A predominantly US-focused portfolio with significant tech exposure and moderate diversification
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
Balanced Investors
This portfolio suits an investor seeking balanced growth with moderate risk tolerance and a medium- to long-term investment horizon. It prioritizes exposure to large-cap US equities while offering some diversification through international stocks and alternative assets like Bitcoin. Ideal for individuals looking to grow their wealth steadily, it balances growth potential with moderate volatility. The focus on technology and US markets aligns with investors confident in these sectors' long-term prospects.
Positions
-
Vanguard S&P 500 ETF
VOO - US9229083632 80.00% -
Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 10.00% -
Fidelity Wise Origin Bitcoin Trust
FBTC 5.00% -
VanEck Semiconductor ETF
SMH - US92189F6768 5.00%
The portfolio is heavily weighted towards the Vanguard S&P 500 ETF, comprising 80% of the total allocation. This concentration in a single ETF provides broad exposure to large-cap US equities, which aligns well with the benchmark for US stock market performance. The remaining 20% is split among three other ETFs, including international stocks, Bitcoin, and semiconductors, offering some diversification. While the portfolio is moderately diversified, the heavy reliance on US equities could limit exposure to other growth opportunities globally. Consider gradually increasing the allocation to international markets to enhance diversification.
The historical data covers less than 2 years, which reduces the confidence in the calculated values.
Growth
Historically, the portfolio has shown a robust CAGR of 20.77%, indicating strong growth over time. This performance surpasses typical market benchmarks, reflecting the portfolio's significant exposure to high-performing US equities. However, the max drawdown of -10.10% highlights potential volatility, which is a common risk for growth-oriented portfolios. While past performance is promising, it doesn't guarantee future results. To manage risk, consider periodically reviewing the portfolio's allocation to ensure it aligns with your risk tolerance and investment goals.
Due to limited historical data, this may show extreme values that are not realistic.
Projection
Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows a wide range of potential outcomes. The 5th percentile projects a 478.8% return, while the 67th percentile suggests a 7,855.0% return. The median, or 50th percentile, indicates a potential 4,381.8% return. These simulations provide a probabilistic view of future performance based on historical data. However, remember that these projections are not guarantees. Regularly reassessing the portfolio's risk profile and ensuring it aligns with your financial objectives can help navigate future uncertainties.
Asset classes
- Stocks 95%
- Other 5%
- Cash 0%
- No data 0%
The portfolio is heavily skewed towards equities, with 95% in stocks and 5% in alternative assets, like Bitcoin. This allocation favors growth but may increase volatility, especially during market downturns. Compared to diversified benchmarks, this allocation is less balanced, potentially missing out on the stabilizing effects of bonds or other asset classes. To enhance diversification, consider introducing a small percentage of fixed-income securities. This could help mitigate risk while maintaining growth potential.
Sectors
- Technology 32%
- Financials 13%
- Consumer Discretionary 10%
- Health Care 9%
- Telecommunications 9%
- Industrials 7%
- Consumer Staples 5%
- Energy 3%
- Utilities 2%
- Basic Materials 2%
- Real Estate 2%
The sector allocation is notably tech-heavy, with technology making up 32% of the portfolio. This concentration can lead to higher volatility, especially during periods of technological disruption or regulatory changes. While tech has driven substantial growth, it's important to maintain a balanced sector exposure to protect against sector-specific risks. Gradually increasing exposure to underrepresented sectors like healthcare or consumer defensive could stabilize returns and improve resilience against market shifts.
Regions
- North America 84%
- Europe Developed 5%
- Asia Developed 2%
- Asia Emerging 2%
- Japan 2%
- Australasia 0%
- Africa/Middle East 0%
- Latin America 0%
- Europe Emerging 0%
The portfolio's geographic allocation is predominantly North American, with 84% exposure. This focus on the US market can limit exposure to growth opportunities in other regions. While the US has historically performed well, diversifying geographically can reduce risk and enhance potential returns. Consider increasing allocations to emerging markets or developed regions outside North America to capture broader global growth trends and mitigate regional risks.
Market capitalization
- Mega-cap 44%
- Large-cap 33%
- Mid-cap 16%
- Small-cap 1%
- Micro-cap 0%
The portfolio is heavily weighted towards mega-cap (44%) and big-cap (33%) stocks, which are typically more stable and less volatile than small-cap stocks. This allocation aligns with a conservative growth strategy, focusing on established companies. However, it might miss out on the high-growth potential of small-cap stocks. To balance stability with growth, consider a modest increase in small- to mid-cap exposures, which could offer higher returns over the long term without significantly increasing risk.
Dividends
- VanEck Semiconductor ETF 0.50%
- Vanguard S&P 500 ETF 1.00%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.10%
The portfolio's dividend yield stands at 1.10%, with the Vanguard Total International Stock Index Fund ETF contributing the highest yield at 2.80%. While dividends provide a steady income stream, the focus on growth-oriented assets means the overall yield is modest. For investors seeking income, this may not be sufficient. Consider adding higher-yielding assets to enhance the income component, balancing growth with regular returns.
Ongoing product costs
- VanEck Semiconductor ETF 0.35%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.05%
The portfolio's total expense ratio (TER) is impressively low at 0.05%, which is advantageous for long-term performance. Lower costs mean more of your investment returns are retained, compounding over time. This cost efficiency aligns with best practices in portfolio management, ensuring that expenses don't erode returns. Continue monitoring fees and consider reallocating to lower-cost options if available, maintaining the portfolio's 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 current asset allocation could potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the weights of existing assets to achieve the highest expected return for a given level of risk. While the portfolio's current composition is well-structured, exploring minor reallocations could further enhance performance. Regularly reviewing and rebalancing can ensure the portfolio remains aligned with your risk-return preferences.
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