Speculative portfolio with high risk and focus on small-cap tech stocks
Report created on Feb 23, 2025Risk profile
7/7
Diversification profile
3/5
Positions
-
ML MicroAlgo Inc.
MLGO 15.57% -
JT Jet.AI Inc.
JTAI 13.53% -
NI Nio Inc Class A ADR
NIO - US62914V1061 11.54% -
RC Rocket Pharmaceuticals Inc
RCKT - US77313F1066 11.35% -
BK Blacksky Technology Inc
BKSY - US09263B1089 10.52% -
WB Weibo Corp
WB - US9485961018 9.46% -
VW Volkswagen AG 1/10 ADR
VWAGY - US9286626000 9.15% -
HL Herbalife Nutrition Ltd
HLF - KYG4412G1010 7.93% -
BD Biodexa Pharmaceticals
BDRX 6.37% -
SM SMX (Security Matters) Public Limited Company
SMX 4.58%
This portfolio is heavily concentrated in common stocks with a strong focus on smaller companies, particularly in the technology sector. The top holdings include MicroAlgo Inc., Jet.AI Inc., and Nio Inc., each making up a significant portion of the portfolio. The composition leans towards high-risk investments, with a speculative profile. Compared to a more balanced benchmark, this portfolio lacks diversification across asset classes, relying solely on equities. To mitigate risk, consider diversifying into other asset classes like bonds or real estate, which could provide stability and reduce overall volatility.
Growth
Historically, this portfolio has achieved a compound annual growth rate (CAGR) of 15.67%, which is impressive. However, it also experienced a maximum drawdown of -83.70%, indicating significant volatility and potential for large losses. Compared to a benchmark, this performance suggests high returns come with substantial risk. Investors should be prepared for potential downturns and consider strategies to manage risk, such as setting stop-loss orders or diversifying into less volatile investments to smooth out performance over time.
Projection
The Monte Carlo simulation, which uses historical data to project potential future outcomes, shows concerning results for this portfolio. With a 0% probability of positive returns across 1,000 simulations, the annualized return is projected at -73.90%. This suggests a high likelihood of loss if current trends continue. While past performance does not guarantee future results, these projections highlight the need to reassess the portfolio's risk profile. Consider reallocating assets towards more stable investments to improve the probability of achieving positive returns.
Asset classes
- Stocks 100%
This portfolio is exclusively invested in stocks, lacking diversification across asset classes. Compared to a diversified benchmark, this singular focus increases vulnerability to market volatility. The absence of bonds, commodities, or alternative investments means the portfolio is highly exposed to equity market fluctuations. To enhance diversification, consider incorporating other asset classes, which can offer different risk-return profiles and potentially smooth out overall portfolio performance, especially during equity market downturns.
Sectors
- Technology 40%
- Consumer Discretionary 21%
- Health Care 18%
- Telecommunications 9%
- Consumer Staples 8%
- Industrials 5%
The sector allocation shows a heavy concentration in technology, comprising 40% of the portfolio, followed by consumer cyclicals and healthcare. This concentration can lead to increased volatility, especially if tech stocks face downturns due to interest rate hikes or regulatory changes. Compared to a balanced benchmark, this portfolio is under-diversified across sectors. To mitigate sector-specific risks, consider reallocating some investments to underrepresented sectors, such as utilities or financials, which may provide more stability during market fluctuations.
Regions
- North America 43%
- Asia Emerging 37%
- Europe Developed 20%
Geographically, the portfolio is diversified across North America, Asia Emerging, and Europe Developed. However, there is a notable overexposure to emerging Asian markets, which can introduce higher volatility due to political and economic uncertainties. Compared to a global benchmark, this allocation might benefit from a more balanced approach. Consider increasing exposure to developed markets or other emerging regions to better manage geographic risk and enhance the portfolio's resilience to regional economic shifts.
Market capitalization
- Micro-cap 40%
- Small-cap 30%
- Mid-cap 21%
- Large-cap 9%
The portfolio is heavily weighted towards micro and small-cap stocks, which make up 70% of the allocation. While these stocks can offer significant growth potential, they also come with higher risk and volatility compared to larger, more established companies. Compared to a benchmark, this portfolio is underexposed to large-cap stocks, which can provide stability and consistent returns. Consider increasing the allocation to medium and large-cap stocks to balance the risk-return profile and reduce susceptibility to market swings.
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 focuses on achieving the best possible risk-return ratio. Currently, the portfolio's expected return is suboptimal compared to the potential of 403.54% at a similar risk level. However, the optimal portfolio has a risk level of 604.31%, highlighting the trade-off between risk and return. To enhance efficiency, consider reallocating within the current assets to achieve a better balance of risk and reward, aligning with personal investment goals and risk tolerance.
Dividends
- Volkswagen AG 1/10 ADR 9.20%
- Weibo Corp 7.20%
- Weighted yield (per year) 1.52%
Dividend yields in this portfolio are relatively low, with a total yield of 1.52%. The highest contributors are Volkswagen AG ADR and Weibo Corp. Dividends can provide a steady income stream, which is particularly beneficial during market downturns. Compared to a benchmark with higher dividend yields, this portfolio might miss out on potential income. To enhance income generation, consider reallocating some investments to dividend-paying stocks or funds, which can offer both growth potential and regular income.
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