A growth-focused portfolio with strong U.S. exposure and moderate diversification across asset classes

Report created on Dec 6, 2024

Risk profile Info

5/7
Growth
← Less risk More risk →

Diversification profile Info

5/5
Highly Diversified
← Less diversification More diversification →

Positions

This portfolio is composed primarily of equity ETFs, with a significant focus on U.S. dividend and large-cap growth stocks, each making up 30% of the portfolio. This suggests a growth-oriented strategy with a focus on stability through dividends. The inclusion of small-cap value, developed and emerging markets, and treasury ETFs provides some diversification. The overall asset allocation leans heavily towards equities, with a smaller allocation to bonds. This composition is relevant as it indicates a higher risk profile, given the equity dominance, which can lead to greater volatility but also potential for higher returns. To balance risk, consider increasing bond or other fixed-income investments.

Growth Info

Historically, this portfolio has delivered a compound annual growth rate (CAGR) of 14.65%, which is quite impressive. However, it has also experienced a maximum drawdown of nearly 30%, indicating significant volatility. This performance highlights the potential for substantial growth, but also the risk of considerable short-term losses. It's important to understand that past performance is not indicative of future results, and market conditions can change. To mitigate drawdowns, consider diversifying further into less volatile asset classes or employing hedging strategies.

Projection Info

The Monte Carlo simulation, using 1,000 iterations, projects a wide range of potential outcomes for this portfolio. The median scenario suggests a substantial return, with the portfolio value potentially increasing by over 190%. However, there's still a risk of loss, as indicated by the 5th percentile projection of a nearly 19% decrease. Monte Carlo simulations use historical data to forecast future performance, but they cannot account for unforeseen market events or changes in economic conditions. Regularly reviewing and adjusting the portfolio can help manage risks and align with changing market dynamics.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising nearly 90% of the total allocation, with bonds making up just under 10%. This skew towards equities suggests a focus on capital appreciation over income stability. While equities offer growth potential, they also come with higher volatility. The bond allocation provides some stability and income, but may not be sufficient to significantly reduce overall portfolio risk. To enhance diversification and potentially reduce volatility, consider increasing exposure to bonds or alternative asset classes, such as real estate or commodities.

Sectors Info

  • Technology
    21%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Industrials
    9%
  • Energy
    7%
  • Telecommunications
    6%
  • Consumer Staples
    6%
  • Basic Materials
    3%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation within this portfolio is diverse, with significant exposure to technology, financial services, and consumer cyclicals. This balance suggests a strategy aimed at capturing growth across various economic sectors. However, the concentration in technology could pose a risk if that sector underperforms. A well-diversified sector allocation can help mitigate sector-specific risks and enhance overall portfolio stability. To further diversify, consider increasing exposure to underrepresented sectors like utilities or real estate, which may perform differently under various economic conditions.

Regions Info

  • North America
    71%
  • Asia Emerging
    6%
  • Europe Developed
    6%
  • Asia Developed
    3%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly focused on North America, accounting for over 70% of the allocation. This concentration indicates a reliance on the U.S. market, which can be both advantageous and risky depending on domestic economic conditions. Diversifying geographically can help mitigate country-specific risks and provide exposure to growth opportunities in other regions. Consider increasing allocations to emerging markets or other developed regions to achieve a more balanced global exposure, which can enhance diversification and potentially improve risk-adjusted returns.

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 current portfolio can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves reallocating existing assets to achieve a balance where expected returns are maximized for a given level of risk. While the portfolio is already diversified, slight adjustments in asset weightings could enhance efficiency. It's important to note that optimization doesn't necessarily mean adding new assets but rather adjusting the current allocation to improve the risk-return profile. Regularly revisiting the portfolio's allocation can help maintain its alignment with your financial goals and risk tolerance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Schwab U.S. Dividend Equity ETF 2.50%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 3.00%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.30%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 3.70%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 1.90%

The portfolio's overall dividend yield is 1.9%, with notable contributions from the Schwab U.S. Dividend Equity ETF and various bond ETFs. Dividends can provide a steady income stream, which is particularly beneficial during periods of market volatility. While growth-focused, incorporating dividend-paying assets can enhance total returns and provide a cushion against market downturns. To increase income, consider reallocating towards higher-yielding assets, but be mindful of the potential trade-off with growth potential. Balancing growth and income is key to achieving long-term financial goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The total expense ratio (TER) for this portfolio is 0.07%, which is relatively low and advantageous for long-term growth, as lower costs mean more of your returns are retained. High costs can erode returns over time, so maintaining a low-cost structure is crucial. Regularly reviewing and comparing expense ratios of existing and potential new investments can help ensure cost efficiency. Consider reallocating from higher-cost to lower-cost funds if they offer similar exposure and performance potential, allowing you to optimize returns without sacrificing diversification.

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