Aggressive portfolio with high risk and tech-heavy concentration

Report created on Mar 6, 2025

Risk profile Info

6/7
Aggressive
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists of 65% in the Vanguard Total Stock Market Index Fund ETF and 35% in VTEX common stock. This composition reflects a concentrated approach with a heavy emphasis on equities, aligning with an aggressive risk profile. Compared to a benchmark, this portfolio leans heavily on a single ETF, limiting diversification. A more diversified portfolio might include a wider range of asset classes, such as bonds or international equities, to mitigate risk. Consider expanding the asset base to enhance diversification and potentially improve the risk-return balance.

Growth Info

Historically, the portfolio has underperformed, with a Compound Annual Growth Rate (CAGR) of -1.77%. A hypothetical investment of $10,000 would have decreased significantly, highlighting the portfolio's volatility. The maximum drawdown of -50% indicates substantial risk exposure. Compared to benchmarks, this performance suggests a need for reassessment. To improve resilience, consider incorporating assets with more stable returns. Past performance doesn't guarantee future results, but understanding these trends can guide adjustments to enhance future performance.

Projection Info

Forward projections using Monte Carlo simulations reveal potential outcomes based on historical data. With 1,000 simulations, the portfolio shows a wide range of possible returns, with the 50th percentile at -92.3%. This indicates a high likelihood of continued poor performance if conditions remain unchanged. While simulations provide insights, they rely on historical data and assumptions, which may not predict future results accurately. To improve future projections, consider adjusting the portfolio to include more stable assets or sectors with growth potential.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is 100% in stocks, indicating a lack of diversification across asset classes. This can lead to higher volatility and risk, especially during market downturns. In contrast, a balanced benchmark might include bonds or other asset classes to cushion against stock market fluctuations. To enhance diversification, consider adding fixed-income assets or alternative investments. This can help stabilize returns and reduce overall risk, aligning the portfolio more closely with diversified benchmarks.

Sectors Info

  • Technology
    56%
  • Financials
    9%
  • Consumer Discretionary
    7%
  • Health Care
    7%
  • Telecommunications
    6%
  • Industrials
    6%
  • Consumer Staples
    3%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    1%

With 56% of the portfolio in technology, there is a significant sector concentration. This tech-heavy allocation can lead to higher volatility, especially during periods of interest rate hikes or tech sector downturns. Compared to common benchmarks, this concentration is notable. While tech can offer growth, it's essential to balance exposure across sectors to mitigate risk. Consider reallocating a portion of the portfolio to underrepresented sectors, such as healthcare or consumer defensives, to achieve a more balanced sectoral distribution.

Regions Info

  • North America
    65%
  • Europe Developed
    35%

The geographic allocation is 65% North America and 35% Europe Developed, with no exposure to Asia, Latin America, or emerging markets. This limits global diversification and increases reliance on developed markets. Benchmarks typically include broader geographic exposure to capture growth opportunities worldwide. To enhance diversification, consider investing in regions like Asia or emerging markets, which can provide growth potential and reduce dependence on any single region. This shift can help balance risk and capitalize on global economic trends.

Market capitalization Info

  • Small-cap
    39%
  • Mega-cap
    27%
  • Large-cap
    20%
  • Mid-cap
    13%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown includes 39% in small caps, 27% in mega caps, and 20% in big caps. This diverse range offers exposure to various company sizes, though the high small-cap allocation may increase volatility. Compared to benchmarks, this allocation leans more towards smaller companies, which can be riskier but also offer growth potential. To balance risk, consider adjusting the allocation towards larger, more established companies. This can provide stability and align more closely with typical market capitalization distributions.

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 Efficient Frontier analysis suggests that a more efficient portfolio could achieve an expected return of 9.71% with the same risk level. This optimization focuses on the best possible risk-return ratio by adjusting current assets. While it doesn't guarantee diversification, it highlights potential improvements. Consider reallocating within existing assets to enhance efficiency. This approach can optimize returns without increasing risk, aligning the portfolio more closely with optimal risk-return strategies.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 0.84%

The portfolio's dividend yield is relatively low, with the Vanguard ETF yielding 1.30%. Dividends can provide steady income, especially in volatile markets. For an aggressive portfolio, focusing on growth stocks may lead to lower yields. However, incorporating dividend-paying stocks can offer a cushion during downturns. Consider balancing growth and income by including higher-yielding assets. This can provide a more stable cash flow and enhance total returns, particularly in uncertain market conditions.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.02%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.02%. Low costs support better long-term performance by preserving more of the investment's returns. Compared to industry averages, this cost structure is favorable. Maintaining low expenses is crucial for maximizing returns, especially in a volatile market. While the current costs are optimal, continue monitoring for any changes in fees. Keeping costs low ensures more of the portfolio's growth potential is retained over time.

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