A growth-focused portfolio with high tech concentration and limited international diversification

Report created on Dec 17, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards ETFs, with a significant 46.87% allocation in the Schwab U.S. Large-Cap Growth ETF. This indicates a focus on large-cap growth stocks, complemented by smaller allocations in other ETFs and a single common stock, Comstock Mining Inc. This composition suggests a strategy centered on capturing growth potential from established companies while maintaining some diversity through various ETFs. However, the portfolio's reliance on a few large positions suggests a potential vulnerability to market fluctuations. Consider diversifying further to mitigate this risk and enhance stability.

Growth Info

Historically, the portfolio has demonstrated strong performance with a compound annual growth rate (CAGR) of 19.1%. However, it has also experienced a significant maximum drawdown of -37.33%, which highlights its vulnerability during market downturns. The fact that 90% of returns were achieved in just 8 days indicates high volatility, where timing plays a crucial role. While past performance can provide insights, it is not a guarantee of future results. Investors should be prepared for potential fluctuations and consider strategies to protect against downside risks.

Projection Info

Using Monte Carlo simulation, the portfolio's potential future performance was assessed across 1,000 scenarios. The simulation projects a wide range of outcomes, with the 5th percentile indicating a potential loss of -86.99% and the 67th percentile suggesting growth of 495.99%. The median projection shows a 156.25% increase. These projections highlight the inherent uncertainty in financial markets and the importance of preparing for various outcomes. While simulations can offer valuable insights, they rely on historical data and assumptions, which may not fully capture future market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is almost entirely composed of stocks, accounting for 99.82% of its allocation, with a negligible cash position. This heavy stock weighting suggests an aggressive growth strategy, aiming for higher returns but also exposing the portfolio to increased market risk. While stocks can offer substantial growth, they are also more volatile than other asset classes like bonds. To balance risk and return, consider introducing other asset classes such as fixed income or real estate, which can provide stability and reduce overall portfolio volatility.

Sectors Info

  • Technology
    41%
  • Consumer Discretionary
    10%
  • Basic Materials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Financials
    8%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio is notably concentrated in the technology sector, making up 40.84% of the allocation. This concentration suggests a strong belief in the growth potential of tech companies but also exposes the portfolio to sector-specific risks. Other sectors like consumer cyclicals and basic materials have smaller representations. While sector concentration can lead to significant gains if the sector performs well, it also increases risk if the sector faces downturns. Diversifying across more sectors can help mitigate these risks and provide a more balanced growth potential.

Regions Info

  • North America
    99%

Geographically, the portfolio is overwhelmingly focused on North America, with 99.49% of assets allocated there. This lack of international exposure limits the benefits of geographic diversification, which can help mitigate risks associated with regional economic downturns. Exposure to other regions like Europe, Asia, and emerging markets is minimal. Consider increasing international diversification to capture growth opportunities in other markets and reduce reliance on the North American economy. This can also help protect against currency risks and geopolitical uncertainties.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Invesco NASDAQ 100 ETF
    iShares Russell Top 200 ETF
    Vanguard Information Technology Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The portfolio features several highly correlated assets, particularly within the tech-heavy ETFs. These include the Schwab U.S. Large-Cap Growth ETF and the Invesco NASDAQ 100 ETF, among others. High correlation means these assets tend to move in the same direction, reducing the diversification benefit within the portfolio. Consequently, the portfolio may experience amplified gains or losses during market swings. To enhance diversification, consider incorporating assets with lower correlation, which can help stabilize returns and reduce overall 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 could potentially be optimized using the Efficient Frontier to achieve a better risk-return ratio. Currently, it includes several highly correlated assets, which may not provide the best diversification benefits. By adjusting the allocation among existing assets, focusing on those with lower correlations, the portfolio can be positioned more efficiently. This optimization does not necessarily mean adding new assets but rather rebalancing the current ones to achieve the ideal balance of risk and return, maximizing potential gains while minimizing downside risks.

Dividends Info

  • iShares Russell Top 200 ETF 1.00%
  • Invesco NASDAQ 100 ETF 0.60%
  • Invesco S&P 500® Equal Weight ETF 1.50%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.78%

The portfolio's total dividend yield is relatively low at 0.78%, reflecting its growth-oriented strategy. While dividends can provide a steady income stream, this portfolio relies more on capital appreciation for returns. The Schwab U.S. Dividend Equity ETF contributes the highest yield at 3.6%, offering some income stability. Investors seeking more regular income might consider increasing allocations to dividend-focused investments. Balancing growth and income can enhance total returns while providing some downside protection through consistent dividend payouts.

Ongoing product costs Info

  • iShares Russell Top 200 ETF 0.15%
  • Invesco NASDAQ 100 ETF 0.15%
  • Invesco S&P 500® Equal Weight ETF 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.07%

The total expense ratio (TER) for the portfolio stands at a modest 0.07%, indicating cost efficiency. Low costs are crucial for maximizing long-term returns, as they reduce the drag on performance. The Vanguard S&P 500 ETF, with an expense ratio of 0.03%, is the lowest-cost holding. While the current costs are favorable, regularly reviewing and managing expenses can further improve returns. Consider replacing higher-cost investments with more cost-effective alternatives to enhance the portfolio's overall efficiency.

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