A growth-focused portfolio with heavy tech exposure and a high dividend yield strategy

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

Growth Investors

This portfolio suits an investor with a high risk tolerance, seeking substantial growth and comfortable with significant exposure to the technology sector. It's tailored for those with a long-term investment horizon, who can withstand periods of high volatility and market downturns. The strategy aligns with individuals aiming for aggressive capital appreciation rather than those prioritizing capital preservation or requiring regular income in the short term.

Positions

  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    33.34%
  • NEOS Nasdaq 100 High Income ETF
    QQQI - US78433H6751
    33.33%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    33.33%

This portfolio is heavily concentrated in three ETFs, each targeting large-cap stocks, with a significant emphasis on technology. The allocation is evenly split among the Schwab U.S. Large-Cap Growth ETF, NEOS Nasdaq 100 High Income ETF, and Vanguard S&P 500 ETF. This structure suggests a growth-oriented strategy but with low diversification across asset classes and sectors. The heavy weighting towards large-cap stocks and a singular focus on equities indicate a preference for potential high returns, albeit with increased risk due to the lack of diversification.

Warning Historical data is limited for this portfolio, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 21.37%, with a maximum drawdown of -20.53%. This performance is indicative of a high-risk, high-reward strategy, typical of growth-focused portfolios. The days contributing to 90% of returns being limited to 8.0 highlight the portfolio's volatility and the risk of timing the market incorrectly. Benchmarking this performance against a diversified growth portfolio may reveal the impact of its sector and asset class concentration on volatility and risk.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the 50th percentile suggesting a potential 1,520.1% return. This optimistic projection underscores the portfolio's aggressive growth stance. However, it's crucial to remember that Monte Carlo simulations are based on historical data and assumptions that may not predict future conditions accurately. The simulations' optimistic view should be balanced with an understanding of the inherent risks in a portfolio with high concentration in specific sectors and asset classes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is nearly entirely in stocks (99%), with a minimal cash holding (1%). This allocation supports the portfolio's growth objectives but contributes to higher volatility and risk, particularly in market downturns. The lack of investment in other asset classes, such as bonds or real estate, means the portfolio may not be well-positioned to weather periods of stock market turbulence.

Sectors Info

  • Technology
    45%
  • Telecommunications
    13%
  • Consumer Discretionary
    12%
  • Health Care
    8%
  • Financials
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Basic Materials
    2%
  • Utilities
    1%
  • Energy
    1%
  • Real Estate
    1%

Technology, at 45%, dominates the sector allocation, followed by communication services and consumer cyclicals. This tech-heavy focus aligns with the growth objective but also increases susceptibility to sector-specific risks. The underrepresentation of traditionally defensive sectors like utilities and consumer defensive further accentuates the portfolio's aggressive stance. Balancing growth-oriented sectors with defensive ones could provide stability during market volatility.

Regions Info

  • North America
    99%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%

The geographic allocation is overwhelmingly North American (99%), with a nominal exposure to developed Europe (1%). This concentration in the U.S. market leverages its growth potential but also exposes the portfolio to regional economic and political risks. Diversifying geographically, especially into emerging markets, could offer additional growth opportunities and risk mitigation.

Market capitalization Info

  • Mega-cap
    55%
  • Large-cap
    30%
  • Mid-cap
    14%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio's focus on mega (55%) and big (30%) cap stocks supports its growth and income objectives, given these companies' potential for stability and dividends. However, the minimal exposure to medium, small, and micro-cap stocks limits opportunities for outsized gains from smaller companies' growth. Increasing exposure to smaller caps could enhance returns but would also increase volatility.

Redundant positions Info

  • NEOS Nasdaq 100 High Income ETF
    Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the portfolio's ETFs indicates redundancy, diluting the benefits of diversification. This overlap, particularly in large-cap and tech-focused investments, magnifies sector-specific risks without contributing to performance. Reducing overlap by reallocating assets into non-correlated investments could enhance risk-adjusted returns.

Dividends Info

  • NEOS Nasdaq 100 High Income ETF 13.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 5.17%

The portfolio's dividend yield strategy, highlighted by the NEOS Nasdaq 100 High Income ETF's 13.90% yield, contributes significantly to its total yield of 5.17%. This approach provides a steady income stream, which is particularly attractive in growth portfolios. However, relying heavily on dividends from a concentrated sector could be risky if that sector faces downturns. Diversifying dividend sources could mitigate this risk.

Ongoing product costs Info

  • NEOS Nasdaq 100 High Income ETF 0.68%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.25%

The portfolio's total expense ratio (TER) of 0.25% is relatively low, enhancing its attractiveness by minimizing costs. The significant difference in costs between the ETFs, with the NEOS Nasdaq 100 High Income ETF being considerably higher, suggests an area for cost optimization. Rebalancing towards lower-cost ETFs without sacrificing strategic objectives could improve net 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.

Optimizing the portfolio involves addressing the high correlation among its assets. By diversifying into non-correlated assets, the portfolio could achieve a more favorable risk-return profile. The Efficient Frontier model suggests that the current asset mix may not be optimal for maximizing returns for the given level of risk. Diversification across asset classes, sectors, and geographies could move the portfolio closer to the Efficient Frontier, enhancing its performance potential.

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