A globally diversified portfolio with a strong technology focus and moderate dividend yield

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor seeking global equity exposure with a balanced approach to risk and growth. It favors a moderate risk tolerance and a medium to long-term investment horizon. The focus on equities and technology suggests a preference for capital appreciation over income. Ideal for those comfortable with market fluctuations, it aims to build wealth over time while maintaining broad diversification. Investors seeking growth with some income potential will find this portfolio aligns well with their objectives.

Positions

  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    90.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    10.00%

This portfolio consists of two ETFs: the Vanguard Total World Stock Index Fund ETF Shares (90%) and the Invesco NASDAQ 100 ETF (10%). The composition is heavily weighted towards equities, which aligns with a balanced risk profile. The Vanguard ETF provides broad global exposure, while the Invesco ETF adds a concentrated tech focus. This structure offers a solid foundation for growth, but the limited number of holdings may reduce diversification benefits. Consider adding other asset classes like bonds to enhance stability and reduce volatility, especially during market downturns.

Growth Info

Historically, this portfolio has delivered a Compound Annual Growth Rate (CAGR) of 8.51%, which is respectable for a balanced profile. The maximum drawdown of -27.15% indicates vulnerability during market downturns, suggesting a moderate risk level. The portfolio's performance is driven by its equity exposure, which has benefited from strong global market growth. Comparing this to a benchmark like a global stock index can provide a clearer performance context. To improve resilience, consider incorporating assets with lower volatility to buffer against major downturns.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with a 50th percentile end portfolio value of 212% and a 67th percentile of 339.4%. This method uses historical data to model future performance, though it's important to note that past results don't guarantee future success. The simulations indicate a high likelihood of positive returns, with 945 out of 1,000 simulations showing gains. To enhance future outcomes, consider periodic rebalancing to maintain your risk profile and capitalize on market shifts.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is primarily invested in stocks (99%), with a small cash allocation (1%). While this stock-heavy allocation can drive growth, it may expose the portfolio to significant volatility. Diversification across asset classes like bonds or real estate could provide more stability and reduce overall risk. Comparing the asset class allocation to a balanced benchmark may reveal areas for improvement. Consider introducing fixed-income securities to balance the risk-return profile, especially if your financial goals include capital preservation.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The portfolio is heavily weighted towards technology (27%), followed by financial services (16%) and consumer cyclicals (11%). This sectoral concentration can lead to higher volatility, especially during periods of tech market instability. Aligning sector weights with a broad market index can ensure balanced exposure across industries. Given the tech-heavy nature, consider diversifying into sectors less correlated with technology to reduce risk. Monitoring sector trends and adjusting allocations accordingly can help maintain a balanced risk profile.

Regions Info

  • North America
    69%
  • Europe Developed
    13%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic exposure is concentrated in North America (69%), with smaller allocations in Europe Developed (13%) and Asia Emerging (5%). This North American focus aligns with the strong performance of U.S. markets but may limit diversification benefits. Comparing geographic allocation to a global benchmark can highlight potential areas for increased international exposure. Expanding investments in underrepresented regions like emerging markets could enhance diversification and capture growth opportunities outside the U.S.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization is predominantly in mega-cap (43%) and big-cap (31%) stocks. This large-cap focus provides stability and less volatility compared to smaller companies but may limit growth potential. Incorporating more mid-cap and small-cap stocks could enhance growth prospects and improve diversification. Analyzing market cap distribution against a broad market index can reveal imbalances. Consider adjusting allocations to include a wider range of company sizes to capture different growth dynamics.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 2.05%

The portfolio's overall dividend yield is 2.05%, with the Vanguard ETF contributing 2.20% and the Invesco ETF 0.70%. This yield provides a modest income stream, which can be appealing for investors seeking regular cash flow. Comparing dividend yields to benchmarks can offer insights into income potential. Consider reinvesting dividends to compound growth, or explore higher-yielding investments if income generation is a priority. Balancing growth and income needs can optimize portfolio performance.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, which is impressively low and supports better long-term performance by minimizing costs. Low fees are beneficial as they enhance net returns over time. Comparing costs to similar investment options can ensure competitive pricing. Maintaining a low-cost strategy is advantageous, but periodically reviewing expenses can identify potential savings. Consider cost-effective alternatives if fees rise, as minimizing costs is crucial for maximizing returns.

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.

The portfolio can potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. This optimization considers asset allocation changes to enhance efficiency. While the current structure aligns with a balanced risk profile, exploring reallocation opportunities could improve returns without increasing risk. Consider periodic reviews of asset weights to ensure alignment with financial goals and market conditions. Optimization should focus on maximizing returns while maintaining acceptable risk levels.

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