A balanced US-focused portfolio with strong tech exposure and moderate emerging markets presence

Report created on Dec 7, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with a significant emphasis on the Vanguard S&P 500 ETF, comprising over 65% of the portfolio. This indicates a strong focus on large-cap US stocks. The Invesco NASDAQ 100 ETF makes up an additional 25%, adding a tech-heavy tilt. The iShares Core MSCI Emerging Markets ETF and Schwab U.S. Dividend Equity ETF provide minor diversification. This composition suggests a focus on growth and income, with a slight nod to international exposure. To ensure optimal performance, consider regularly reviewing asset weightings to maintain alignment with your investment goals.

Growth Info

Historically, the portfolio has delivered a robust compound annual growth rate (CAGR) of 15.55%, albeit with a maximum drawdown of -26.82%. This performance highlights the potential for high returns, but also significant volatility. Understanding past performance helps set expectations; however, it’s crucial to remember that past results do not guarantee future success. To mitigate risk, consider diversifying further or employing strategies like dollar-cost averaging to reduce the impact of market volatility.

Projection Info

The portfolio's forward projection, based on a Monte Carlo simulation with 1,000 iterations, suggests an annualized return of 13.69%. Monte Carlo simulations use historical data to project various potential outcomes, providing a range of possible future returns. It's important to note that these projections are not predictions but rather scenarios based on past performance. To prepare for different outcomes, consider setting realistic financial goals and regularly revisiting your investment strategy to adapt to changing market conditions.

Asset classes Info

  • Stocks
    100%

With nearly 100% of the portfolio invested in stocks, there is minimal exposure to other asset classes like bonds or cash. This concentration in equities can lead to higher returns but also increases exposure to market volatility. Diversification across asset classes is essential for risk management. Consider incorporating fixed-income securities or other alternative investments to cushion against market downturns and provide steady income.

Sectors Info

  • Technology
    36%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Financials
    11%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The portfolio is heavily weighted towards the technology sector, representing over 36% of total holdings. While this sector has shown strong growth, it also introduces sector-specific risks. Other sectors like consumer cyclicals, financial services, and healthcare provide some balance. To mitigate sector concentration risk, consider gradually rebalancing towards underrepresented sectors, ensuring a more even distribution that aligns with your risk tolerance and market outlook.

Regions Info

  • North America
    93%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Europe Developed
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio is predominantly focused on North American markets, with over 92% exposure, which may limit international diversification benefits. Small allocations to Asia and other regions offer minimal diversification against regional economic risks. Expanding geographic exposure can help balance the portfolio by reducing dependence on any single region's economic performance. Consider increasing investments in international markets to capture growth opportunities globally and mitigate regional 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 portfolio can be optimized using the Efficient Frontier concept, which balances risk and return. By adjusting the current asset allocation, you can achieve a more efficient risk-return trade-off without altering the portfolio's overall diversification. This involves reallocating funds among existing assets to maximize returns for a given level of risk. Regularly reassess asset allocations to maintain efficiency and align with evolving financial goals and market conditions.

Dividends Info

  • iShares Core MSCI Emerging Markets ETF 2.70%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 2.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.19%

The portfolio's overall dividend yield stands at 1.19%, primarily driven by the Schwab U.S. Dividend Equity ETF. Dividends provide a steady income stream, which can be reinvested for compounding growth or used as passive income. To enhance income, consider increasing exposure to high-dividend stocks or ETFs, but be mindful of the trade-off between yield and growth potential. Regularly review dividend policies of holdings to ensure alignment with income goals.

Ongoing product costs Info

  • iShares Core MSCI Emerging Markets ETF 0.09%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is a modest 0.07%, indicating efficient cost management. Lower costs enhance net returns over time, as fees can significantly erode gains. It's crucial to keep an eye on expense ratios and seek opportunities to minimize costs further. Consider using low-cost index funds or ETFs and periodically reviewing fund fees to ensure you are not overpaying for investment management.

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