A growth-oriented portfolio with strong technology focus but limited geographic diversification

Report created on Jan 6, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with a small portion in other asset classes like gold. This equity dominance aligns with a growth-focused strategy, but it could be more diversified. Compared to a benchmark like a balanced portfolio, which often includes bonds and other assets, this portfolio leans heavily towards stocks. This composition supports potential high returns but also comes with increased risk. To enhance diversification, consider adding different asset classes such as bonds or real estate, which could provide stability during market volatility and balance the risk-return profile.

Growth Info

Historically, the portfolio has shown strong performance, with a Compound Annual Growth Rate (CAGR) of 19%. This suggests that past investments have grown significantly over time. However, the maximum drawdown of -30.28% indicates vulnerability during market downturns. This performance is notable but should be viewed with caution, as past performance does not guarantee future results. To mitigate potential losses, consider strategies like diversification or hedging to protect against market volatility. Regularly reviewing and adjusting the portfolio can help maintain its growth trajectory while managing risk.

Projection Info

Forward projections using Monte Carlo simulations show promising outcomes, with a median return of 1,422.92% and a high likelihood of positive returns. Monte Carlo simulations use historical data to model potential future scenarios, offering insights into possible portfolio outcomes. While these projections are optimistic, it's important to remember that they rely on historical patterns and assumptions. To prepare for various market conditions, consider maintaining a flexible investment strategy that can adapt to changes. This approach can help capitalize on opportunities while managing unforeseen risks.

Asset classes Info

  • Stocks
    98%
  • Other
    2%

The portfolio is predominantly composed of stocks, accounting for over 97% of its allocation. This heavy emphasis on equities reflects a high-risk, high-reward strategy typical of growth-oriented portfolios. While this allocation can yield significant returns, it also exposes the portfolio to market volatility. Compared to a more balanced allocation that includes bonds, the current setup lacks the stability that fixed-income assets can provide. To enhance diversification and reduce risk, consider incorporating a broader range of asset classes, such as bonds or alternative investments, which can offer stability during market fluctuations.

Sectors Info

  • Technology
    49%
  • Financials
    11%
  • Telecommunications
    10%
  • Consumer Discretionary
    9%
  • Health Care
    4%
  • Consumer Staples
    4%
  • Industrials
    3%
  • Consumer Discretionary
    2%
  • Basic Materials
    2%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in the technology sector, making up nearly 49% of the allocation. This concentration aligns with a growth strategy but increases exposure to sector-specific risks, such as regulatory changes or technological disruptions. Compared to a diversified benchmark, this portfolio lacks balance across sectors. To mitigate risks, consider diversifying into other sectors like healthcare or consumer staples, which can provide stability and reduce volatility. A more balanced sector allocation can help the portfolio weather sector-specific downturns and capitalize on growth opportunities across different industries.

Regions Info

  • North America
    80%
  • Asia Emerging
    8%
  • Asia Developed
    5%
  • Latin America
    1%
  • Africa/Middle East
    1%
  • Europe Developed
    1%

The portfolio is predominantly focused on North American assets, accounting for over 80% of its geographic allocation. This concentration limits exposure to international markets, which can offer diversification benefits and growth opportunities. Compared to a global benchmark, this portfolio underrepresents regions like Europe and emerging markets. To enhance geographic diversification, consider increasing exposure to international markets, which can provide access to different economic cycles and reduce reliance on a single region's performance. This strategy can help mitigate risks associated with regional economic downturns and enhance overall portfolio resilience.

Redundant positions Info

  • Technology Select Sector SPDR® Fund
    Schwab U.S. Large-Cap Growth ETF
    Vanguard Growth Index Fund ETF Shares
    Vanguard Russell 1000 Growth Index Fund ETF Shares
    Invesco NASDAQ 100 ETF
    Vanguard Information Technology Index Fund ETF Shares
    FIDELITY NASDAQ COMPOSITE INDEX FUND FIDELITY NASDAQ COMPOSITE INDEX FUND
    High correlation
  • iShares Semiconductor ETF
    VanEck Semiconductor ETF
    High correlation
  • SPDR S&P 500 ETF Trust
    Vanguard S&P 500 ETF
    High correlation

The portfolio contains several highly correlated assets, particularly within the technology sector and growth-focused ETFs. Highly correlated assets tend to move together in the market, which can limit diversification benefits and increase risk during downturns. This correlation can result in amplified losses if the sector experiences a downturn. To enhance diversification, consider replacing some of the overlapping assets with those that have lower correlations. This approach can help reduce risk and improve the portfolio's resilience by ensuring that not all assets are affected by the same market conditions.

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's current allocation could be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. This optimization suggests reallocating within existing assets to achieve a more efficient balance. By focusing on assets that provide the best returns for a given level of risk, the portfolio can potentially enhance performance. However, it's important to note that this optimization is based on historical data and assumptions, which may not hold true in the future. Regularly re-evaluating the portfolio and adapting to changing market conditions can help maintain optimal performance.

Dividends Info

  • Apple Inc 0.40%
  • Broadcom Inc 0.90%
  • Costco Wholesale Corp 0.50%
  • FIDELITY NASDAQ COMPOSITE INDEX FUND FIDELITY NASDAQ COMPOSITE INDEX FUND 0.60%
  • Fairfax Financial Holdings Ltd 1.10%
  • Alphabet Inc Class A 0.30%
  • Marvell Technology Group Ltd 0.20%
  • Microsoft Corporation 0.70%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • iShares Semiconductor ETF 0.50%
  • SPDR S&P 500 ETF Trust 0.90%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Technology Select Sector SPDR® Fund 0.50%
  • Weighted yield (per year) 0.53%

The portfolio's dividend yield is relatively low at 0.53%, reflecting its focus on growth rather than income generation. Dividends can provide a steady income stream and contribute to total returns, especially during periods of market volatility. While growth stocks often reinvest earnings to fuel expansion, incorporating dividend-paying stocks can enhance income stability. Consider balancing the portfolio with a mix of growth and dividend-paying stocks to achieve a more stable income stream. This strategy can provide a cushion during market downturns and support long-term wealth accumulation.

Ongoing product costs Info

  • MFS BLENDED RESEARCH EMERGING MARKETS EQUITY FUND B 1.99%
  • FIDELITY NASDAQ COMPOSITE INDEX FUND FIDELITY NASDAQ COMPOSITE INDEX FUND 0.29%
  • SPDR® Gold Shares 0.40%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • iShares Semiconductor ETF 0.35%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Technology Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.40%

The portfolio's Total Expense Ratio (TER) is 0.4%, which is relatively low and supports better long-term performance by minimizing costs. Lower costs can enhance net returns, allowing more of the portfolio's gains to compound over time. However, some individual funds, like the MFS Blended Research Emerging Markets Equity Fund, have higher fees. To further reduce costs, consider replacing high-fee funds with lower-cost alternatives, such as index funds or ETFs. Regularly reviewing and optimizing the portfolio's cost structure can enhance overall returns and support long-term financial goals.

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