A broadly diversified growth-focused portfolio with notable geographic and sector diversification

Report created on Jan 8, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio comprises seven ETFs, each contributing a specific percentage to the overall allocation. The portfolio is evenly divided among four major ETFs at 20% each, with smaller allocations to three additional ETFs. This structure provides a balanced exposure across various markets and sectors. Compared to typical benchmark portfolios, this composition leans towards growth with a focus on large-cap and international markets. Maintaining such a structure can offer stability while capturing growth opportunities. Consider periodically reviewing the allocation to ensure it aligns with your evolving financial goals and market conditions.

Growth Info

The portfolio has demonstrated a strong historical performance with a Compound Annual Growth Rate (CAGR) of 11.98%. This impressive return indicates the portfolio's capability to grow wealth over time. However, it also experienced a maximum drawdown of -32.64%, highlighting potential volatility. Comparing this to benchmarks, the performance aligns well with growth-focused portfolios. While past performance is not a guarantee of future results, understanding these trends can help set realistic expectations. Continue monitoring performance relative to benchmarks to ensure the portfolio remains on track.

Projection Info

Using Monte Carlo simulation, a method that projects potential future outcomes based on historical data, the portfolio shows promising prospects. The simulations reveal a 50th percentile outcome of 356.76% and a 67th percentile of 581.99% growth. These projections suggest a strong potential for future gains, with a 13.89% annualized return across simulations. While these are encouraging indicators, it’s essential to remember that simulations rely on past data and assumptions. Regularly review these projections to adjust strategies as needed, especially during market changes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99.11% allocated to this asset class. This high concentration in equities suggests a strong focus on capital appreciation, typical for growth-oriented investors. While this can lead to significant returns, it also increases exposure to market volatility. Compared to benchmark norms, the lack of fixed-income assets may limit diversification. Consider diversifying into other asset classes like bonds or real estate to mitigate risk and enhance stability, especially during market downturns.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    12%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is diverse, with technology leading at 22.87%, followed by financial services and industrials. This alignment provides a balanced exposure to various economic sectors. However, the tech-heavy allocation may introduce higher volatility, especially during interest rate changes. Compared to benchmarks, this sector diversity aligns well with growth strategies. Keeping an eye on sector trends can help anticipate shifts in performance. Regularly reassess sector weights to ensure they align with economic conditions and your risk appetite.

Regions Info

  • North America
    52%
  • Japan
    14%
  • Asia Emerging
    12%
  • Europe Developed
    11%
  • Asia Developed
    5%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%

The geographic allocation is well-diversified, with significant exposure to North America, Japan, and emerging markets. This spread enhances diversification and reduces reliance on any single region. Compared to benchmarks, this allocation is commendably balanced, offering exposure to both developed and emerging markets. However, the heavy North American weighting may still pose risks if regional markets underperform. Consider periodically reviewing geographic exposures to ensure they align with global economic trends and your investment objectives.

Redundant positions Info

  • Vanguard Mid-Cap Value Index Fund ETF Shares
    Vanguard Mega Cap Value Index Fund ETF Shares
    High correlation
  • iShares U.S. Tech Breakthrough Multisector ETF
    Vanguard Russell 1000 Growth Index Fund ETF Shares
    High correlation

The assets within the portfolio show some high correlation, particularly between the Vanguard Mega Cap Value and Mid-Cap Value ETFs, and between the iShares U.S. Tech and Vanguard Russell 1000 Growth ETFs. This correlation suggests that these assets may move similarly during market fluctuations, potentially limiting diversification benefits. To enhance diversification, consider replacing one of the correlated assets with another that offers different market exposure. This adjustment can improve risk management and optimize 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.

Click on the colored dots to explore allocations.

The portfolio can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with the current assets. By adjusting allocations among existing assets, you can potentially enhance returns for a given level of risk. This optimization does not necessarily mean adding new assets but reallocating existing ones to achieve efficiency. Regularly reassess the portfolio's position on the Efficient Frontier to ensure it remains aligned with your risk tolerance and return objectives.

Dividends Info

  • WisdomTree Japan Hedged Equity Fund 0.90%
  • Vanguard Mega Cap Value Index Fund ETF Shares 2.30%
  • iShares U.S. Tech Breakthrough Multisector ETF 0.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 1.50%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.40%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.72%

The portfolio's total dividend yield stands at 1.72%, contributing to overall returns. This yield is primarily driven by the Vanguard FTSE Emerging Markets and Mega Cap Value ETFs. While dividends provide regular income, the growth focus of this portfolio suggests that capital appreciation is the primary goal. For investors seeking income, consider increasing exposure to higher-yielding assets. However, if growth remains the priority, maintaining a balance between yield and capital gains is advisable.

Ongoing product costs Info

  • WisdomTree Japan Hedged Equity Fund 0.48%
  • Vanguard Mega Cap Value Index Fund ETF Shares 0.07%
  • iShares U.S. Tech Breakthrough Multisector ETF 0.40%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is impressively low and supports better long-term performance by minimizing costs. This aligns well with best practices, as lower fees can significantly enhance net returns over time. Compared to industry averages, this cost structure is highly competitive. While the current costs are favorable, continue to evaluate whether lower-cost alternatives become available. Regularly reviewing and optimizing costs can further improve portfolio efficiency.

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