Growth-oriented portfolio with high exposure to technology and international small-cap value
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 high risk tolerance and a long-term investment horizon, aiming for substantial growth. The heavy allocation to technology and international small-cap stocks indicates a preference for sectors and regions with high growth potential but also higher volatility and risk. Such an investor is likely comfortable with market fluctuations and has the financial stability to withstand short-term losses in pursuit of long-term gains. The absence of bonds and cash underscores a focus on maximizing capital appreciation over income or short-term liquidity needs.
Positions
-
Avantis® International Small Cap Value ETF
AVDV - US0250728021 33.33% -
Invesco Dynamic Semiconductors ETF
PSI - US46137V6478 33.33% -
iShares Trust
TOPT - US46438G5707 33.33%
The portfolio is structured with equal weightings across three distinct assets: an international small-cap value ETF, a dynamic semiconductors ETF, and common stock from the iShares Trust. This composition reflects a strategic choice to blend growth potential from the technology sector with the value-driven approach of international small caps. The inclusion of common stock adds an element of direct equity investment, potentially increasing both the risk and return profile of the portfolio. This blend indicates a preference for high growth potential, albeit with a significant exposure to sector-specific and international market risks.
Historical data is limited for this portfolio, which reduces the confidence in the calculated values.
Growth
Historically, the portfolio has demonstrated a remarkable Compound Annual Growth Rate (CAGR) of 32.30%, with a maximum drawdown of -22.75%. The concentration in high-growth sectors, particularly technology, alongside international small-cap value investments, has likely contributed to these strong returns. However, it's essential to note that such high returns often come with increased volatility and risk, as evidenced by the substantial drawdown. The days contributing to 90% of returns being limited to just 8.0 highlights the portfolio's performance dependency on short, significant surges, which can be risky for investors with a low tolerance for volatility.
Due to limited historical data, this may show extreme values that are not realistic.
Projection
Utilizing Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows a wide range of potential future values. With 998 out of 1,000 simulations yielding positive returns and a median projected increase of 5,773.0%, the forward-looking outlook appears robust. However, it's crucial to remember that these projections are inherently uncertain and rely on past performance, which is not a reliable indicator of future results. The simulations underscore the portfolio's high-growth orientation but also highlight the need for caution due to the potential for significant variability in outcomes.
Asset classes
- Stocks 100%
- Cash 0%
- Bonds 0%
- Other 0%
The portfolio's assets are entirely allocated to stocks, with no diversification into bonds, cash, or other asset classes. This allocation strategy maximizes growth potential but also increases risk, particularly in market downturns when bonds or other defensive assets might mitigate losses. The absence of cash and bonds suggests a high risk tolerance and a long-term investment horizon, as short-term market fluctuations are less of a concern when the focus is on long-term growth.
Sectors
- Unknown 33%
- Technology 33%
- Industrials 10%
- Basic Materials 6%
- Consumer Discretionary 6%
- Financials 5%
- Energy 3%
- Consumer Staples 1%
- Utilities 1%
- Health Care 1%
- Telecommunications 1%
- Real Estate 0%
With a third of the portfolio's sector allocation unknown due to the iShares Trust component, the disclosed sectors reveal a heavy emphasis on technology, followed by industrials, basic materials, and consumer cyclicals. This sectoral distribution underscores the portfolio's growth focus but also its vulnerability to sector-specific downturns, particularly in the technology sector, which can be highly volatile. Diversifying into more sectors or increasing allocations to less volatile sectors could help mitigate this risk.
Regions
- Unknown 33%
- North America 31%
- Japan 12%
- Europe Developed 11%
- Africa/Middle East 4%
- Australasia 3%
- Asia Developed 3%
- Asia Emerging 2%
- Europe Emerging 0%
The geographic exposure of the portfolio is diverse, with significant allocations in North America, Japan, and developed European countries, alongside smaller exposures to emerging markets in Asia and Africa/Middle East. This international diversification can help spread risk and tap into growth opportunities worldwide. However, the substantial portion labeled as "unknown" due to the iShares Trust component limits the clarity of the portfolio's full geographic exposure, potentially obscuring certain risks or opportunities.
Market capitalization
- Unknown 33%
- Small-cap 22%
- Mid-cap 21%
- Large-cap 13%
- Mega-cap 4%
- Micro-cap 3%
The market capitalization breakdown reveals a balanced mix of small, medium, big, and mega-cap stocks, with a notable portion of the portfolio's allocation remaining unspecified. This diversification across market caps can help mitigate the risks associated with concentrating investments in companies of a particular size, as different market caps tend to perform differently across economic cycles. However, the significant "unknown" portion could mask a concentration risk not immediately apparent from the disclosed allocations.
Dividends
- Avantis® International Small Cap Value ETF 3.30%
- Invesco Dynamic Semiconductors ETF 0.10%
- iShares Trust 0.30%
- Weighted yield (per year) 1.23%
The dividend yields from the portfolio components vary significantly, with the international small-cap value ETF offering a substantial 3.30%, contrasting sharply with the much lower yields from the other assets. This variation in dividend income contributes to the portfolio's total yield of 1.23%, providing a modest income stream in addition to potential capital gains. For investors seeking both growth and income, maintaining or slightly increasing allocations to higher-yielding assets could enhance the portfolio's income-generating capability without substantially altering its growth-oriented focus.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Invesco Dynamic Semiconductors ETF 0.57%
- Weighted costs total (per year) 0.31%
The portfolio's total expense ratio (TER) of 0.31% is relatively low, indicating efficient cost management. Keeping investment costs low is crucial for enhancing long-term returns, as even small differences in fees can compound significantly over time. The individual expense ratios of the ETFs involved reflect a careful selection of cost-effective investment vehicles, aligning with best practices for maximizing the net return on investments.
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.
Considering the Efficient Frontier, the portfolio's current asset allocation suggests a strong focus on maximizing returns, potentially at the expense of higher volatility. The Efficient Frontier analysis could identify an optimal mix of assets that achieves the best possible risk-return ratio based on historical data. However, it's important to recognize that this optimization is constrained by the existing assets and their historical performances, which may not fully account for future market conditions or changes in asset correlations.
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