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

Report created on Apr 8, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards U.S. equities, with a significant 62.5% allocation to the Vanguard Total Stock Market Index Fund ETF. This composition leans towards a growth-oriented strategy, focusing on broad market exposure. However, the concentration in a single asset class limits diversification. Compared to a balanced benchmark, this portfolio is less diversified, exposing it to sector-specific risks. To enhance diversification, consider incorporating different asset classes like bonds or international equities. This adjustment could help mitigate risks and smooth out returns over time, aligning better with a comprehensive investment strategy.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 6.22%, with a maximum drawdown of -25.94%. This performance suggests moderate growth with significant volatility, typical of a growth-focused strategy. Comparatively, a balanced benchmark might exhibit less volatility with a similar return profile. The portfolio's historical performance highlights the importance of balancing growth with risk management. Consider strategies to reduce drawdown, such as diversifying across more stable sectors or incorporating defensive assets. This could potentially enhance the stability of returns without sacrificing growth opportunities.

Projection Info

Monte Carlo simulations, which use historical data to model potential future outcomes, suggest varied results for this portfolio. The median outcome projects a -35.3% return, while the optimistic scenario reaches 38.1%. These projections highlight the inherent uncertainty in future performance. It's important to remember that past performance doesn't guarantee future results. To better prepare for potential outcomes, consider stress-testing the portfolio under different economic scenarios. This approach can help identify vulnerabilities and guide adjustments to improve resilience against market fluctuations, ensuring the portfolio remains aligned with long-term objectives.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, lacking diversification across asset classes like bonds or real estate. This singular focus on equities increases potential returns but also heightens risk, especially during market downturns. Compared to a diversified benchmark, this approach may lead to increased volatility. To achieve a more balanced risk-return profile, consider integrating fixed-income securities or alternative assets. These additions can provide stability and reduce overall portfolio risk, offering a buffer against equity market volatility and aligning with a more comprehensive investment strategy.

Sectors Info

  • Technology
    33%
  • Financials
    14%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio's sector allocation is heavily skewed towards technology, comprising 33% of the total investment. This concentration can lead to higher volatility, especially during periods of tech sector instability. While tech growth offers substantial upside, it also increases exposure to sector-specific risks. Compared to a diversified benchmark, this allocation is less balanced. Consider reallocating some investments to underrepresented sectors like energy or consumer defensives. This strategy can enhance diversification and potentially stabilize returns, mitigating the impact of sector downturns on overall portfolio performance.

Regions Info

  • North America
    97%
  • Europe Developed
    1%

With 97% of assets in North America, the portfolio is highly concentrated geographically, limiting exposure to international markets. This concentration increases vulnerability to U.S. market fluctuations and geopolitical events. Compared to a global benchmark, the portfolio lacks geographic diversification. To reduce risk, consider increasing exposure to developed and emerging markets outside North America. This approach can provide access to growth opportunities in diverse economic regions, enhancing the portfolio's resilience and aligning with a more globally diversified investment strategy.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    6%
  • Micro-cap
    4%

The portfolio's market capitalization allocation is skewed towards mega and big-cap stocks, comprising 72% of total investments. This focus on larger companies offers stability but may limit exposure to high-growth opportunities found in smaller firms. Compared to a balanced benchmark, this allocation might miss out on potential gains from small-cap stocks. To capture a broader range of growth opportunities, consider increasing the allocation to medium and small-cap companies. This strategy can enhance diversification and potentially boost returns, aligning with a more comprehensive investment approach.

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 can be optimized on the Efficient Frontier to potentially achieve a higher expected return of 13.57% with a risk level of 26.84%. The Efficient Frontier represents the best possible risk-return ratio for a given set of assets. By adjusting allocations among current holdings, the portfolio may achieve better efficiency. However, this optimization focuses solely on risk and return, not diversification or other goals. Consider rebalancing assets to improve this ratio, ensuring that adjustments align with broader investment objectives and risk tolerance.

Dividends Info

  • SPDR Dow Jones Industrial Average ETF Trust 1.60%
  • Invesco NASDAQ 100 ETF 0.70%
  • Defiance Quantum 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Weighted yield (per year) 1.25%

The portfolio's dividend yield stands at 1.25%, offering a modest income stream. While dividends provide a steady cash flow, the focus remains on growth rather than income generation. Compared to income-focused portfolios, this yield is relatively low. To enhance income potential, consider reallocating a portion of the portfolio to high-dividend-paying stocks or dividend-focused funds. This strategy can provide a more balanced approach, combining growth with income generation, and aligning with investors seeking both capital appreciation and regular income.

Ongoing product costs Info

  • ARK Innovation ETF 0.75%
  • SPDR Dow Jones Industrial Average ETF Trust 0.16%
  • Invesco NASDAQ 100 ETF 0.15%
  • Defiance Quantum 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Valkyrie Bitcoin Miners ETF 0.75%
  • Weighted costs total (per year) 0.14%

The portfolio's Total Expense Ratio (TER) is 0.14%, which is impressively low, supporting better long-term performance. Low costs are crucial as they enhance net returns over time. Compared to more expensive portfolios, this cost structure is a significant advantage. Maintaining this cost efficiency is beneficial, but consider reviewing the cost-effectiveness of each holding periodically. Ensure that low-cost funds continue to align with investment goals and explore opportunities to further reduce expenses, enhancing the portfolio's overall efficiency and long-term growth potential.

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