A growth-focused portfolio with strong technology exposure and high geographic concentration in North America

Report created on Dec 18, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio consists of five ETFs with a significant focus on technology and real estate sectors. The Vanguard Information Technology Index Fund holds the largest weight at 35%, followed by the Vanguard S&P 500 ETF at 30%. Real estate, developed markets, and emerging markets ETFs make up the remaining 35%. This composition leans toward growth with a strong emphasis on equities, particularly in technology, which can drive higher returns but also increase volatility. Consider diversifying further by adding non-correlated asset classes like bonds to balance risk and potential returns.

Growth Info

Historically, this portfolio has delivered a robust CAGR of 14.27%, indicating strong growth over time. However, it also experienced a maximum drawdown of -33.55%, highlighting periods of significant volatility. This performance suggests that while the portfolio can generate substantial returns, investors should be prepared for potential downturns. To mitigate risk, consider maintaining a cash reserve or exploring hedging strategies during market downturns to protect against large losses.

Projection Info

Monte Carlo simulations project potential future outcomes by analyzing historical data and volatility. With 1,000 simulations, this portfolio shows a median return of 299.41% and a positive return in 967 simulations. While these projections offer insights, they are based on past data and assumptions, which may not capture future market conditions. Regularly review and adjust your portfolio to align with changing market dynamics and personal financial goals, ensuring it remains on track.

Asset classes Info

  • Stocks
    84%
  • Real Estate
    15%
  • Cash
    1%

The portfolio is heavily weighted toward stocks, comprising 84.4% of total assets, with real estate making up 15%. This allocation suggests a focus on capital appreciation, benefiting from stock market growth. While this approach can yield high returns, it also exposes the portfolio to market volatility. Consider incorporating fixed-income assets, such as bonds, to enhance diversification and reduce overall risk, providing more stability during market fluctuations.

Sectors Info

  • Technology
    48%
  • Real Estate
    16%
  • Financials
    8%
  • Consumer Discretionary
    5%
  • Industrials
    5%
  • Health Care
    5%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Energy
    2%
  • Utilities
    1%

Technology dominates the sectoral allocation, representing nearly half of the portfolio at 47.7%, followed by real estate at 16.1%. This concentration in technology may drive growth but also introduces sector-specific risks, such as regulatory changes or technological disruptions. To mitigate these risks, ensure a balanced sector allocation by considering investments in underrepresented sectors like healthcare or consumer staples, which can provide stability and reduce volatility.

Regions Info

  • North America
    81%
  • Asia Emerging
    6%
  • Europe Developed
    6%
  • Asia Developed
    3%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Australasia
    1%

Geographically, the portfolio is concentrated in North America, accounting for 80.6% of assets. This focus offers exposure to a stable and mature market but limits diversification. Emerging markets and other regions make up a smaller portion, providing some global exposure. To enhance geographic diversification, consider increasing allocations to Europe, Asia, or other regions, which can offer growth opportunities and reduce reliance on any single market.

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.

This portfolio can benefit from optimization using the Efficient Frontier, focusing on achieving the best risk-return ratio. By adjusting the allocation among current assets, investors can potentially enhance returns without proportionally increasing risk. Regularly reassess the portfolio's positioning on the Efficient Frontier to ensure it aligns with risk tolerance and investment objectives, making necessary adjustments to maintain an optimal balance.

Dividends Info

  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Real Estate Index Fund ETF Shares 3.90%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.70%
  • Weighted yield (per year) 1.40%

With a total yield of 1.4%, dividends contribute modestly to portfolio returns. The Vanguard Real Estate Index Fund offers the highest yield at 3.9%, providing income potential. Dividends can enhance returns and offer a cushion during market volatility. To increase income, consider adding high-dividend ETFs or stocks, balancing the need for growth with income-generating investments that can provide steady cash flow.

Ongoing product costs Info

  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio is 0.08%, indicating low costs associated with maintaining these investments. Low costs are crucial for maximizing returns over the long term, as they reduce the drag on performance. Continually monitor and compare expense ratios across similar funds to ensure cost-effectiveness. Consider switching to lower-cost alternatives if available, without compromising on diversification or potential returns.

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