A growth-oriented portfolio with a strong emphasis on technology and limited geographic diversification

Report created on Jan 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equities, with a significant concentration in technology stocks. The Vanguard S&P 500 ETF, Apple Inc., and the Fidelity Information Technology ETF collectively make up over half of the portfolio. Compared to a typical balanced portfolio, this composition leans toward growth-focused investments with limited defensive assets like bonds or cash. While this setup can enhance growth potential, it also increases exposure to market volatility. To balance risk, consider diversifying into other asset classes or sectors that might not be as correlated with the tech industry.

Growth Info

Historically, the portfolio has delivered impressive returns, with a CAGR of 22.54%. This growth rate indicates strong past performance, but it's essential to remember that past results don't guarantee future success. The portfolio's max drawdown of -53.44% highlights its vulnerability during market downturns. Compared to a benchmark like the S&P 500, this portfolio's performance may have been more volatile due to its tech-heavy nature. To mitigate potential losses, consider strategies like stop-loss orders or hedging techniques.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. With a median expected growth of 1,131.5% and a high probability of positive returns, the portfolio's future looks promising. However, simulations are based on past data and can't predict exact future performance. Given the high variance in outcomes, it's wise to regularly review and adjust the portfolio in response to changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    99%

The portfolio is overwhelmingly composed of stocks, accounting for 99% of the allocation, with negligible cash holdings. This lack of diversification across asset classes can lead to increased volatility and risk. In comparison, a balanced portfolio might include bonds or alternative investments to provide stability during market fluctuations. To enhance diversification, consider incorporating fixed-income securities or commodities, which can act as a buffer against equity market downturns.

Sectors Info

  • Technology
    54%
  • Health Care
    16%
  • Consumer Staples
    15%
  • Consumer Discretionary
    5%
  • Financials
    3%
  • Telecommunications
    2%
  • Industrials
    2%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is heavily concentrated in the technology sector, which comprises 54% of the total allocation. This focus can lead to higher returns during tech booms but also exposes the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. Compared to broader market benchmarks, this concentration is higher, suggesting a need for sector diversification. Consider adding exposure to less-represented sectors like industrials or energy to balance potential volatility.

Regions Info

  • North America
    94%
  • Europe Developed
    6%

Geographically, the portfolio is predominantly focused on North America, representing 94% of the allocation. This regional concentration can limit exposure to growth opportunities in emerging markets or other developed regions. Compared to global benchmarks, this allocation is heavily skewed towards the U.S., which may increase vulnerability to regional economic downturns. To improve geographic diversification, consider investing in international funds or ETFs that provide exposure to other regions.

Market capitalization Info

  • Mega-cap
    63%
  • Large-cap
    20%
  • Mid-cap
    11%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio is primarily invested in mega-cap stocks, which make up 63% of the allocation. While these large companies often provide stability, they can also limit growth potential compared to smaller, more dynamic firms. The exposure to small and micro-cap stocks is minimal, which might miss out on high-growth opportunities. Consider increasing allocations to mid-cap or small-cap stocks to capture potential growth while still maintaining a core of stable, large-cap investments.

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 asset allocation does not align with the Efficient Frontier, which represents the best possible risk-return trade-off. By adjusting the balance of existing assets, the portfolio could potentially achieve a more optimal risk-return ratio. This optimization focuses on reallocating within the current holdings rather than adding new ones. Consider consulting with a financial advisor to explore rebalancing strategies that could enhance efficiency.

Dividends Info

  • Apple Inc 0.40%
  • PHARMACEUTICALS PORTFOLIO PHARMACEUTICALS PORTFOLIO 0.20%
  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • General Motors Company 0.90%
  • Microsoft Corporation 0.70%
  • Fidelity® Government Money Market Fund 4.80%
  • Vanguard Consumer Staples Index Fund ETF Shares 1.80%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.75%

The portfolio's overall dividend yield is 0.75%, with contributions from various holdings like the Vanguard S&P 500 ETF and Microsoft Corporation. While dividends can provide a steady income stream, this yield is relatively low, reflecting the portfolio's growth orientation. Investors seeking income might want to increase exposure to higher-yielding assets. Consider balancing the portfolio with dividend-focused funds or stocks to enhance income while maintaining growth potential.

Ongoing product costs Info

  • PHARMACEUTICALS PORTFOLIO PHARMACEUTICALS PORTFOLIO 0.70%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • Vanguard Consumer Staples Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the drag on returns. Compared to industry averages, this TER is competitive, indicating that the portfolio is well-managed from a cost perspective. However, it's always beneficial to regularly review fund fees and seek opportunities to reduce costs further, potentially through low-cost index funds or ETFs.

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