A growth-oriented portfolio with high US exposure and limited diversification.

Report created on Dec 27, 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 the Vanguard S&P 500 ETF, comprising over 85% of the total allocation. This indicates a strong focus on large-cap US equities. While this provides exposure to established companies, it limits diversification. A more balanced portfolio might include a broader range of asset classes to spread risk. Consider diversifying with bonds or other asset types to cushion against market volatility and enhance stability.

Growth Info

Historically, the portfolio has shown impressive performance with a CAGR of 16.6%. However, it also experienced a significant max drawdown of -37.26%, indicating vulnerability during market downturns. This high volatility is typical for growth-focused portfolios. While past performance is promising, it's essential to remember that it doesn't guarantee future results. Maintaining a long-term perspective and preparing for potential market swings is crucial.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential outcomes, suggests a wide range of future returns. With a median projection of 1,308.18% and a high probability of positive returns, the outlook is optimistic. However, the 5th percentile projection shows potential for minimal gains, highlighting the inherent uncertainty of forecasts. Diversifying further can help mitigate risks associated with such variability.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly concentrated in stocks, accounting for nearly 100% of the assets. This concentration aligns with a high-risk, high-return growth strategy but lacks the balance seen in more diversified portfolios. Including other asset classes like bonds or real estate could provide stability and reduce overall risk. A more balanced allocation can help navigate different market conditions effectively.

Sectors Info

  • Technology
    36%
  • Consumer Discretionary
    14%
  • Financials
    12%
  • Health Care
    10%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio's sector allocation is heavily skewed towards technology, making up over 35% of the total. This concentration can lead to higher volatility, especially during periods of tech market fluctuations. While tech has been a strong performer, consider spreading investments across other sectors to reduce risk. A more even sector distribution can provide better protection against sector-specific downturns.

Regions Info

  • North America
    98%
  • Europe Developed
    1%
  • Asia Developed
    1%

Geographically, the portfolio is predominantly focused on North America, with over 97% exposure. This limits diversification benefits from international markets. While the US market is robust, global diversification can protect against regional economic downturns. Consider increasing exposure to international markets to capitalize on growth opportunities worldwide and enhance overall portfolio resilience.

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 suggests the best possible risk-return ratio for a given set of assets. Adjusting allocations between current holdings may enhance efficiency. However, it's important to balance optimization with diversification and personal investment goals. Efficiency doesn't guarantee diversification, so consider adding new asset classes for broader risk management.

Dividends Info

  • Microsoft Corporation 0.70%
  • Vanguard Small-Cap Value Index Fund ETF Shares 1.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.12%

The portfolio's overall dividend yield stands at 1.12%, providing a modest income stream. While growth-focused portfolios often prioritize capital gains over income, dividends can offer stability during volatile periods. Increasing exposure to high-dividend stocks or funds could enhance income potential without sacrificing growth. This approach can help balance risk and reward more effectively.

Ongoing product costs Info

  • VanEck Semiconductor ETF 0.35%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from impressively low costs, with a total expense ratio of just 0.04%. Low fees are advantageous for long-term performance, as they minimize the drag on returns. Maintaining a focus on cost-efficient investments is wise, but ensure that low costs do not come at the expense of necessary diversification or quality. Regularly reviewing fees can help optimize net returns.

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