A tech-focused growth portfolio with low diversity and high North American exposure
Report created on Dec 31, 2024Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 77.47% -
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 13.50% -
FO FIDELITY OTC PORTFOLIO FIDELITY OTC PORTFOLIO
FOCPX - US3163891050 5.98% -
FS Fidelity Select Semiconductors Portfolio
FSELX - US3163908631 3.05%
The portfolio is heavily weighted towards equities, with a significant 77.47% allocation to the Vanguard S&P 500 ETF. This composition is common for growth-focused portfolios aiming for capital appreciation. However, the concentration in a single ETF limits diversification, which can increase risk. Diversification across different asset classes can help mitigate risks associated with market volatility. Considering a broader range of asset types, such as bonds or international equities, could enhance diversification and potentially stabilize returns.
Growth
Historically, the portfolio has performed well, with a compound annual growth rate (CAGR) of 15.72%. This impressive growth is indicative of the strong performance of the underlying assets, particularly the S&P 500. However, the maximum drawdown of -33.25% highlights the potential for significant losses during market downturns. While past performance is not indicative of future results, understanding these trends can help in setting realistic expectations. Regularly reviewing performance against benchmarks can provide insights into whether the portfolio is meeting its growth objectives.
Projection
The Monte Carlo simulation projects a wide range of potential outcomes, with an annualized return of 21.67% based on 1,000 simulations. This method uses historical data to estimate future performance, but it's important to note that these projections are not guarantees. The variability in outcomes underscores the inherent uncertainty in investing. Regularly updating simulations with the latest data can provide more accurate projections and help in adjusting strategies to align with evolving market conditions.
Asset classes
- Stocks 100%
The portfolio is almost entirely composed of stocks, with minimal exposure to other asset classes. While equities can offer high growth potential, they also come with higher volatility. A more balanced allocation across asset classes, such as bonds or real estate, could provide more stability and reduce overall risk. Diversifying into different asset classes can help cushion the portfolio during market downturns and contribute to achieving a more consistent return over time.
Sectors
- Technology 45%
- Financials 10%
- Health Care 9%
- Telecommunications 8%
- Consumer Discretionary 8%
- Industrials 6%
- Consumer Staples 5%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
- Consumer Discretionary 1%
The portfolio is heavily concentrated in the technology sector, accounting for 45.19% of the total allocation. This sector has been a significant driver of growth but also tends to experience higher volatility, especially during interest rate changes. A more balanced sector allocation could help mitigate sector-specific risks. Consider spreading investments across other sectors like healthcare or consumer goods to achieve a more stable return profile.
Regions
- North America 98%
- Europe Developed 1%
With 98.5% of the portfolio's assets allocated to North America, geographic diversification is limited. This concentration exposes the portfolio to region-specific risks, such as economic downturns or policy changes in the U.S. Including international equities can enhance diversification and provide exposure to different economic cycles and growth opportunities. A more balanced geographic allocation could improve the portfolio's resilience against regional market fluctuations.
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 suggests potential for optimization using the Efficient Frontier, which aims to maximize returns for a given level of risk. Adjusting asset weights could enhance the risk-return profile, but it's important to consider that efficiency is based solely on the current assets. Regularly reassessing and rebalancing the portfolio can help maintain an optimal risk-return balance and ensure alignment with changing market conditions and investment goals.
Dividends
- FIDELITY OTC PORTFOLIO FIDELITY OTC PORTFOLIO 10.40%
- Vanguard Information Technology Index Fund ETF Shares 0.60%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.63%
The portfolio's dividend yield is relatively low at 1.63%, reflecting its growth-oriented focus. Dividends can provide a steady income stream and enhance total returns, especially during periods of market volatility. Investors seeking income might consider increasing exposure to dividend-paying stocks or funds. Balancing growth and income objectives can help achieve a more comprehensive investment strategy that aligns with long-term financial goals.
Ongoing product costs
- FIDELITY OTC PORTFOLIO FIDELITY OTC PORTFOLIO 0.73%
- Fidelity Select Semiconductors Portfolio 0.65%
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.10%
The portfolio's total expense ratio (TER) is low, at 0.1%, indicating cost efficiency. Lower costs can significantly enhance long-term returns by minimizing the impact of fees on investment growth. Maintaining a focus on low-cost investment options, such as index funds or ETFs, can support better net returns over time. Regularly reviewing and optimizing costs can help ensure that the portfolio remains aligned with its cost-effective strategy.
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!
Compare your holdings
How much do the funds you hold actually overlap with the ones people weigh them against?
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