A growth-focused portfolio with strong tech emphasis and moderate geographic diversification

Report created on Jan 31, 2025

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 weighted towards ETFs, with SPDR S&P 500 ETF Trust and Invesco QQQ Trust making up a substantial 67% of the total. This indicates a strong preference for diversified market exposure through these popular funds. Common stocks like NVIDIA Corporation and TC Energy Corp add individual stock exposure, rounding out the portfolio. Compared to a typical growth portfolio, this composition leans heavily on established market indices, which can provide stability but may limit exposure to niche growth opportunities. Consider balancing this with more diverse asset classes to enhance potential returns.

Growth Info

The portfolio has demonstrated impressive historic performance, with a CAGR of 22.79%, significantly outperforming many benchmarks. However, it has also experienced a substantial maximum drawdown of -58.77%, highlighting its vulnerability during market downturns. This volatility is common in growth-focused portfolios, which prioritize capital appreciation over stability. While past performance can provide insights, it's crucial to remember that it doesn't guarantee future results. To mitigate potential future drawdowns, consider strategies that balance growth potential with risk management.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with a median projection of 1,654.9% growth. Monte Carlo analysis uses historical data to simulate numerous future scenarios, offering a probabilistic view of potential returns. While the median projection is optimistic, it's important to note that this method relies on past data and assumptions, which may not account for future market changes. Consider these projections as one of several tools in decision-making, and remain prepared for varying market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, lacking diversification across asset classes like bonds or real estate. This 100% equity exposure aligns with a high-risk, high-reward strategy typical for growth-focused investors. While this can enhance returns in bullish markets, it also increases vulnerability to market volatility. Compared to benchmarks, which often include a mix of asset classes, this portfolio's lack of diversification could be a risk factor. Consider integrating other asset types to balance risk and potentially stabilize returns.

Sectors Info

  • Technology
    44%
  • Energy
    13%
  • Consumer Discretionary
    9%
  • Telecommunications
    9%
  • Financials
    7%
  • Health Care
    6%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The portfolio's sector allocation is dominated by technology at 44%, followed by energy and consumer cyclicals. This tech-heavy focus can drive significant growth during industry upswings but also exposes the portfolio to sector-specific risks like regulatory changes or tech bubbles. Compared to common benchmarks, this concentration is higher, suggesting a strong bet on tech's continued success. Diversifying into other sectors like healthcare or financials could mitigate risk and provide more balanced growth opportunities.

Regions Info

  • North America
    92%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

Geographic allocation is heavily skewed towards North America at 92%, with minimal exposure to other regions. This concentration can limit the benefits of global diversification, such as reduced geopolitical risk and access to emerging market growth. Compared to global benchmarks, this portfolio is underexposed to international markets. Increasing allocations to regions like Europe or Asia could enhance diversification and provide additional growth opportunities, particularly in emerging economies.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    37%
  • Mid-cap
    11%

The portfolio is predominantly invested in mega-cap companies, which make up 51%, followed by large and medium caps. This focus on larger companies is typical for growth portfolios seeking stability and reliable returns. However, it may limit exposure to potentially higher returns from small or micro-cap stocks, which can offer significant growth potential. Consider incorporating smaller companies to capture opportunities in less mature markets, balancing the stability of mega-caps with the dynamism of smaller firms.

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 composition does not fully align with the Efficient Frontier, which represents the best possible risk-return balance. By adjusting allocations among existing assets, you might achieve a more optimal risk-return ratio. This doesn't necessarily mean adding new assets but rather reallocating within current holdings to enhance efficiency. Regularly reviewing and rebalancing your portfolio can help maintain this optimized state, ensuring it continues to meet your risk and return objectives.

Dividends Info

  • Invesco QQQ Trust 0.50%
  • SPDR S&P 500 ETF Trust 1.20%
  • TC Energy Corp 5.60%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.42%

The portfolio's dividend yield is modest at 1.42%, with TC Energy Corp contributing significantly at 5.60%. While dividends provide a steady income stream, this portfolio's growth focus means dividends are not a primary driver of returns. For investors seeking income, this yield might be insufficient. However, reinvesting dividends can boost long-term growth. If income is a priority, consider adding higher-yielding assets or dividend-focused funds to improve cash flow without sacrificing growth potential.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is impressively low at 0.10%, with costs primarily from the ETFs. Low costs are crucial for maximizing long-term returns, as they reduce the drag on performance. This efficient cost structure aligns well with best practices, ensuring more of your money is working for you. Maintaining this low-cost approach is advisable, but remain vigilant for any changes in fund fees or opportunities to further reduce costs through fee-free options.

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