A growth-focused US-centric portfolio with robust diversification and moderate risk exposure

Report created on Jan 11, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed of four ETFs with a strong focus on equities, accounting for over 99% of the assets. The largest holding is the Vanguard S&P 500 ETF at 45%, providing significant exposure to large-cap US stocks. The Avantis U.S. Small Cap Value ETF at 25% introduces a tilt towards smaller companies with value characteristics. International exposure is achieved through the Vanguard Total International Stock Index Fund ETF and Avantis International Small Cap Value ETF, which collectively account for 30% of the portfolio. This composition leans heavily on equities, typical for a growth-focused strategy, but lacks bonds or alternative assets that could provide stability during market volatility.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 14.36%. This impressive growth rate indicates a strong historical performance, but it's worth noting the maximum drawdown of nearly 38%, which highlights potential volatility. The portfolio's performance aligns with its growth profile, benefiting from a bullish market environment. However, past performance does not guarantee future results, and investors should be prepared for potential fluctuations. To mitigate risk, consider strategies that could reduce drawdowns, such as incorporating more defensively-oriented assets.

Projection Info

The forward projection using a Monte Carlo simulation, which analyzes potential future outcomes based on historical data, suggests a wide range of possible returns. With a median expected growth of over 327% and a positive return in 951 out of 1,000 simulations, the outlook is optimistic. However, the 5th percentile outcome of just 1.2% highlights the uncertainty and potential for lower returns. Investors should remain aware that these projections are not guarantees and should consider their risk tolerance and investment horizon when planning for future outcomes.

Asset classes Info

  • Stocks
    99%

The portfolio is heavily weighted towards stocks, with nearly 100% allocation, reflecting a strong growth orientation. While this aligns with higher growth potential, it also increases exposure to market volatility. Cash and bonds are minimally represented, which means there is limited protection against market downturns. Compared to a balanced benchmark, this portfolio is more aggressive. To enhance stability, consider gradually introducing more fixed-income or cash components to provide a buffer during market corrections.

Sectors Info

  • Technology
    19%
  • Financials
    19%
  • Industrials
    13%
  • Consumer Discretionary
    12%
  • Health Care
    8%
  • Energy
    7%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is diverse, with the largest exposures in technology and financial services, each around 19%. This distribution is fairly balanced compared to common benchmarks, providing exposure to a wide range of economic sectors. However, a significant concentration in technology could lead to higher volatility, especially during interest rate changes. To maintain diversification benefits, monitor sector weights regularly and consider rebalancing if any sector becomes too dominant.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Japan
    6%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly focused on North America, representing nearly 72% of the assets. While this aligns with the US-centric investment strategy, it may limit exposure to growth opportunities in other regions. The remaining allocation is spread across developed and emerging markets, providing some diversification. To enhance global exposure, consider increasing investments in regions like Asia or Europe, which could offer different growth dynamics and reduce regional risk concentration.

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 appears well-optimized for its growth objective, though further refinement could be achieved using the Efficient Frontier concept. This involves adjusting asset weights to achieve the best possible risk-return ratio. However, it's important to note that optimization based solely on historical data may not fully account for future market conditions. Regularly reassessing the allocation can ensure it remains aligned with evolving market dynamics and personal investment goals.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.40%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.10%

The portfolio's dividend yield stands at 2.1%, with contributions from both domestic and international holdings. This yield provides a modest income stream, which can be appealing for investors seeking regular cash flow. While dividends are a valuable component of total returns, the growth focus of this portfolio suggests that capital appreciation is the primary objective. For those prioritizing income, consider reallocating towards higher-yielding assets while maintaining growth potential.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.13%

The total expense ratio (TER) of the portfolio is 0.13%, which is impressively low. This cost efficiency supports better long-term returns by minimizing the drag on performance. The Vanguard S&P 500 ETF, with a TER of 0.03%, is particularly cost-effective, highlighting the benefits of low-cost indexing. Regularly reviewing and managing costs is crucial, as even small reductions can significantly enhance portfolio returns over time.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

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