A growth-focused portfolio with significant tech exposure and limited geographic 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

Growth Investors

This portfolio is suited for investors with a growth-oriented mindset and a moderate to high-risk tolerance. Ideal for those with a long-term investment horizon, it prioritizes capital appreciation over income generation. The focus on large-cap U.S. equities and technology sectors appeals to investors comfortable with market volatility and seeking substantial growth potential. However, the lack of diversification may not suit conservative investors or those who prioritize stability.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    36.39%
  • Vanguard Communication Services Index Fund ETF Shares
    VOX - US92204A8844
    32.02%
  • Invesco QQQ Trust
    QQQ - US46090E1038
    31.59%

The portfolio consists of three primary ETFs, with the Vanguard S&P 500 ETF making up 36.39%, Vanguard Communication Services Index Fund ETF at 32.02%, and Invesco QQQ Trust at 31.59%. This structure indicates a strong focus on large-cap U.S. equities. Compared to a typical diversified benchmark, this portfolio is heavily concentrated in a few funds, which can lead to increased risk. It's crucial to consider adding more asset classes or funds to spread risk and enhance diversification.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 14.12%. This impressive growth surpasses many benchmarks, though it's essential to note the significant maximum drawdown of -32.36%. This indicates that while the portfolio can achieve high returns, it can also experience substantial declines. Investors should weigh these risks and consider if they align with their risk tolerance, especially during volatile market periods.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a median return of 479.5% over the investment horizon. While 991 out of 1,000 simulations show positive returns, it's important to remember that past performance does not guarantee future results. Investors should use these projections as a guide, keeping in mind the inherent uncertainties and potential for varied outcomes.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is entirely composed of stocks, with no allocation to other asset classes like bonds or real estate. This lack of diversification can lead to higher volatility, as stocks tend to be more sensitive to market fluctuations. To mitigate risk, consider introducing different asset classes, which can provide stability and reduce overall portfolio volatility by offsetting stock market downturns.

Sectors Info

  • Telecommunications
    39%
  • Technology
    30%
  • Consumer Discretionary
    9%
  • Health Care
    5%
  • Financials
    5%
  • Consumer Staples
    4%
  • Industrials
    4%
  • Utilities
    1%
  • Energy
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

With a 39% allocation to Communication Services and 30% to Technology, the portfolio is heavily concentrated in these sectors. While these sectors have driven growth in recent years, they are also more susceptible to regulatory changes and market volatility. Balancing sector exposure by including more defensive sectors, like Consumer Defensive or Utilities, could help stabilize returns during economic downturns.

Regions Info

  • North America
    99%
  • Europe Developed
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%

The portfolio's geographic exposure is overwhelmingly concentrated in North America, with 99% of assets allocated there. This lack of international diversification might expose the portfolio to regional economic risks. To reduce potential risks associated with economic downturns in the U.S., consider increasing exposure to international markets, particularly in developed and emerging regions.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    29%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio leans heavily towards mega-cap stocks, comprising 51% of the allocation, followed by big caps at 29%. While large-cap stocks offer stability and liquidity, they may not provide the same growth potential as smaller-cap stocks. Introducing more small and mid-cap exposure could enhance growth prospects and improve diversification, though it may also increase volatility.

Dividends Info

  • Invesco QQQ Trust 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Communication Services Index Fund ETF Shares 0.70%
  • Weighted yield (per year) 0.85%

With a total dividend yield of 0.85%, the portfolio provides limited income through dividends. This yield is relatively low compared to income-focused portfolios, which may not suit investors seeking regular cash flow. If income generation is a priority, consider incorporating higher-yielding assets or funds to boost dividend income while maintaining growth potential.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Communication Services Index Fund ETF Shares 0.10%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is 0.11%, which is impressively low. This cost efficiency supports better long-term performance, as lower costs mean more of the returns stay in the investor's pocket. Maintaining a low-cost structure is crucial for optimizing returns over time, so continue to monitor and manage expenses to ensure they remain competitive.

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 Efficient Frontier analysis suggests that the portfolio could be optimized for a higher expected return of 18.69% while maintaining the current risk level. This involves reallocating within the existing assets to achieve a better risk-return ratio. However, it's important to note that efficiency here refers to maximizing returns relative to risk, not necessarily diversification or other investment goals.

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