A growth-oriented portfolio with strong US focus and moderate risk profile

Report created on Dec 29, 2024

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 concentrated in the MM S&P 500 Index Fund, making up 80% of the total allocation. This indicates a strong preference for large-cap US equities. The remaining 20% is split equally between the BlackRock Global Dividend Income Portfolio and MFS Total Return Fund. This structure suggests a focus on growth, with limited diversification across other asset classes. A more balanced allocation could enhance risk management and potential returns by including additional asset types like bonds or international equities.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 2.32%, which is relatively modest. The maximum drawdown of -38.06% highlights its vulnerability during market downturns. This performance suggests that while the portfolio may capture growth in bullish markets, it might not be well-protected against significant losses. Comparing this to a benchmark like the S&P 500, which has historically performed better, indicates room for improvement in terms of returns and risk management.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, shows a wide range of potential results. With an annualized return of 4.19% across simulations, the portfolio has a decent chance of achieving positive returns, as evidenced by 725 out of 1,000 simulations. However, the potential for a -48.52% loss in the 5th percentile highlights significant risk. It's crucial to remember that these projections are based on past data, which does not guarantee future performance.

Asset classes Info

  • Stocks
    96%
  • Bonds
    4%

The portfolio is predominantly invested in stocks, accounting for over 95% of the allocation, with a minor allocation to bonds and cash. This heavy stock allocation aligns with a growth-focused strategy but may expose the portfolio to higher volatility. A more diversified approach, incorporating a greater share of bonds or other asset classes, could help stabilize returns and reduce risk, especially during market downturns.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Health Care
    12%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    3%
  • Basic Materials
    2%
  • Real Estate
    2%

The sector allocation is heavily skewed towards technology, which makes up nearly 30% of the portfolio. While this sector has driven significant growth in recent years, it also comes with higher volatility, particularly during economic shifts or interest rate changes. Balancing the sector exposure by increasing allocations to traditionally stable sectors like consumer defensive or utilities could help mitigate risk and smooth returns over time.

Regions Info

  • North America
    96%
  • Europe Developed
    4%

The portfolio's geographic allocation is overwhelmingly concentrated in North America, with over 95% exposure. This limited international diversification may increase vulnerability to regional economic downturns or policy changes. Expanding exposure to other developed and emerging markets could enhance diversification and potentially capture growth opportunities in different economic environments, thereby reducing overall portfolio risk.

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 Efficient Frontier analysis suggests that the portfolio could achieve a higher expected return of 7.43% by optimizing the current asset allocation. This means reallocating the existing assets to improve the risk-return trade-off without necessarily increasing risk. Optimization involves adjusting weights between the existing funds to better align with an ideal portfolio that offers the highest possible return for a given level of risk.

Dividends Info

  • BlackRock Gbl Dividend Incm Ptf inst 1.30%
  • MFS TOTAL RETURN FUND R3 2.00%
  • Weighted yield (per year) 0.33%

The portfolio's overall dividend yield is relatively low at 0.33%, primarily driven by the BlackRock Global Dividend Income Portfolio and MFS Total Return Fund. For investors seeking income generation, this might not be sufficient. Enhancing the portfolio's yield could involve adding higher-dividend-paying stocks or funds, which could provide a more stable income stream and contribute to total returns, especially in volatile markets.

Ongoing product costs Info

  • BlackRock Gbl Dividend Incm Ptf inst 0.80%
  • MM S&P 500 INDEX FUND ADMINISTRATIVE CLASS 0.49%
  • MFS TOTAL RETURN FUND R3 0.73%
  • Weighted costs total (per year) 0.54%

The total expense ratio (TER) of 0.54% is relatively low, which is beneficial for long-term performance as it minimizes the drag on returns. Keeping costs under control is crucial for maximizing net returns, especially when compounded over time. However, it's always worth exploring whether there are lower-cost alternatives that provide similar exposure, as even small differences in fees can have a significant impact over the long term.

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