A growth-focused portfolio heavily reliant on U.S. equities and technology sectors

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a growth-oriented mindset and moderate to high risk tolerance. The investor likely seeks substantial capital appreciation over a long-term horizon, willing to accept short-term volatility for potential higher returns. With a strong focus on U.S. equities and technology, this portfolio is ideal for those confident in the continued growth of these sectors. However, the investor should be comfortable with limited diversification and the associated risks, particularly during market downturns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    45.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    30.00%
  • Vanguard Extended Market Index Fund ETF Shares
    VXF - US9229086528
    15.00%
  • Vanguard Information Technology Index Fund ETF Shares
    VGT - US92204A7028
    10.00%

The portfolio is predominantly composed of ETFs with a significant tilt towards large U.S. equities. The Vanguard S&P 500 ETF makes up 45%, followed by the Invesco NASDAQ 100 ETF at 30%. This heavy concentration indicates a strong focus on large-cap stocks. While the Vanguard Extended Market Index Fund offers some diversification, the overall composition is less diversified compared to a typical balanced portfolio. This structure aligns with a growth-oriented strategy but may expose the portfolio to higher risks during market downturns. Consider introducing more asset classes to enhance diversification and reduce potential volatility.

Growth Info

Historically, the portfolio has delivered robust returns with a CAGR of 15.66%. This impressive growth aligns with the strong performance of U.S. equities, particularly in the technology sector. However, the portfolio also experienced a significant maximum drawdown of -29.52%, highlighting its vulnerability during market corrections. While past performance is not a guarantee of future results, understanding these trends can help set realistic expectations. To mitigate drawdowns, consider incorporating defensive assets or diversifying into sectors with lower volatility.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. The median projection shows a 544.1% increase, but there's a 5% chance of returns being as low as 85.8%. While the simulation indicates a high probability of positive outcomes, it's important to note that these projections rely on past data and assumptions. To potentially improve future outcomes, consider adjusting the portfolio to include less correlated assets, which might offer more stability across different market conditions.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • No data
    0%
  • Other
    0%

The portfolio is entirely invested in stocks, lacking diversification across different asset classes. This concentration can lead to higher volatility and risk, as stocks tend to be more sensitive to market fluctuations. A well-diversified portfolio typically includes a mix of asset classes such as bonds, real estate, and perhaps commodities, which can provide stability and reduce overall risk. To enhance diversification, consider integrating non-stock asset classes that align with your risk tolerance and investment goals.

Sectors Info

  • Technology
    44%
  • Consumer Discretionary
    11%
  • Telecommunications
    9%
  • Financials
    9%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The portfolio is heavily concentrated in the technology sector, comprising 44% of the total allocation. This sectoral bias can lead to higher volatility, especially during periods of regulatory changes or interest rate hikes. While technology has been a strong performer, overexposure can increase risk. Balancing the portfolio by investing in underrepresented sectors like healthcare or industrials may provide more stability and reduce sector-specific risks. This adjustment could enhance the portfolio's resilience against sector downturns.

Regions Info

  • North America
    99%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%
  • Africa/Middle East
    0%

With 99% of the portfolio's assets based in North America, there's limited geographic diversification. This concentration exposes the portfolio to U.S. market-specific risks, such as economic downturns or policy changes. Diversifying into international markets, including Europe and emerging economies, can help mitigate these risks and capture growth opportunities abroad. While the U.S. market has performed well historically, a more global approach could provide a buffer against regional volatility and enhance long-term growth potential.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    17%
  • Small-cap
    8%
  • Micro-cap
    3%

The portfolio is predominantly invested in mega and large-cap stocks, with 72% of assets in these categories. This focus aligns with a growth strategy but may limit exposure to the potential high returns of small and mid-cap stocks. While large-cap stocks are generally more stable, small and mid-caps can offer higher growth potential, albeit with increased risk. Consider adjusting the allocation to include more small and mid-cap stocks, which could enhance diversification and provide additional growth opportunities.

Redundant positions Info

  • Vanguard Information Technology Index Fund ETF Shares
    Invesco NASDAQ 100 ETF
    High correlation

The portfolio's assets are highly correlated, particularly between the Vanguard Information Technology Index Fund and the Invesco NASDAQ 100 ETF. High correlation means these assets tend to move in the same direction, reducing diversification benefits. In market downturns, this can lead to amplified losses. To improve risk management, consider replacing some correlated assets with those that have historically moved independently, thereby enhancing diversification and potentially smoothing out returns during volatile periods.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Extended Market Index Fund ETF Shares 1.00%
  • Weighted yield (per year) 0.93%

The portfolio's dividend yield is relatively low at 0.93%, reflecting its growth-focused strategy. While dividends can provide a steady income stream, growth portfolios typically prioritize capital appreciation over income. For investors seeking regular income, incorporating higher-yielding assets could be beneficial. However, if the primary goal is growth, maintaining the current focus on capital appreciation is appropriate. Balancing growth and income can be achieved by gradually introducing dividend-paying stocks without compromising growth potential.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Extended Market Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is impressively low at 0.08%, which is beneficial for long-term performance. Lower costs mean more of the portfolio's returns are retained, enhancing compounding over time. This cost efficiency aligns well with best practices in portfolio management. While further cost reductions might be challenging, maintaining or even slightly optimizing current expense ratios can continue to support strong long-term performance. Regularly reviewing and comparing costs with similar investment options can ensure ongoing cost-effectiveness.

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.

The portfolio's current asset allocation could potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return balance. However, the presence of highly correlated assets limits diversification benefits, suggesting that optimization should first focus on reducing these correlations. By reallocating investments towards less correlated assets, the portfolio could achieve a more efficient balance of risk and return. This approach maintains the growth focus while potentially reducing volatility and enhancing overall performance.

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.