Growth-oriented portfolio dominated by Apple with limited geographic and sector diversification

Report created on Mar 2, 2025

Risk profile Info

5/7
Growth
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Diversification profile Info

1/5
Single-Focused
← Less diversification More diversification →

Positions

The portfolio is heavily weighted towards Apple Inc., which makes up 44.16% of the allocation. This concentration in a single stock can lead to increased risk, as the portfolio's performance is heavily tied to Apple's fortunes. While there are ETFs and a fund included, they are not sufficient to counterbalance this significant single-stock exposure. A well-diversified portfolio typically spreads risk across various assets, sectors, and geographies. To enhance diversification, consider reducing the weight of Apple and increasing exposure to other sectors or asset classes. This can help mitigate the risks associated with over-reliance on one company.

Growth Info

Historically, the portfolio has shown strong performance with a CAGR of 20.29%, which is impressive. However, it also experienced a maximum drawdown of -31.50%, indicating significant volatility. This volatility is consistent with a growth-oriented portfolio that is heavily concentrated in a single stock. Comparing this to a broader benchmark, the portfolio's returns are high, but so is the risk. To maintain strong performance while potentially reducing volatility, consider diversifying the portfolio further. This can help smooth out returns and provide a more stable investment experience.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance shows a wide range of potential outcomes. Monte Carlo analysis uses historical data to project possible future returns, showing a 5th percentile return of 16.3% and a 67th percentile return of 518.2%. This indicates that while there is potential for high returns, there is also a risk of lower outcomes. It's important to remember that past performance does not guarantee future results. To potentially improve future outcomes, consider diversifying the portfolio and reducing reliance on a single stock, which can help manage risk.

Asset classes Info

  • Stocks
    97%
  • Bonds
    3%

The portfolio is predominantly invested in stocks, accounting for 97% of the allocation, with only 3% in bonds. This heavy stock allocation aligns with a growth-focused strategy, but it also increases risk and volatility. Typically, a more balanced asset allocation includes a mix of stocks and bonds, which can help mitigate risk and provide more stable returns. To achieve better diversification, consider increasing the bond allocation, which can act as a stabilizer during market downturns, reducing overall portfolio volatility.

Sectors Info

  • Technology
    53%
  • Financials
    12%
  • Health Care
    12%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Telecommunications
    3%
  • Consumer Discretionary
    3%
  • Basic Materials
    1%
  • Real Estate
    1%
  • Energy
    1%
  • Utilities
    1%

The portfolio is heavily concentrated in the technology sector, which makes up 53% of the allocation. While technology has been a strong performer, this high concentration exposes the portfolio to sector-specific risks, such as regulatory changes or technological disruptions. A well-diversified portfolio typically includes a balanced mix of sectors to spread risk. Consider reducing the allocation to technology and increasing exposure to underrepresented sectors like consumer cyclicals or utilities, which can provide more stability and diversification benefits.

Regions Info

  • North America
    92%
  • Asien Schwellenländer
    2%
  • Europe Developed
    1%
  • Asien
    1%

Geographically, the portfolio is overwhelmingly focused on North America, with 92% of its allocation. This lack of international exposure limits diversification and increases vulnerability to regional economic downturns. A diversified portfolio often includes a mix of global assets to spread risk across different markets. Consider increasing exposure to international markets, particularly in Europe, Asia, or emerging markets, to enhance diversification and reduce reliance on the North American market. This can help mitigate regional risks and capture growth opportunities abroad.

Market capitalization Info

  • Mega-cap
    63%
  • Large-cap
    18%
  • Mid-cap
    9%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio is heavily weighted towards mega-cap stocks, which make up 63% of the allocation. While mega-cap stocks are generally more stable, they may offer limited growth potential compared to smaller companies. A well-diversified portfolio typically includes a mix of different market capitalizations to balance stability and growth. Consider increasing the allocation to small and mid-cap stocks, which can provide higher growth potential and diversification benefits. This can help enhance the overall growth prospects of the portfolio.

Redundant positions Info

  • iShares Core S&P Small-Cap ETF
    iShares Core S&P Mid-Cap ETF
    High correlation

The portfolio includes highly correlated assets, particularly the iShares Core S&P Small-Cap ETF and iShares Core S&P Mid-Cap ETF. High correlation means these assets tend to move in the same direction, limiting diversification benefits. A well-diversified portfolio includes assets with low correlation, which can help reduce overall risk. Consider replacing or reducing the allocation to highly correlated assets and introducing assets with low correlation to the existing portfolio. This can enhance diversification and improve risk management.

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 can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. Currently, the portfolio's concentration in a single stock and sector limits its efficiency. By reallocating assets to achieve a more balanced diversification across sectors and geographies, the portfolio can move closer to the Efficient Frontier. This optimization does not necessarily mean adding new assets but adjusting the current allocation to enhance the risk-return profile. Consider rebalancing the portfolio to achieve a more efficient allocation.

Dividends Info

  • Apple Inc 0.40%
  • iShares Core U.S. Aggregate Bond ETF 3.70%
  • iShares Core MSCI International Developed Market 1.60%
  • iShares Core MSCI Emerging Markets ETF 3.10%
  • iShares Core S&P Mid-Cap ETF 1.30%
  • iShares Core S&P Small-Cap ETF 2.10%
  • Invesco S&P 500® Quality ETF 0.80%
  • Visa Inc. Class A 0.40%
  • Weighted yield (per year) 0.78%

The portfolio's overall dividend yield is relatively low at 0.78%, which is typical for a growth-focused strategy. While dividends can provide a steady income stream, they are less of a priority in a portfolio aiming for capital appreciation. However, including higher dividend-yielding assets can add stability and reduce volatility. Consider increasing the allocation to dividend-paying stocks or funds, which can provide a cushion during market downturns and contribute to total returns over time.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • iShares Core MSCI International Developed Market 0.04%
  • iShares Core MSCI Emerging Markets ETF 0.09%
  • iShares Core S&P Mid-Cap ETF 0.05%
  • iShares Core S&P Small-Cap ETF 0.06%
  • BLACKROCK HEALTH SCIENCES OPPORTUNITIES PORTFOLIO INVESTOR A 1.09%
  • Invesco S&P 500® Quality ETF 0.15%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is relatively low, indicating cost-effectiveness. Low costs are beneficial as they enhance long-term returns by minimizing the drag on performance. However, the BLACKROCK HEALTH SCIENCES OPPORTUNITIES PORTFOLIO INVESTOR A has a higher expense ratio of 1.09%, which could be a drag on returns. Consider evaluating the cost-benefit of this fund and exploring lower-cost alternatives that offer similar exposure. Maintaining low costs can significantly improve long-term portfolio performance.

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