Balanced Profile with Strong US Focus and Low Diversification, High Exposure to Technology and Minimal Portfolio Costs

Report created on Dec 5, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is composed entirely of the Vanguard S&P 500 ETF, indicating a strong focus on US large-cap stocks. This ETF provides exposure to a broad range of sectors within the US market, which can be beneficial for capturing market growth. However, having all investments in a single ETF limits diversification, potentially increasing vulnerability to market-specific risks. To enhance diversification, consider incorporating other asset classes or regions. This could help mitigate risks associated with over-reliance on a single market or economic environment.

Growth Info

Historically, the portfolio has performed well with a CAGR of 14.24%, reflecting the strong performance of the US market, particularly in tech. The maximum drawdown of -34.03% highlights the potential volatility and market downturns that can impact returns. The fact that 90% of returns are concentrated in just 33 days underscores the importance of staying invested to capture these critical periods. Maintaining a long-term perspective and avoiding panic selling during downturns is crucial for achieving favorable returns over time.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio shows a wide range of potential outcomes. The median scenario projects an impressive 553.79% increase, while the 5th percentile shows a modest 94.03% growth. The annualized return across simulations is 15.43%, indicating a generally positive outlook. However, the variability in outcomes suggests that the portfolio could benefit from diversification to reduce risk. A more diversified approach could help smooth returns and provide more consistent performance across different market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with a negligible cash component. This high equity exposure can drive growth but also introduces significant risk, especially during market downturns. A balanced portfolio typically includes a mix of asset classes, such as bonds, to help manage risk. Consider gradually introducing other asset classes to achieve a more balanced risk-return profile. This could help cushion the impact of stock market volatility and provide more stability to the overall portfolio performance.

Sectors Info

  • Technology
    33%
  • Financials
    13%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%
  • Basic Materials
    2%

The sector allocation is heavily skewed towards technology, which accounts for over 33% of the portfolio. While this has driven past performance, it also increases vulnerability to sector-specific downturns. Other sectors like financials, healthcare, and consumer cyclicals provide some diversification but are still heavily weighted towards the US market. Consider diversifying into sectors that may perform well under different economic conditions to reduce reliance on any single sector. This could help mitigate risks associated with technological sector volatility.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The geographic composition is predominantly North American, with minimal exposure to Europe and Asia. This concentration increases exposure to US market risks and limits potential benefits from global economic growth. Expanding the geographic reach of the portfolio could provide access to diverse economic growth drivers and reduce dependency on a single region. This could be achieved by incorporating international equities or funds that offer exposure to emerging markets or other developed regions.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.20%

The portfolio has a dividend yield of 1.2%, which provides a modest income stream. While this yield is not particularly high, it can contribute to total returns and provide some cash flow. Reinvesting dividends can enhance compound growth over time. For investors seeking higher income, exploring dividend-focused investments or funds might be beneficial. This could help increase the portfolio's income potential without significantly altering its overall risk profile.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from extremely low costs, with a total expense ratio of just 0.03%. Low costs are crucial for maximizing net returns, as they minimize the drag on performance. Keeping investment costs low allows more of the portfolio's returns to compound over time. This cost efficiency is a significant advantage and should be maintained. When considering additional investments, prioritize low-cost options to preserve this benefit and enhance long-term growth potential.

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