A growth-focused portfolio with significant exposure to major US indices and limited 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 seeking significant growth over a long-term horizon. It leans heavily on major US indices and technology stocks, appealing to those comfortable with market volatility in pursuit of substantial returns. Ideal for individuals aiming to capitalize on the growth potential of large-cap equities, this portfolio requires patience and a willingness to endure market fluctuations. Investors should be prepared for short-term losses while focusing on long-term wealth accumulation.

Positions

  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    40.47%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    39.88%
  • Fidelity® High Dividend ETF
    FDVV - US3160928400
    19.59%
  • Fidelity® Government Money Market Fund
    SPAXX - US31617H1023
    0.03%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    0.03%

This portfolio is heavily concentrated in two major US index ETFs, the Invesco NASDAQ 100 and Vanguard S&P 500, making up over 80% of the total allocation. The remaining portion is primarily in a high dividend ETF, with negligible allocations to a money market fund and an international stock index ETF. Compared to typical growth portfolios, this one shows limited diversification, focusing heavily on large-cap US equities. To enhance diversification, consider adding more varied asset classes, such as bonds or international equities, to better balance risk and potential returns.

Growth Info

Historically, this portfolio has shown strong performance with a Compound Annual Growth Rate (CAGR) of 17.35%, significantly outperforming many benchmarks. However, it experienced a maximum drawdown of -26.68%, indicating vulnerability during market downturns. While past performance is a useful indicator, it doesn't guarantee future success. To mitigate potential losses in future downturns, consider incorporating more defensive assets or strategies that can provide stability during volatile periods.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, suggests a broad range of possible returns. The median projection shows a 412.7% increase, while the worst-case scenario still indicates positive returns. However, it's important to remember that simulations are based on past data and assumptions, which may not perfectly predict future market conditions. To better prepare for uncertainty, regularly review and adjust the portfolio in response to changing economic conditions and personal financial goals.

Asset classes

  • Stocks
    100%
  • Other
    0%
  • Cash
    0%
  • Unknown
    0%
  • No data
    0%

The portfolio is overwhelmingly invested in stocks, accounting for nearly 100% of the allocation. This heavy focus on equities suggests a high-risk, high-reward strategy, common for growth-focused investors. However, this lack of asset class diversification may increase vulnerability to market volatility. To enhance stability and risk management, consider incorporating other asset classes, such as bonds or real estate, which can provide balance and potentially reduce overall portfolio risk.

Sectors

  • Technology
    39%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Health Care
    8%
  • Industrials
    7%
  • Financials
    7%
  • Consumer Staples
    7%
  • Utilities
    4%
  • Energy
    3%
  • Real Estate
    3%
  • Basic Materials
    1%
  • Unknown
    0%

Technology dominates the sector allocation at over 39%, reflecting a significant concentration risk. While tech stocks have driven recent market gains, they also tend to be more volatile, especially during periods of rising interest rates. Other sectors, such as healthcare and financial services, are underrepresented, which could limit diversification benefits. To mitigate sector risk, consider rebalancing towards a more evenly distributed sector allocation, ensuring better protection against sector-specific downturns.

Regions

  • North America
    97%
  • Europe Developed
    2%
  • Japan
    1%
  • Latin America
    0%
  • Asia Developed
    0%
  • Asia Emerging
    0%
  • Unknown
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

The portfolio is highly concentrated in North American assets, comprising over 97% of the geographic allocation. This focus on the US market may limit exposure to growth opportunities in other regions. While US markets have historically performed well, diversifying geographically can spread risk and capture growth in emerging markets. To enhance global diversification, consider increasing exposure to international equities, which may offer higher growth potential and help offset regional economic downturns.

Dividends

  • Fidelity® High Dividend ETF 2.90%
  • Invesco NASDAQ 100 ETF 0.40%
  • Fidelity® Government Money Market Fund 4.90%
  • Vanguard S&P 500 ETF 0.90%
  • Vanguard Total International Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.09%

The portfolio has a modest dividend yield of 1.09%, with the highest yield coming from the Fidelity High Dividend ETF at 2.9%. While dividends can provide a steady income stream, the current yield is relatively low for income-focused investors. For those seeking to enhance income, consider increasing allocations to higher-yielding assets or funds. However, balance is key; ensure that any changes align with overall growth objectives and risk tolerance.

Ongoing product costs

  • Fidelity® High Dividend ETF 0.15%
  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is 0.1%, which is impressively low and in line with best practices for cost efficiency. Lower costs mean more of your money stays invested, potentially boosting long-term returns. However, regularly review these costs to ensure they remain competitive. If any fees increase, consider exploring alternative low-cost options that offer similar exposure. Keeping costs in check is a crucial step in maximizing investment returns over time.

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.

Optimizing the portfolio using the Efficient Frontier could potentially enhance the risk-return ratio. This concept involves adjusting the current asset allocation to achieve the best possible balance between risk and return. While the portfolio is already heavily weighted towards high-growth assets, exploring different allocations could uncover opportunities for improved efficiency. It's important to note that this optimization focuses on the current assets and how changes in their allocation might impact performance, rather than adding new assets.

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