Growth-Oriented Portfolio with Strong Tech Focus and Moderate 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 is suitable for growth-oriented investors who are comfortable with higher risk levels and market volatility. Such investors typically have a long-term investment horizon and are focused on capital appreciation rather than income generation. They are willing to accept significant fluctuations in portfolio value in pursuit of higher returns. This investor profile values innovation and technological advancement, often favoring sectors with strong growth potential. While they prioritize growth, they may also seek some level of diversification to manage risk effectively.

Positions

  • Accenture plc
    ACN - IE00B4BNMY34
    55.55%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    21.12%
  • Apple Inc
    AAPL - US0378331005
    11.74%
  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    11.59%

The portfolio is heavily skewed towards Accenture plc, making up over half of the allocation. It also includes significant positions in Vanguard S&P 500 ETF, Apple Inc, and Vanguard Total World Stock Index Fund ETF Shares. This composition suggests a strong focus on technology and a preference for large-cap stocks. While the presence of ETFs provides some diversification, the portfolio remains concentrated. This concentration can lead to increased volatility, which may not align with all investors' risk tolerance. Consider diversifying further to mitigate potential risks associated with heavy reliance on a few assets.

Growth Info

Historically, the portfolio has performed impressively, with a compound annual growth rate (CAGR) of 17.93%. However, it has also experienced a maximum drawdown of -33.75%, indicating periods of significant volatility. This performance suggests that while the portfolio can deliver strong returns, it also exposes investors to substantial risks. Understanding these risks is crucial for aligning the portfolio with one's financial goals and risk tolerance. Investors might want to evaluate their ability to withstand such drawdowns and consider adjustments to balance risk and return.

Projection Info

A Monte Carlo simulation, which uses random sampling to predict future outcomes, was conducted with 1,000 simulations. Assuming a hypothetical initial investment, the results show a wide range of potential outcomes. The 5th percentile projects a 126.07% return, while the median (50th percentile) suggests a 731.21% return. The annualized return across all simulations is 18.88%. These projections highlight the portfolio's potential for growth but also underscore the uncertainty and variability in returns. Investors should be prepared for a range of outcomes and consider their risk appetite when planning for the future.

Asset classes

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is overwhelmingly invested in stocks, accounting for nearly 100% of the allocation, with minimal exposure to cash and other asset classes. This heavy stock allocation aligns with a growth-oriented strategy but also increases exposure to market volatility. Diversifying across different asset classes, such as bonds or real estate, could help reduce risk and provide more stable returns. Investors should evaluate their risk tolerance and consider incorporating additional asset classes to create a more balanced portfolio.

Sectors

  • Technology
    77%
  • Financials
    5%
  • Health Care
    4%
  • Consumer Discretionary
    3%
  • Industrials
    3%
  • Telecommunications
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation reveals a significant concentration in technology, which represents over 77% of the portfolio. Other sectors, such as financial services, healthcare, and consumer cyclicals, have much smaller allocations. While the tech focus has driven past performance, it also exposes the portfolio to sector-specific risks. Diversifying into other sectors could mitigate these risks and enhance stability. Investors should assess their sector exposure and consider rebalancing to achieve a more diversified sector allocation that aligns with their investment goals.

Regions

  • Europe Developed
    57%
  • North America
    40%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly invested in Europe Developed and North America, with smaller allocations in Asia and other regions. This concentration provides exposure to developed markets but limits diversification across emerging markets. Geographic diversification can help mitigate region-specific risks and capture growth opportunities in different markets. Investors should evaluate their geographic exposure and consider expanding into other regions to enhance diversification and reduce potential risks associated with regional economic fluctuations.

Redundant positions

  • Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The portfolio contains highly correlated assets, particularly the Vanguard S&P 500 ETF and Vanguard Total World Stock Index Fund ETF Shares. This correlation suggests that these assets tend to move in the same direction, providing limited diversification benefits. Reducing overlap in the portfolio by minimizing exposure to highly correlated assets can enhance diversification and reduce risk. Investors should assess asset correlations and consider rebalancing to achieve a more diversified portfolio that aligns with their investment strategy.

Dividends

  • Apple Inc 0.40%
  • Accenture plc 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.34%

The portfolio's dividend yield stands at 1.34%, with contributions from Apple Inc, Accenture plc, and the ETFs. While the yield provides some income, it may not be sufficient for income-focused investors. The emphasis on growth-oriented stocks suggests a preference for capital appreciation over income generation. Investors seeking higher income may want to explore additional dividend-paying assets or strategies. Balancing growth and income can create a more well-rounded portfolio that meets diverse financial objectives.

Ongoing product costs

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from low costs, with the Vanguard S&P 500 ETF and Vanguard Total World Stock Index Fund ETF Shares having expense ratios of 0.03% and 0.07%, respectively. The Total Expense Ratio (TER) is 0.01%, indicating efficient cost management. Keeping costs low is essential for maximizing net returns over time. Investors should continue to monitor and manage costs, ensuring that expenses do not erode potential gains. Maintaining a focus on cost-effective investments can enhance long-term portfolio 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.

Before optimizing the portfolio, focus on addressing the high correlation between the Vanguard ETFs. Reducing overlap can improve diversification and risk management. The efficient frontier concept suggests that investors can optimize their portfolio by adjusting the asset mix to achieve the best possible return for a given level of risk. By moving along the efficient frontier, one can shift towards a riskier or more conservative portfolio. However, it's essential to balance risk and return, considering individual financial goals and risk tolerance.

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