A growth-focused portfolio with strong US equity exposure and moderate international diversification

Report created on Dec 11, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of equity ETFs, with a significant 60% allocation to the SPDR S&P 500 ETF Trust. This indicates a strong focus on US large-cap stocks. Additionally, there is a 10% allocation each to international small-cap value, US small-cap value, real estate, and international stocks, providing some diversification. This mix suggests a growth-oriented strategy, aiming to capitalize on equity market returns. However, the heavy reliance on US equities may limit international growth opportunities. To enhance diversification, consider increasing exposure to other regions or asset classes.

Growth Info

Historically, the portfolio has demonstrated a robust compound annual growth rate (CAGR) of 14.93%, which is quite impressive. However, it also experienced a maximum drawdown of -36.24%, indicating vulnerability during market downturns. The performance is driven by the strong historical returns of US equities. While past performance is not indicative of future results, understanding these trends can help manage expectations. To mitigate potential losses, consider strategies such as rebalancing or incorporating assets with lower correlations to equities.

Projection Info

Using Monte Carlo simulations, which analyze potential future outcomes based on historical data, the portfolio's projections are promising. The median scenario suggests a 299.19% return, while more optimistic scenarios reach up to 496.7%. With 940 out of 1,000 simulations showing positive returns, the outlook is favorable. However, it's important to note that simulations rely on historical data, which may not account for future market changes. Regularly reviewing and adjusting the portfolio can help align it with evolving market conditions and personal goals.

Asset classes Info

  • Stocks
    90%
  • Real Estate
    10%

This portfolio is heavily weighted towards equities, making up nearly 90% of the allocation, with a small 10% in real estate. This concentration in stocks suggests a higher risk profile, as equities tend to be more volatile than other asset classes like bonds or cash. While this could lead to higher returns, it also increases exposure to market volatility. To balance risk and reward, consider diversifying into other asset classes, such as fixed income, which can provide stability and income during market fluctuations.

Sectors Info

  • Technology
    22%
  • Financials
    15%
  • Real Estate
    12%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    8%
  • Telecommunications
    6%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Utilities
    2%

Sector-wise, the portfolio is well-diversified across various industries, with the highest concentration in technology at 22.3%. This reflects a bet on the continued growth of tech companies. Financial services, real estate, and consumer cyclicals also have notable allocations, providing a mix of growth and defensive sectors. However, the heavy tech focus could expose the portfolio to sector-specific risks. To mitigate this, consider adjusting allocations to ensure a balanced exposure across sectors, reducing reliance on any single industry.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Japan
    5%
  • Asia Emerging
    2%
  • Australasia
    1%
  • Asia Developed
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly exposed to North America, with over 81% allocation. This strong focus on the US market could limit global diversification benefits. While the US has been a strong performer, international markets offer unique opportunities and risks. Allocating more to regions like Europe, Asia, or emerging markets could enhance diversification and capture growth in different economic cycles. Balancing geographic exposure can help reduce risks associated with regional economic downturns.

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.

This portfolio can potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio by adjusting asset allocations. Given the current assets, reallocating between them could enhance efficiency. For instance, slightly reducing the concentration in US equities while increasing exposure to underrepresented regions or asset classes might improve diversification without sacrificing returns. It's important to regularly review and rebalance the portfolio to maintain optimal efficiency as market conditions change.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.00%
  • Avantis® U.S. Small Cap Value ETF 1.50%
  • SPDR S&P 500 ETF Trust 1.20%
  • Vanguard Real Estate Index Fund ETF Shares 3.90%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.85%

The portfolio offers a moderate dividend yield of 1.85%, with the highest contributions from real estate and international small-cap value ETFs. Dividends provide a steady income stream, which can be reinvested to enhance returns or used for cash flow needs. While growth is the primary focus, incorporating dividend-paying assets can add stability and reduce reliance on capital appreciation. Consider increasing allocations to high-dividend sectors or funds to boost income without sacrificing growth potential.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) stands at 0.14%, which is relatively low and advantageous for long-term investors. Lower costs mean more of your investment returns are retained, compounding over time. However, the Avantis ETFs have higher fees compared to others in the portfolio. To further reduce costs, consider evaluating the cost-benefit ratio of each ETF and exploring lower-cost alternatives. Keeping expenses in check is crucial for maximizing net returns over the investment horizon.

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