A growth-focused portfolio with high concentration in technology and limited geographic diversity

Report created on Dec 25, 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 equities, with 99.66% in stocks, primarily through ETFs and a single stock. This composition indicates a strong focus on growth, typical for a growth-oriented profile. However, it lacks diversification across asset classes, which can increase risk during market downturns. Diversification into other asset classes like bonds or real estate could help balance risk and return, aligning more closely with common benchmark compositions that include a mix of asset types.

Growth Info

Historically, the portfolio has demonstrated impressive growth with a CAGR of 31.21%. However, it also experienced a significant max drawdown of -63.05%, highlighting its volatility. This performance suggests potential for high returns, but with substantial risk. Comparing this to benchmarks that typically show lower volatility, it might be beneficial to consider strategies that mitigate risk, such as increasing diversification or incorporating defensive assets to cushion against market fluctuations.

Projection Info

Using Monte Carlo simulations, the portfolio projects an annualized return of 36.27%, with a wide range of potential outcomes. Monte Carlo analysis uses historical data to simulate future performance, but it's important to remember that past trends don't guarantee future results. While the projections are optimistic, it's wise to prepare for variability by ensuring the portfolio is resilient to different market conditions, potentially by diversifying across sectors and geographies.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is overwhelmingly in stocks, with a negligible cash position. This lack of diversification across asset classes could expose the portfolio to higher volatility. Common benchmarks often include a mix of stocks, bonds, and other asset classes to balance risk. Introducing a broader range of asset classes could enhance stability and provide a buffer during market downturns, aligning the portfolio more closely with diversified benchmarks.

Sectors Info

  • Technology
    49%
  • Financials
    11%
  • Health Care
    8%
  • Consumer Discretionary
    7%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Telecommunications
    5%
  • Energy
    5%
  • Basic Materials
    1%
  • Real Estate
    1%
  • Utilities
    1%

The portfolio is heavily concentrated in the technology sector, representing 48.59% of the total. This concentration can lead to higher volatility, especially during periods of regulatory change or interest rate fluctuations. While tech has been a strong performer, diversifying into other sectors such as healthcare or consumer staples could reduce risk and provide more balanced exposure. This approach aligns with benchmarks that typically have a more even sector distribution.

Regions Info

  • North America
    100%

Geographically, the portfolio is primarily focused on North America, with 99.64% exposure. This limited geographic diversification can increase vulnerability to region-specific risks. Common benchmarks often include more international exposure to mitigate such risks. Expanding geographic allocation to include emerging markets or developed regions outside North America could enhance diversification and potentially capture growth opportunities in different economic cycles.

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, which seeks the best possible risk-return ratio with the current assets. This means adjusting the allocation between existing holdings to achieve a more balanced risk and return profile. While this doesn't necessarily enhance diversification, it can help maximize returns for a given level of risk, ensuring the portfolio is working as efficiently as possible.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.90%
  • Weighted yield (per year) 1.28%

With a total dividend yield of 1.28%, the portfolio provides some income, primarily from the Schwab U.S. Dividend Equity ETF. While dividends can offer a steady income stream and reduce portfolio volatility, the current yield is relatively modest. Consider increasing exposure to high-dividend-paying assets if income generation is a priority, as this could enhance returns through both capital appreciation and dividends, especially in low-interest-rate environments.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.03%. Low costs are advantageous as they help maximize net returns over time. This cost efficiency aligns well with best practices, supporting better long-term performance. Ensuring that costs remain low while maintaining or improving diversification can enhance the portfolio's overall efficiency, contributing to improved risk-adjusted returns.

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