfolio's potential future outcomes were projected based on historical data. The simulations suggest a median return of 312.2% and an optimistic 67th percentile of 494.1% over the investment horizon. However, the 5th percentile indicates a possible decline of -5.9%, underscoring the inherent uncertainty in projections. While these simulations provide valuable insights, they rely on past data and assumptions that may not hold. Regularly reviewing asset allocations and adjusting based on market conditions can help align with desired risk and return profiles.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is entirely in stocks, lacking diversification across asset classes. This concentration can lead to increased volatility, especially during market downturns. A more balanced portfolio typically includes a mix of stocks, bonds, and alternative investments. By introducing fixed-income securities or other non-correlated assets, you can potentially reduce risk and achieve more stable returns. Consider gradually incorporating these asset classes to create a more resilient investment strategy.

Sectors Info

  • Technology
    31%
  • Energy
    14%
  • Health Care
    13%
  • Consumer Discretionary
    12%
  • Consumer Staples
    9%
  • Financials
    7%
  • Industrials
    7%
  • Telecommunications
    4%
  • Basic Materials
    2%

The portfolio has a strong concentration in the technology sector, comprising 31% of the total allocation. This focus can lead to higher volatility, particularly during periods of tech sector instability. While tech stocks have driven impressive growth, they can also be sensitive to interest rate changes and regulatory shifts. Balancing this exposure with investments in other sectors like consumer defensive or healthcare can enhance stability. Regularly reviewing sector allocations can help maintain a diversified approach aligned with market trends.

Regions Info

  • North America
    97%
  • Europe Developed
    2%
  • Asia Developed
    1%

With 97% of assets concentrated in North America, the portfolio has limited geographic diversification. This focus may expose the portfolio to regional economic risks, such as regulatory changes or economic downturns in the US. Including more international exposure, particularly in emerging markets, can provide diversification benefits and access to different growth opportunities. Consider gradually increasing allocations to regions outside North America to mitigate geographic concentration risks.

Market capitalization Info

  • Large-cap
    42%
  • Mid-cap
    31%
  • Small-cap
    18%
  • Mega-cap
    8%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a healthy mix: 42% in large-cap, 31% in mid-cap, and 18% in small-cap stocks. This distribution offers a balance of stability and growth potential. Large-cap stocks provide stability, while mid- and small-cap stocks offer growth opportunities. However, the 8% allocation in mega-cap stocks and 1% in micro-cap stocks could be adjusted to better align with risk tolerance. Regularly reviewing market cap allocations ensures the portfolio remains balanced and aligned with investment goals.

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 shows potential for optimization using the Efficient Frontier, which seeks the best possible risk-return ratio. By adjusting the current allocations among the existing ETFs, it may be possible to enhance returns without increasing risk. This approach focuses on achieving an optimal balance between risk and reward, rather than adding new assets. Regularly revisiting the portfolio's allocation can ensure it remains aligned with risk tolerance and financial goals, maximizing efficiency over time.

Dividends Info

  • Pacer US Cash Cows 100 ETF 1.40%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Invesco PHLX Semiconductor ETF 0.70%
  • Weighted yield (per year) 2.15%

The portfolio's dividend yield stands at 2.15%, with the Schwab U.S. Dividend Equity ETF contributing the most at 3.60%. Dividends provide a steady income stream, which can be especially beneficial for income-focused investors. Reinvesting dividends can also enhance long-term growth through compounding. While the current yield is attractive, it's essential to monitor dividend sustainability and potential changes in yield due to market conditions. Consider maintaining a balance between dividend-paying and growth-oriented assets for a well-rounded strategy.

Ongoing product costs Info

  • Pacer US Cash Cows 100 ETF 0.49%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Invesco PHLX Semiconductor ETF 0.19%
  • Weighted costs total (per year) 0.26%

The portfolio's total expense ratio (TER) is 0.26%, with the Schwab ETF having the lowest cost at 0.06%. These costs are relatively low, supporting better long-term performance as fees can erode returns over time. Keeping costs low is crucial for maximizing returns, especially in a long-term investment strategy. Regularly reviewing and comparing expense ratios of similar investment options can help ensure cost efficiency. Consider exploring low-cost alternatives if available, without compromising on the portfolio's overall strategy and objectives.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

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