A growth-focused portfolio with high North American concentration and limited 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 with a moderate risk tolerance, seeking growth through equity exposure. It is ideal for those with a medium to long-term investment horizon, focusing on capital appreciation rather than income. The portfolio's concentration in U.S. equities and technology sectors suggests a preference for high growth potential, albeit with increased volatility. Investors should be comfortable with market fluctuations and willing to adjust allocations to manage risk effectively.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    20.00%
  • Invesco S&P MidCap Momentum ETF
    XMMO - US46137V4648
    20.00%
  • iShares Bitcoin Trust
    IBIT
    5.00%
  • NVIDIA Corporation
    NVDA - US67066G1040
    5.00%

This portfolio is heavily weighted towards equities, with 95% allocated in stocks and the remaining 5% in alternative assets. The Vanguard S&P 500 ETF dominates the portfolio at 50%, focusing on large-cap U.S. equities. This concentration in a single ETF means limited diversification. A benchmark comparison shows a typical balanced portfolio would have more diverse asset classes. The current structure exposes the portfolio to market-specific risks. Consider diversifying into other asset classes such as bonds or international equities to enhance risk management.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

The portfolio's historical performance is impressive, with a CAGR of 36.41%, significantly outperforming typical benchmarks. However, the max drawdown of -10.61% indicates potential volatility. This performance is driven by the strong U.S. market and tech sector growth. While past returns are promising, it's crucial to remember that they don't guarantee future outcomes. Re-evaluating the portfolio's risk tolerance in light of these figures can help maintain stability during market downturns.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

The Monte Carlo simulation projects a wide range of potential outcomes, with the median scenario showing substantial growth. The simulation uses historical data to estimate future performance, but it's important to note that this involves assumptions and uncertainties. With an annualized return of 80.41% across simulations, the projections are optimistic. However, relying solely on historical data can be misleading, so diversifying investments and adjusting allocations based on current market conditions is advisable.

Asset classes Info

  • Stocks
    95%
  • Other
    5%
  • Cash
    0%

The portfolio is concentrated in equities, with only 5% in alternative assets like the iShares Bitcoin Trust. This allocation limits diversification benefits, as a balanced portfolio typically includes bonds or other fixed-income securities. The lack of cash holdings may affect liquidity during market corrections. To improve diversification, consider reallocating a portion of equities into other asset classes, such as bonds or real estate, which can mitigate risk and provide more stability.

Sectors Info

  • Technology
    33%
  • Financials
    13%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    1%

Technology is the dominant sector, representing 33% of the portfolio, followed by financial services and consumer cyclicals. This tech-heavy allocation can lead to higher volatility, especially during market corrections or interest rate changes. The sectoral concentration is higher than typical benchmarks, which can increase risk exposure. Balancing the sector weights by including more defensive sectors like utilities or healthcare could reduce volatility and enhance stability during economic downturns.

Regions Info

  • North America
    94%
  • Europe Developed
    1%
  • Asia Developed
    0%

The portfolio is heavily skewed towards North America, with 94% exposure, leaving minimal allocation to other regions. This geographic concentration increases vulnerability to regional market fluctuations. Most benchmarks suggest a more balanced global exposure, which can provide better risk management. Consider increasing allocations to Europe or Asia to diversify geographic risk and take advantage of growth opportunities in emerging markets.

Market capitalization Info

  • Mega-cap
    42%
  • Mid-cap
    22%
  • Large-cap
    21%
  • Small-cap
    10%

The portfolio has a strong bias towards mega-cap stocks at 42%, with medium and big caps making up 43%. Small caps are underrepresented at 10%, which might limit growth potential. Mega-cap stocks offer stability but can be less agile during market shifts. A more balanced allocation across market caps, including increased exposure to small and medium caps, can enhance growth opportunities and improve diversification.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The Schwab U.S. Large-Cap Growth ETF and Vanguard S&P 500 ETF are highly correlated, limiting diversification benefits. High correlation means these assets tend to move in tandem, reducing the portfolio's ability to hedge against market downturns. Diversifying into less correlated assets could improve risk management. Consider replacing one of these ETFs with an asset that offers different growth dynamics or geographic exposure.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Invesco S&P MidCap Momentum ETF 0.20%
  • Weighted yield (per year) 0.72%

The portfolio's dividend yield is relatively low at 0.72%, with the Vanguard S&P 500 ETF contributing the most at 1.20%. While dividends can provide a steady income stream, growth-focused portfolios often prioritize capital appreciation. If income generation is a goal, consider increasing exposure to high-dividend stocks or ETFs. Balancing growth with income-producing assets could enhance overall returns and provide a buffer during market volatility.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is low at 0.10%, which is beneficial for long-term performance as lower costs mean more of the returns are retained. The Invesco S&P MidCap Momentum ETF has the highest individual cost at 0.34%, but overall, the costs are impressively managed. This efficient cost structure supports better net returns over time. Maintaining low costs should remain a priority, but ensure that cost-cutting doesn't compromise diversification or 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.

The portfolio could benefit from optimization using the Efficient Frontier, which seeks the best risk-return ratio by adjusting asset allocations. Currently, the portfolio's high correlation between assets limits diversification benefits. By reallocating funds to less correlated and more diverse assets, the portfolio can achieve a more efficient balance. This optimization focuses on maximizing returns for the given level of risk, enhancing overall portfolio 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.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

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.