A tech-focused portfolio with high North American concentration and moderate international exposure
Report created on Jan 26, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 70.00% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 25.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 5.00%
The portfolio is heavily weighted toward the Vanguard Total Stock Market Index Fund ETF, comprising 70% of the total allocation. This ETF provides broad exposure to the U.S. stock market. The Invesco NASDAQ 100 ETF accounts for 25%, focusing on large-cap tech stocks. The remaining 5% is in Vanguard Total International Stock Index Fund ETF, offering limited global diversification. Compared to a balanced benchmark, this portfolio is heavily skewed towards U.S. equities, which may limit exposure to international growth opportunities. Consider increasing international holdings to enhance diversification.
Growth
The historical performance of the portfolio shows a compound annual growth rate (CAGR) of 15.17%, indicating strong past returns. However, it experienced a maximum drawdown of -27.82%, reflecting significant volatility. The portfolio's returns are concentrated, with 90% of gains occurring on just 20 days, underscoring the importance of timing. While historical performance provides insights, it's crucial to remember that past results don't guarantee future success. Maintaining a long-term perspective and preparing for market fluctuations is advisable.
Projection
Forward projections using a Monte Carlo simulation, which models potential future outcomes based on historical data, indicate a 13.73% annualized return across simulations. The simulation's 5th percentile suggests a potential return of 54.2%, while the 67th percentile projects a return of 599.7%. Although the majority of simulations yield positive returns, it's important to recognize that these projections are not certainties. They provide a range of possibilities, emphasizing the need for a diversified strategy to mitigate risk and enhance potential outcomes.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no cash or other asset classes, which can lead to higher volatility. While equities offer growth potential, they also carry risks, especially during downturns. Diversifying into other asset classes like bonds or real estate could provide stability and reduce overall risk. This allocation is typical for aggressive growth strategies but may not suit investors seeking balanced risk exposure. Consider incorporating non-equity assets to improve risk-adjusted returns.
Sectors
- Technology 36%
- Consumer Discretionary 12%
- Financials 11%
- Telecommunications 10%
- Health Care 9%
- Industrials 8%
- Consumer Staples 5%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
The portfolio is heavily concentrated in technology, which makes up 36% of the allocation. This tech focus can drive growth but also introduces sector-specific risks, especially during periods of regulatory scrutiny or interest rate hikes. Other sectors like consumer cyclicals and financial services are also represented but to a lesser extent. While this sector composition aligns with recent market trends, it's important to monitor sector performance and consider diversifying into underrepresented areas to balance risk and opportunity.
Regions
- North America 95%
- Europe Developed 2%
- Asia Emerging 1%
- Japan 1%
- Asia Developed 1%
With 95% of the portfolio allocated to North America, there's a significant geographic concentration. This allocation aligns with U.S. market dominance but limits exposure to international markets. The remaining 5% covers Europe, Asia, and Japan, providing minimal diversification. Geographic diversification can reduce risk by spreading investments across different economies and currencies. Consider increasing international exposure to capture potential growth in emerging markets and mitigate risks associated with regional downturns.
Market capitalization
- Mega-cap 44%
- Large-cap 32%
- Mid-cap 17%
- Small-cap 5%
- Micro-cap 2%
The portfolio is predominantly invested in large-cap stocks, with 44% in mega-cap and 32% in big-cap companies. This concentration provides stability and lower volatility but may limit exposure to high-growth opportunities found in smaller companies. Medium, small, and micro-cap stocks make up the remaining 24%, offering potential for higher returns but with increased risk. Balancing market capitalization exposure can enhance diversification and capture growth across different company sizes, improving the portfolio's risk-return profile.
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 can potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the current asset allocation to achieve maximum returns for a given level of risk. While the portfolio's current composition may already be efficient, exploring optimization could reveal opportunities for improvement. It's important to balance optimization with personal investment objectives, as the most efficient portfolio may not always align with individual risk tolerance or diversification goals.
Dividends
- Invesco NASDAQ 100 ETF 0.60%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 3.30%
- Weighted yield (per year) 1.16%
The portfolio's dividend yield is 1.16%, with the Vanguard Total International Stock Index Fund ETF contributing the highest yield at 3.30%. Dividends provide a steady income stream and can enhance total returns, especially during market volatility. While the current yield is modest, reinvesting dividends can compound growth over time. For income-focused investors, exploring higher-yielding assets or dividend-focused strategies may be beneficial. However, balance is crucial to avoid sacrificing growth potential for income.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.06%
The portfolio's total expense ratio (TER) is impressively low at 0.06%, which supports better long-term performance by minimizing costs. Low expenses can significantly impact returns over time, allowing more of the portfolio's gains to be retained. This cost efficiency aligns with best practices for passive investing. While the current costs are favorable, it's important to periodically review fees and explore opportunities to further optimize expenses, ensuring they remain competitive and aligned with investment goals.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
Compare your holdings
How much do the funds you hold actually overlap with the ones people weigh them against?
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