A focused investment strategy with significant exposure to the tobacco industry

Report created on Aug 18, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is highly concentrated in the tobacco industry, with a 100% allocation to stocks within the Consumer Defensive sector. The major holdings include British American Tobacco, Philip Morris International, and Imperial Brands, among others, which collectively represent a significant portion of the portfolio. This single-sector focus presents a unique blend of growth and income characteristics, underscored by the portfolio's high dividend yields. However, the concentration in one industry increases the portfolio's vulnerability to sector-specific risks.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 10.84% and a maximum drawdown of -48.95%, the portfolio has demonstrated resilience and growth potential. However, the days contributing to 90% of returns suggest volatility and the importance of timing in this investment strategy. While the historical performance is strong, it's crucial to remember that past results do not guarantee future performance. The significant drawdown also highlights the portfolio's exposure to high risk during market downturns, particularly within the tobacco sector.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, projects a wide range of outcomes, from a 5th percentile loss of -36.8% to a 67th percentile gain of 485.4%. This broad spectrum underscores the inherent uncertainties and risks in the portfolio's future performance. While the simulation suggests potential for high returns, it also highlights the risk of substantial losses, making it imperative for investors to consider their risk tolerance and investment horizon carefully.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, providing no asset class diversification. This approach maximizes exposure to the equity market's growth potential but also increases susceptibility to market volatility. Diversifying across different asset classes, such as bonds or real estate, could mitigate risk and reduce volatility, potentially leading to a more stable performance over time.

Sectors Info

  • Consumer Staples
    100%

Concentration in the Consumer Defensive sector, specifically tobacco, characterizes this portfolio. While this sector can offer stability and high dividends, it also exposes the portfolio to regulatory and societal shifts affecting tobacco consumption. Diversification across multiple sectors could reduce sector-specific risks and enhance the portfolio's resilience to market changes.

Regions Info

  • Europe Developed
    55%
  • North America
    40%
  • Japan
    5%

The geographic distribution is primarily in developed markets, with a significant allocation to Europe and North America, and a minor position in Japan. This developed market focus may provide stability but limits exposure to potentially higher growth in emerging markets. Considering a broader geographic distribution could introduce growth opportunities and further diversification benefits.

Market capitalization Info

  • Large-cap
    75%
  • Mega-cap
    20%
  • Small-cap
    5%

The portfolio's emphasis on Big and Mega cap stocks suggests a preference for established, large-scale companies, which typically offer stability and consistent dividends. However, the minimal exposure to Small cap stocks limits potential high-growth opportunities. Balancing market capitalization exposure could enhance growth prospects while maintaining a foundation of stability.

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.

Considering the portfolio's current structure and performance, optimization towards the Efficient Frontier could improve the risk-return ratio. This means adjusting the asset allocation to achieve the highest possible return for a given level of risk. However, it's essential to recognize that such optimization is based on historical data, which may not accurately predict future performance.

Dividends Info

  • British American Tobacco p.l.c. 5.20%
  • Imperial Brands PLC 5.30%
  • Altria Group 6.20%
  • Philip Morris International Inc 3.20%
  • Turning Point Brands Inc 0.30%
  • Weighted yield (per year) 4.46%

The portfolio's dividend yield is attractive, with an average yield of 4.46%, highlighting its income-generating capability. This focus on dividends is beneficial for income-seeking investors but should be balanced with growth considerations. Reinvesting dividends or diversifying into lower-yield, higher-growth assets could enhance total returns over time.

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