Portfolio with High Growth Potential and Broad Diversification for Risk-Tolerant Investors

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits investors with a growth-oriented mindset, seeking capital appreciation over income. They likely have a long investment horizon and a higher risk tolerance, comfortable with market volatility for the potential of higher returns. These investors value diversification across sectors and geographies, yet are willing to concentrate heavily in equities. They prioritize growth, understanding the trade-off between potential gains and the risk of drawdowns.

Positions

  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    66.22%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    33.78%

The portfolio is composed primarily of two ETFs: Schwab U.S. Large-Cap Growth ETF at 66.22% and Vanguard Total International Stock Index Fund ETF Shares at 33.78%. This allocation indicates a strong preference for large-cap growth stocks in the U.S. market, while maintaining international exposure. The portfolio is classified as broadly diversified with a risk score of 5 out of 7, suggesting a willingness to take on a moderate to high level of risk. The diversification score of 4 out of 5 indicates a well-spread allocation across various sectors and geographies.

Growth Info

Historically, the portfolio has delivered a commendable compound annual growth rate (CAGR) of 13.65%. This performance reflects a robust growth trajectory, although it has experienced a significant max drawdown of -33.0%, indicating vulnerability during market downturns. The fact that 90% of returns are concentrated in just 32 days suggests a reliance on key market movements for gains. This highlights the importance of timing and market conditions in realizing the portfolio's potential.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The simulation, which models potential outcomes based on historical data, shows a median return of 328.44% and a 67th percentile return of 505.75%. With 976 simulations yielding positive returns, there's a strong indication of potential profitability. The annualized return of 12.77% suggests that if historical trends continue, the portfolio could maintain its growth trajectory.

Asset classes Info

  • Stocks
    99%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, with 99.46% of assets in equities, and a negligible allocation to cash and other categories. This heavy stock allocation aligns with the growth-oriented profile, targeting capital appreciation. While this composition can drive significant returns, it also introduces higher volatility. Investors should consider their comfort with this level of equity exposure, as it may not provide the stability of a more balanced asset allocation.

Sectors Info

  • Technology
    36%
  • Consumer Discretionary
    12%
  • Financials
    12%
  • Health Care
    10%
  • Telecommunications
    10%
  • Industrials
    7%
  • Basic Materials
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation within the portfolio is diverse, with a significant concentration in technology at 36.36%, followed by consumer cyclicals, financial services, and healthcare. This sector distribution supports the growth objective, as these industries are often associated with innovation and economic expansion. However, the reliance on technology could introduce sector-specific risks. Balancing exposure across other sectors could mitigate potential downturns in any single industry.

Regions Info

  • North America
    69%
  • Europe Developed
    13%
  • Asia Emerging
    6%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America at 68.72%, with additional exposure to developed Europe, emerging Asia, and Japan. This allocation provides a mix of stability from developed markets and growth potential from emerging regions. However, the concentration in North America could limit benefits from global diversification. Investors might consider increasing allocations to other regions to enhance global exposure and reduce regional risk.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.28%

The portfolio offers a modest dividend yield of 1.28%, with the Schwab U.S. Large-Cap Growth ETF yielding 0.4% and the Vanguard Total International Stock Index Fund ETF Shares yielding 3.0%. This yield provides some income, though the focus remains on capital gains. Investors seeking higher income might consider reallocating to higher-yielding investments. However, maintaining a growth focus is crucial if capital appreciation is the primary goal.

Ongoing product costs Info

  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.05%. This cost efficiency is advantageous, as lower fees can significantly enhance net returns over time. Keeping investment expenses low is a smart strategy, allowing more of the portfolio's growth to directly benefit the investor. Maintaining this cost focus while pursuing growth opportunities is a prudent approach for optimizing long-term performance.

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.

The portfolio is already well-optimized for a growth-focused strategy, but there's room to adjust risk levels along the efficient frontier. For those seeking higher returns with increased risk, further concentration in equities or growth sectors could be considered. Conversely, those desiring a more conservative approach might explore diversifying into bonds or other asset classes. It's crucial to align any adjustments with personal risk tolerance and financial goals, while ensuring the portfolio remains cost-efficient and diverse.

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