A tech-heavy growth portfolio with high North American concentration and moderate diversification

Report created on Dec 24, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equities, with a significant concentration in ETFs and individual tech stocks. The Vanguard S&P 500 and iShares S&P 500 Information Technology Sector ETFs dominate, making up over 60% of the portfolio. While this composition aligns with a growth-focused strategy, it diverges from more balanced benchmark compositions that might include bonds or other asset classes. A more diversified asset allocation could help manage risk better, especially during market volatility. Consider gradually introducing non-equity assets to balance the portfolio.

Growth Info

Historically, the portfolio has shown impressive performance, with a CAGR of 21.17% and a maximum drawdown of -27.65%. While the high CAGR indicates strong growth, the drawdown highlights potential volatility risks. Compared to common benchmarks, this performance is commendable but suggests a need for risk management strategies. It's crucial to remember that past performance may not predict future results. Regularly review performance metrics and adapt strategies to maintain growth while mitigating risk.

Projection Info

The Monte Carlo simulation projects a wide range of potential outcomes, with an annualized return of 36.51% across simulations. This method uses historical data to estimate future performance, but it's important to note that these projections are not guarantees. The portfolio's 5th percentile outcome is 286.17%, while the 67th percentile is 5,883.05%, indicating variability in potential returns. Regularly reassess your risk appetite and investment goals to ensure alignment with these projections.

Asset classes Info

  • Stocks
    100%

With nearly 100% allocation in stocks, the portfolio lacks diversification across asset classes. This heavy stock concentration can lead to increased risk during market downturns, as there's minimal exposure to stabilizing assets like bonds or real estate. Diversification across different asset classes typically enhances risk management and smoothens returns over time. Consider introducing other asset classes to balance potential risks and returns better.

Sectors Info

  • Technology
    49%
  • Telecommunications
    11%
  • Financials
    8%
  • No data
    7%
  • Consumer Discretionary
    6%
  • Health Care
    6%
  • Industrials
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

The portfolio is notably concentrated in the technology sector, which comprises nearly half of the total allocation. While this focus can drive growth during tech booms, it also exposes the portfolio to sector-specific risks, such as regulatory changes or tech market downturns. A more balanced sector allocation, similar to broader market benchmarks, could help mitigate these risks. Explore opportunities to diversify into underrepresented sectors.

Regions Info

  • North America
    86%
  • No data
    6%
  • Europe Developed
    5%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily concentrated in North America, accounting for over 85% of the allocation. This focus may limit exposure to growth opportunities in other regions, such as emerging markets or Europe. Geographic diversification can reduce risk by spreading investments across different economic environments. Consider increasing allocations to underrepresented regions to enhance global diversification and capitalize on international growth potential.

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 could benefit from optimization using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. While the portfolio is growth-oriented, optimizing asset allocation could improve efficiency without sacrificing returns. This involves adjusting weights among existing assets to achieve an optimal balance. Consider using tools or consulting with advisors to explore potential optimization strategies.

Ongoing product costs Info

  • iShares S&P 500 USD Information Technology Sector UCITS 0.15%
  • Vanguard S&P 500 UCITS Acc 0.07%
  • Vanguard FTSE All-World UCITS ETF USD Accumulation 0.22%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) is 0.12%, which is impressively low and supports long-term performance. Lower costs mean more of your returns stay in your pocket, compounding over time. This cost efficiency aligns well with best practices in portfolio management. Continue to monitor and compare costs periodically to ensure they remain competitive and explore options for further cost reductions.

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