A growth-focused portfolio with a strong tech presence and moderate global 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 suits an investor with a high risk tolerance and a focus on growth, seeking substantial capital appreciation over the long term. It is ideal for individuals who are comfortable with market volatility and can withstand potential drawdowns in pursuit of higher returns. The portfolio's heavy weighting in technology and U.S. equities aligns with investors looking to capitalize on high-growth sectors. This investor likely has a long investment horizon, allowing time to recover from market fluctuations and benefit from compounding growth.

Positions

  • iShares Core S&P 500 ETF
    IVV - US4642872000
    30.00%
  • Vanguard Information Technology Index Fund ETF Shares
    VGT - US92204A7028
    30.00%
  • Vanguard Real Estate Index Fund ETF Shares
    VNQ - US9229085538
    20.00%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares
    VEA - US9219438580
    10.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares
    VWO - US9220428588
    10.00%

The portfolio is composed of 100% ETFs, with a significant emphasis on equities, particularly in technology and real estate sectors. With 30% in the S&P 500 ETF and another 30% in a tech-focused ETF, the portfolio leans heavily towards U.S. equities. This composition aligns well with a growth strategy, as it seeks capital appreciation through exposure to high-growth sectors. However, the concentration in U.S. markets and tech sectors may increase volatility. To further diversify, consider adding ETFs with broader geographic or sectoral exposure to mitigate potential risks associated with market-specific downturns.

Growth Info

Historically, this portfolio has delivered a CAGR of 13.37%, indicating robust growth over time. This is a strong performance compared to typical benchmarks, reflecting the portfolio's growth-oriented strategy. However, it has also experienced a significant max drawdown of -33.88%, highlighting its susceptibility to market volatility. Such a drawdown suggests that while the portfolio can achieve high returns, it also carries substantial risk. Investors should be prepared for potential downturns and consider strategies to manage risk, such as diversifying further or incorporating more defensive assets.

Projection Info

The Monte Carlo simulation, a method using historical data to project future outcomes, shows a wide range of potential returns. The median projection suggests a 258.9% growth, while the 5th percentile indicates a slight loss. This highlights the uncertainty and variability in future performance. Although 949 out of 1,000 simulations resulted in positive returns, it's important to remember that past performance does not guarantee future results. Investors should use these projections as a guideline but remain flexible to adjust their strategies as market conditions evolve.

Asset classes Info

  • Stocks
    79%
  • Real Estate
    20%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is heavily weighted towards stocks, comprising 79.4% of the total allocation, with the remainder in real estate. This allocation can drive growth, but it also increases exposure to market risk. Compared to typical benchmark portfolios, which might include bonds or other asset classes for balance, this portfolio is more aggressive. While the high stock allocation aligns with growth objectives, consider introducing other asset classes, such as bonds or commodities, to enhance diversification and potentially reduce volatility.

Sectors Info

  • Technology
    43%
  • Real Estate
    21%
  • Financials
    8%
  • Consumer Discretionary
    6%
  • Industrials
    5%
  • Health Care
    5%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    1%

With 42.8% in technology, the portfolio is significantly concentrated in this sector, which can lead to higher volatility, especially during interest rate fluctuations. Real estate follows at 21%, providing some diversification. However, other sectors like financial services and consumer cyclicals are underrepresented. This sectoral concentration could expose the portfolio to sector-specific risks. To mitigate this, consider balancing the allocation by increasing exposure to underrepresented sectors, which could provide stability and reduce the impact of sector-specific downturns.

Regions Info

  • North America
    81%
  • Asia Emerging
    6%
  • Europe Developed
    6%
  • Asia Developed
    3%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Australasia
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is highly concentrated in North America, accounting for 80.7% of the allocation. This limits exposure to international markets, which could offer growth opportunities and diversification benefits. While the focus on North America aligns with a U.S.-centric growth strategy, it may miss out on potential gains from emerging markets or developed regions outside the U.S. Consider increasing exposure to these areas to diversify geographic risk and capture potential growth in different economic environments.

Dividends Info

  • iShares Core S&P 500 ETF 1.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.83%

With a total yield of 1.83%, the portfolio offers modest dividend income, primarily driven by the real estate and emerging markets ETFs. While dividends can provide a steady income stream, this portfolio is more focused on growth rather than income generation. For investors seeking higher income, consider increasing exposure to dividend-focused ETFs or funds. However, given the growth focus, the current yield is reasonable, supporting the overall strategy of capital appreciation over income.

Ongoing product costs Info

  • iShares Core S&P 500 ETF 0.03%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the impact of fees on returns. Compared to industry averages, this TER is very competitive, allowing for more of the portfolio's growth to benefit the investor. Maintaining low costs is a positive aspect of this portfolio, and investors should continue to monitor expenses to ensure they remain minimal, potentially exploring even lower-cost options if available.

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 be optimized using the Efficient Frontier, which seeks to achieve the highest possible return for a given level of risk. By adjusting the allocation among current assets, it may be possible to enhance the risk-return ratio. This optimization does not necessarily mean adding new assets but rather tweaking existing ones to find the most efficient balance. Investors should consider using portfolio analysis tools to explore potential adjustments, ensuring that any changes align with their risk tolerance and investment goals.

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