A growth-focused portfolio with heavy healthcare weighting and moderate diversification
Report created on Jan 1, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
IX iShares Global Healthcare ETF
IXJ - US4642873255 50.81% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 43.11% -
KR Frequency Therapeutics Inc
KRRO 6.08%
The portfolio is heavily weighted towards ETFs, with iShares Global Healthcare ETF and Vanguard S&P 500 ETF constituting over 90% of the allocation. This structure leans towards a concentrated investment in healthcare and large-cap U.S. equities. While ETFs offer broad market exposure and diversification within sectors, the high concentration in just a few ETFs could limit the portfolio's ability to capture gains from other asset classes. Consider diversifying into additional asset classes or sectors to reduce potential risks associated with sector-specific downturns.
Growth
Historically, the portfolio has shown strong performance with a Compound Annual Growth Rate (CAGR) of 14.11%. This impressive growth rate indicates that the portfolio has benefited from favorable market conditions, particularly in the healthcare and large-cap sectors. However, the maximum drawdown of -30.28% highlights the potential volatility and risk associated with the current composition. It's important to remember that past performance doesn't guarantee future results, so maintaining a balanced approach is crucial for long-term success.
Projection
A Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a wide range of potential results for this portfolio. With 1,000 simulations, the outcomes show significant variability, including a 5th percentile result of nearly complete loss and a 67th percentile positive return. This indicates that while there is potential for high returns, there is also considerable risk involved. Keep in mind that simulations are based on historical data, and actual future performance can vary significantly due to unforeseen market conditions.
Asset classes
- Stocks 100%
The portfolio is almost entirely invested in stocks, with a minimal cash position. This heavy allocation towards equities can lead to higher growth potential but also increases exposure to market volatility. Compared to a balanced benchmark, which might include bonds or other fixed-income assets, this portfolio is less diversified. Introducing other asset classes like bonds or real estate could provide more stability and reduce volatility, aligning with a growth strategy that still considers risk management.
Sectors
- Health Care 62%
- Technology 14%
- Financials 6%
- Consumer Discretionary 4%
- Telecommunications 4%
- Industrials 3%
- Consumer Staples 2%
- Energy 1%
- Utilities 1%
- Real Estate 1%
- Basic Materials 1%
The portfolio's sector allocation is predominantly in healthcare, comprising over 60% of the total investment. While healthcare can offer growth opportunities due to innovation and demographic trends, this concentration poses a risk if the sector faces regulatory challenges or market downturns. Additionally, technology and financial services have notable allocations, providing some diversification. To mitigate sector-specific risks, consider expanding exposure to other sectors such as consumer staples or industrials, which can offer stability in different economic cycles.
Regions
- North America 86%
- Europe Developed 11%
- Japan 2%
- Australasia 1%
With an 86% allocation to North America, the portfolio is heavily skewed towards this region. While this aligns with a focus on U.S. equities, it may limit exposure to growth opportunities in other regions. Developed Europe and Japan have minor allocations, which provide some diversification. To enhance geographic diversity, consider increasing exposure to emerging markets or other developed regions, which can offer different growth dynamics and reduce dependence on the U.S. market.
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 allocation can be optimized using the Efficient Frontier, which identifies the best risk-return ratio for a given set of assets. By adjusting the weightings between existing assets, you could potentially achieve a more efficient portfolio. This doesn't necessarily mean adding new assets but rather reallocating within the current holdings to maximize returns for the given level of risk. Regularly reviewing and rebalancing can help maintain this optimal balance over time.
Dividends
- iShares Global Healthcare ETF 1.50%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.28%
The overall portfolio dividend yield is 1.28%, which is relatively modest. This yield is primarily driven by the iShares Global Healthcare ETF and Vanguard S&P 500 ETF. While dividends can provide a steady income stream, this portfolio prioritizes growth over income. For investors seeking higher income, exploring high-dividend stocks or funds could be beneficial. However, it's essential to balance the pursuit of income with the growth objectives of the portfolio.
Ongoing product costs
- iShares Global Healthcare ETF 0.42%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.23%
The portfolio's total expense ratio (TER) is 0.23%, which is quite competitive. The Vanguard S&P 500 ETF, with a TER of 0.03%, significantly contributes to keeping costs low. Low costs are advantageous as they enhance net returns over time. Regularly reviewing the cost structure and considering lower-cost alternatives, if available, can help maintain this efficiency. It's also important to ensure that cost savings don't come at the expense of diversification or 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.
Create your own report?
Join our community!
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