Balanced Growth Portfolio with High Diversification and Moderate Risk for Long-Term Investors

Report created on Dec 3, 2024

Risk profile Info

5/7
Growth
← Less risk More risk →

Diversification profile Info

5/5
Highly Diversified
← Less diversification More diversification →

Positions

The portfolio is composed of three ETFs: ProShares Ultra S&P500, WisdomTree Emerging Markets Efficient Core Fund, and WisdomTree International Efficient Core Fund. With 50% allocated to the ProShares Ultra S&P500, it has a strong focus on North American equities. The remaining 50% is equally divided between emerging and international markets, providing a well-rounded global exposure. This composition reflects a growth-oriented strategy, aiming to capture gains from developed and emerging markets. To enhance the portfolio, consider regularly reviewing the allocation to ensure it aligns with changing market conditions and personal financial goals.

Growth Info

Historically, this portfolio has delivered a CAGR of 10.34%, which is impressive for a growth-oriented strategy. However, it has experienced a maximum drawdown of -40.87%, indicating significant volatility. This performance suggests that while the portfolio has the potential for strong returns, it also comes with considerable risk. It's important to balance the desire for high returns with the ability to withstand market downturns. Regularly reviewing historical performance can help assess whether the current allocation remains suitable for your risk tolerance and investment objectives.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was assessed, assuming a hypothetical initial investment. The simulation suggests an annualized return of 6.91%, with a 50th percentile outcome of 79.3% growth over the investment period. However, the 5th percentile indicates potential losses of -61.51%, highlighting the inherent risk. Monte Carlo simulations offer a range of potential outcomes, helping to understand the probability of achieving specific investment goals. Consider using these insights to evaluate whether the portfolio's risk-return profile aligns with your long-term financial objectives.

Asset classes Info

  • Stocks
    91%
  • Cash
    7%
  • Other
    2%

The portfolio is heavily weighted towards stocks, with 90.75% allocated to equities, followed by 7.01% in cash, and minimal exposure to bonds and other assets. This asset class distribution is typical for a growth-oriented portfolio, aiming to maximize returns through equity investments. However, the lack of significant bond exposure could increase vulnerability to market volatility. It's essential to periodically reassess the asset class allocation to ensure it aligns with your risk tolerance and investment goals. Consider diversifying into bonds or other asset classes to reduce risk and enhance stability.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    9%
  • Industrials
    9%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is well-diversified, with significant exposure to Technology (26.35%), Financial Services (17.13%), and Consumer Cyclicals (11.12%). This diversification across sectors helps mitigate risks associated with individual industries. However, the high concentration in Technology could lead to increased volatility given the sector's potential for rapid changes. It's crucial to maintain a balanced sector allocation that reflects your investment objectives and risk tolerance. Regularly reviewing the sector distribution can help identify opportunities to adjust exposure based on economic trends and market conditions.

Regions Info

  • North America
    50%
  • Europe Developed
    16%
  • Asia Emerging
    13%
  • Asia Developed
    9%
  • Japan
    6%
  • Australasia
    2%
  • Latin America
    2%
  • Africa/Middle East
    2%

Geographically, the portfolio is diversified, with 50.07% in North America, followed by Europe Developed (16.20%) and Asia Emerging (12.91%). This distribution provides exposure to both developed and emerging markets, offering growth potential and diversification benefits. However, the substantial focus on North America may limit exposure to opportunities in other regions. It's important to periodically review geographic allocation to ensure it aligns with global economic trends and your investment strategy. Consider adjusting regional exposure to capture growth opportunities while managing risk effectively.

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 optimization chart suggests potential for improvement by adjusting the risk-return balance along the efficient frontier. By reallocating assets, the portfolio can be optimized to achieve either higher returns or reduced risk, depending on individual preferences. Investors seeking a more conservative approach can increase bond allocations, while those desiring higher returns might consider expanding equity exposure. However, before optimizing, it's crucial to ensure the portfolio aligns with personal financial goals and risk tolerance. Regular reviews and adjustments can help maintain an optimal balance over time.

Dividends Info

  • WisdomTree Emerging Markets Efficient Core Fund 2.20%
  • WisdomTree International Efficient Core Fund 2.60%
  • ProShares Ultra S&P500 0.70%
  • Weighted yield (per year) 1.55%

The portfolio's dividend yield stands at 1.55%, with contributions from WisdomTree Emerging Markets Efficient Core Fund (2.2%), WisdomTree International Efficient Core Fund (2.6%), and ProShares Ultra S&P500 (0.7%). While the yield is modest, it provides a steady income stream, complementing capital appreciation. Dividends play a crucial role in total returns, especially during market downturns. Regularly reviewing dividend yields and reinvesting them can enhance long-term growth. Consider focusing on dividend growth strategies to increase income potential and improve overall portfolio performance.

Ongoing product costs Info

  • WisdomTree Emerging Markets Efficient Core Fund 0.32%
  • WisdomTree International Efficient Core Fund 0.26%
  • ProShares Ultra S&P500 0.91%
  • Weighted costs total (per year) 0.60%

The portfolio's total expense ratio (TER) is 0.6%, with ProShares Ultra S&P500 having the highest cost at 0.91%. While the costs are relatively low, minimizing expenses is crucial for maximizing returns. Investment costs can erode gains over time, making it essential to regularly assess the cost-effectiveness of each holding. Consider exploring lower-cost alternatives or negotiating fees to reduce expenses. Maintaining a cost-efficient portfolio can significantly impact long-term performance and help achieve financial goals more effectively.

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