A growth-oriented portfolio with high U.S. concentration and tech-heavy exposure

Report created on Mar 6, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards U.S. equities, with a significant allocation to ETFs and large-cap stocks. The JPMorgan Nasdaq Equity Premium Income ETF holds the largest position, followed by individual stocks like Coca-Cola and Amazon. This composition aligns with a growth-focused strategy, but it lacks diversification across asset classes. Compared to a typical balanced portfolio, this one is more concentrated in equities, particularly in technology and consumer sectors. To enhance diversification, consider incorporating more asset classes like bonds or international equities, which could provide stability during market fluctuations.

Growth Info

Historically, the portfolio has delivered a robust CAGR of 15.07%, outperforming many traditional benchmarks. However, it also experienced a maximum drawdown of -21.08%, indicating significant volatility. This performance suggests that while the portfolio can generate strong returns, it is also susceptible to market downturns. To mitigate this risk, consider diversifying across more sectors and asset classes. While past performance is a useful gauge, remember it doesn't guarantee future results, so maintaining a balanced approach is crucial.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests an optimistic outlook with an average annualized return of 16.48%. The simulation shows a wide range of potential outcomes, from a modest 10% increase to an 815.7% gain. While this method provides a probabilistic view, it's important to note that it's based on historical trends and assumptions. To prepare for various scenarios, consider stress-testing the portfolio under different economic conditions and adjusting allocations to manage potential risks.

Asset classes Info

  • Stocks
    96%
  • No data
    4%

The portfolio is overwhelmingly concentrated in stocks, comprising 96% of the total allocation. This heavy equity exposure can lead to higher volatility, especially during market downturns. A more diversified asset class mix, including bonds or alternative investments, could provide a buffer against market swings. Compared to a diversified benchmark, this portfolio lacks balance, which might hinder long-term stability. To improve diversification, consider gradually reallocating a portion of the portfolio into non-equity asset classes.

Sectors Info

  • Technology
    31%
  • Consumer Discretionary
    23%
  • Consumer Staples
    21%
  • Financials
    11%
  • Telecommunications
    6%
  • Health Care
    3%
  • Industrials
    2%
  • Utilities
    1%
  • Basic Materials
    1%

The portfolio is notably tech-heavy, with 31% allocated to the technology sector, followed by consumer cyclicals and consumer defensive sectors. This concentration can lead to higher volatility, particularly during economic shifts affecting these sectors. A more balanced sector allocation, similar to broader market benchmarks, could reduce sector-specific risks. Consider diversifying into underrepresented sectors like healthcare or industrials to enhance resilience against sector downturns.

Regions Info

  • North America
    99%

With 99% of assets concentrated in North America, the portfolio lacks geographic diversification. This heavy U.S. focus can expose the portfolio to domestic market risks, such as economic downturns or political changes. Compared to global benchmarks, this portfolio's geographic allocation is limited. To mitigate these risks, consider including international equities, particularly from emerging markets, which can offer growth opportunities and diversification benefits.

Market capitalization Info

  • Mega-cap
    67%
  • Large-cap
    25%
  • Mid-cap
    4%

The portfolio is predominantly invested in mega-cap stocks, which account for 67% of the allocation. This focus on large companies can provide stability but may limit exposure to high-growth opportunities found in smaller companies. Compared to a more balanced market-cap allocation, this portfolio could benefit from including small- and mid-cap stocks. Diversifying across market capitalizations can enhance growth potential while managing risk.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    SPDR® Portfolio S&P 500 ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    High correlation

The portfolio contains highly correlated assets, particularly among the ETFs, which can limit diversification benefits. When assets move together, the portfolio may not fully capitalize on diversification during market downturns. To enhance diversification, consider reducing holdings in overlapping ETFs and adding uncorrelated assets. This adjustment can help manage risk and improve the portfolio's resilience in volatile markets.

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 asset mix may not be on the Efficient Frontier, which represents the best possible risk-return tradeoff. By adjusting allocations, particularly reducing highly correlated assets, you can potentially improve the portfolio's efficiency. This optimization focuses on achieving the best risk-return ratio with the existing assets, not necessarily diversification. Consider reallocating within the portfolio to better align with the Efficient Frontier, enhancing overall performance.

Dividends Info

  • Brookfield Corp 0.60%
  • JPMorgan Nasdaq Equity Premium Income ETF 10.30%
  • The Coca-Cola Company 2.80%
  • Microsoft Corporation 0.60%
  • Invesco NASDAQ 100 ETF 0.60%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Visa Inc. Class A 0.60%
  • Weighted yield (per year) 3.23%

The portfolio's dividend yield stands at 3.23%, with notable contributions from the JPMorgan Nasdaq Equity Premium Income ETF and Coca-Cola. Dividends can provide a steady income stream and contribute to total returns, especially in volatile markets. However, given the portfolio's growth focus, dividend income may not be a primary objective. If income is a priority, consider increasing allocations to higher-yielding assets, balancing growth and income needs.

Ongoing product costs Info

  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Invesco NASDAQ 100 ETF 0.15%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.09%

The total expense ratio (TER) of 0.09% is impressively low, supporting better long-term performance by minimizing costs. This efficient cost structure aligns well with best practices in portfolio management. However, always review the cost-benefit of each investment, especially if making changes to improve diversification. Keeping costs low while optimizing the portfolio can enhance overall returns, ensuring more of your investment works for you.

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