A growth-focused portfolio with high tech concentration and limited international exposure

Report created on Jan 12, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily concentrated in ETFs, particularly the Vanguard S&P 500 and Invesco QQQ Trust, making up over 75% of the total. This allocation leans towards large-cap U.S. equities with a significant technology focus. While ETFs offer diversification within themselves, the portfolio lacks diversity across different asset classes. A more balanced portfolio typically includes bonds, international equities, and alternative investments, which can help manage risk during market downturns. Consider introducing other asset types to enhance diversification and potentially reduce volatility.

Growth Info

Historically, the portfolio has demonstrated impressive growth, with a Compound Annual Growth Rate (CAGR) of 19.67%. However, it also experienced a significant maximum drawdown of over 50%, indicating considerable volatility. While past performance is not indicative of future results, such high returns often come with increased risk. It's important to weigh the potential for high returns against the possibility of substantial losses. Regularly reviewing the risk level and ensuring it aligns with your long-term goals is crucial.

Projection Info

The Monte Carlo simulation projects a wide range of potential outcomes for this portfolio, using historical data to simulate future market conditions. The median scenario suggests a substantial growth of over 2,400%, but there’s a 5% chance of only achieving around 210% growth. These projections highlight the portfolio's high-risk, high-reward nature. Remember, simulations are based on past data and assumptions, which may not predict future market behavior accurately. Regularly revisiting these projections can help you stay informed about potential risks and opportunities.

Asset classes Info

  • Stocks
    100%

The portfolio is overwhelmingly weighted towards equities, with nearly 100% in stocks, and a negligible cash position. This heavy equity allocation aligns with a growth-oriented strategy but lacks balance. Common benchmarks often include a mix of stocks, bonds, and sometimes real estate or commodities to mitigate risk. Introducing other asset classes could provide stability and cushion against market volatility, potentially smoothing returns over time.

Sectors Info

  • Technology
    45%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Health Care
    8%
  • Financials
    8%
  • Consumer Staples
    6%
  • Industrials
    6%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    1%
  • Real Estate
    1%

Technology dominates this portfolio, comprising over 45% of the total allocation. While tech stocks have delivered strong returns, they can also be volatile, especially during economic shifts or regulatory changes. Other sectors like consumer cyclicals and financial services are present but underrepresented. A more balanced sector allocation could reduce sector-specific risks and enhance overall stability. Consider diversifying into sectors that may perform well in different economic environments.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio is heavily skewed towards North American equities, with over 98% exposure. This concentration limits the benefits of geographic diversification, which can protect against regional economic downturns. Common benchmark portfolios often include a significant portion of international equities to capture growth opportunities and spread risk globally. Expanding geographic exposure could enhance diversification and provide access to emerging market growth.

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 could potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. By adjusting the current asset allocation, it might be possible to enhance returns or reduce risk without altering the overall investment strategy. Keep in mind that optimizing for efficiency doesn't necessarily mean achieving perfect diversification. Regularly reassessing and rebalancing the portfolio can help maintain an optimal risk-return balance.

Dividends Info

  • Micron Technology Inc 0.30%
  • Invesco QQQ Trust 0.60%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.18%

The portfolio's dividend yield is relatively low at 1.18%, with the Schwab U.S. Dividend Equity ETF contributing the most. While dividends provide a steady income stream, this portfolio prioritizes growth over income. For investors seeking higher income, increasing exposure to dividend-focused investments could be beneficial. However, for growth-focused investors, the current yield may be adequate, allowing capital gains to drive returns.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is impressively low at 0.09%, thanks to the inclusion of low-cost ETFs like the Vanguard S&P 500. Keeping costs low is advantageous as it enhances net returns over time. High fees can erode investment gains, so maintaining a focus on cost-efficient investments is a smart strategy. Regularly reviewing costs and seeking lower-cost alternatives when possible can further improve long-term 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.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey