A growth-focused portfolio with significant exposure to India and U.S. equities

Report created on Feb 25, 2025

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 composed entirely of ETFs, with a significant focus on equities. It includes the Franklin FTSE India ETF at 40%, Schwab U.S. Large-Cap Growth ETF at 30%, and SPDR® Portfolio S&P 500 ETF at 30%. This allocation leans heavily toward growth, with a substantial portion in emerging markets. Compared to a typical benchmark, this portfolio is concentrated in fewer funds, which might limit diversification. It's important to ensure this concentration aligns with your risk tolerance and investment goals. Consider adding more asset classes or funds to increase diversification and potentially reduce risk.

Growth Info

Historically, this portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 14.46%. This impressive growth rate suggests that the portfolio has outperformed many benchmarks. However, it also experienced a maximum drawdown of -35.27%, indicating significant volatility. These figures highlight the potential for high returns but also underscore the associated risks. If you're comfortable with this level of volatility, maintaining the current allocation might be suitable. Otherwise, consider strategies to mitigate drawdowns, such as diversifying into less volatile assets.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, suggest a wide range of potential returns. With 1,000 simulations, the portfolio's 5th percentile outcome is a 74.2% gain, while the median (50th percentile) is 547.2%. This broad range reflects the inherent uncertainty in market conditions. While 990 simulations showed positive returns, it's crucial to remember that these projections are not guarantees. Regularly reviewing and adjusting your portfolio in response to market changes can help manage risks and align with your financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, with no allocation to cash or bonds. This single asset class focus can lead to higher volatility, as equities are typically more volatile than other asset classes. While this aligns with a growth-focused strategy, it may not be ideal for those seeking stability. Diversifying into other asset classes, such as bonds or real estate, could help balance risk and return. Such diversification can provide a cushion during market downturns and enhance long-term stability.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    1%

The portfolio's sector allocation is heavily weighted towards technology (29%), followed by financial services (16%) and consumer cyclicals (12%). This concentration in technology can lead to increased volatility, especially during periods of interest rate changes or market corrections. However, it also positions the portfolio for potential high growth, given the tech sector's historical performance. To mitigate risk, consider diversifying into underrepresented sectors like utilities or real estate, which typically offer more stable returns.

Regions Info

  • North America
    60%
  • Asien Schwellenländer
    40%

Geographically, the portfolio has a significant exposure to North America (60%) and Asia Emerging (40%), with no exposure to Europe or developed Asia. This geographic allocation can lead to concentration risk, particularly if specific regions underperform. While the focus on emerging markets offers growth potential, it also introduces higher volatility. Balancing this with exposure to developed markets could enhance diversification and reduce risk. Consider adding European or developed Asian equities to achieve a more balanced geographic spread.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    32%
  • Mid-cap
    10%
  • Small-cap
    1%

The portfolio is heavily weighted towards mega-cap stocks (57%), with lesser allocations to big (32%), medium (10%), and small caps (1%). Mega-cap stocks often provide stability and lower volatility due to their established market presence. However, they may offer less growth potential compared to smaller companies. To capture potential high-growth opportunities, consider increasing exposure to small and mid-cap stocks. This adjustment could enhance returns while maintaining a diversified risk profile.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    SPDR® Portfolio S&P 500 ETF
    High correlation

The Schwab U.S. Large-Cap Growth ETF and SPDR® Portfolio S&P 500 ETF are highly correlated, meaning they tend to move together in the market. High correlation can limit diversification benefits, as these assets may not provide protection during market downturns. To improve diversification, consider replacing one of these ETFs with an asset that has a lower correlation to the rest of the portfolio. This change could enhance risk management and improve the portfolio's overall 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's current structure could benefit from optimization using the Efficient Frontier, which seeks the best risk-return ratio. However, the presence of highly correlated assets limits diversification benefits. Before optimizing, consider reducing overlap by replacing one of the correlated ETFs. This adjustment can enhance diversification and potentially improve the risk-return profile. Once this is addressed, optimization can help identify the most efficient allocation of existing assets.

Dividends Info

  • Franklin FTSE India ETF 1.00%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.91%

The portfolio's overall dividend yield is 0.91%, with contributions from each ETF. Dividends can provide a steady income stream and contribute to total returns, especially in volatile markets. However, this yield is relatively low, reflecting the growth-oriented focus. If income generation is a priority, consider incorporating higher-yielding assets. This could involve adding dividend-focused ETFs or stocks, which might offer more consistent income while complementing the growth strategy.

Ongoing product costs Info

  • Franklin FTSE India ETF 0.19%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is 0.09%, which is impressively low. Low costs are beneficial as they enhance net returns over time, allowing more of your investment to grow. This aligns well with long-term growth strategies, as compounding benefits from lower fees. It's important to continue monitoring expense ratios, as even small increases can impact long-term performance. Maintaining a focus on cost-efficient investments is a positive aspect of this portfolio.

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