A high-risk growth portfolio with a focus on technology and U.S. market exposure

Report created on Dec 31, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of two ETFs: AGFiQ U.S. Market Neutral Anti-Beta Fund and ProShares UltraPro QQQ, with weightings of 60% and 40%, respectively. This structure leans heavily towards U.S. equities, particularly in the technology sector. Compared to common benchmarks, this composition is less diversified, focusing on high-growth assets which can lead to increased volatility. To enhance stability, consider incorporating a broader range of asset classes, such as bonds or international equities, to mitigate risks associated with market fluctuations.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 23.26%, indicating impressive growth over time. However, the maximum drawdown of -75.79% highlights significant volatility and potential for substantial losses during market downturns. This performance, while attractive, underscores the importance of understanding the risks involved. Comparing these figures to a benchmark like the S&P 500 could provide additional context. To manage volatility, consider strategies such as rebalancing or diversifying into less volatile sectors.

Projection Info

The Monte Carlo simulation, using 1,000 scenarios, projects a wide range of potential outcomes for the portfolio. While the median projection suggests a substantial gain of 1,056.84%, the 5th percentile indicates a potential loss of -40.74%. This highlights the uncertainty inherent in relying solely on historical data for future predictions. It's crucial to remember that these projections are based on past performance and market conditions, which may not repeat. Regularly reviewing and adjusting the portfolio can help align with evolving market dynamics and personal goals.

Asset classes Info

  • Cash
    73%
  • Stocks
    26%
  • Bonds
    1%
  • Other
    1%

The portfolio's asset allocation is heavily skewed towards cash (72.75%) and stocks (25.84%), with negligible exposure to bonds and other asset classes. This lack of diversification can lead to increased risk, particularly during periods of market stress. In comparison to diversified benchmarks, this allocation is atypically concentrated. To enhance diversification, consider increasing exposure to bonds and alternative investments, which can provide stability and income during market volatility.

Sectors Info

  • Technology
    32%
  • Consumer Discretionary
    14%
  • Industrials
    10%
  • Financials
    10%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Real Estate
    4%
  • Utilities
    3%
  • Energy
    3%
  • Basic Materials
    2%

The portfolio is notably concentrated in the technology sector, which comprises 31.57% of the holdings. This concentration can lead to high volatility, especially during periods of regulatory changes or interest rate hikes affecting tech stocks. While sector concentration can capitalize on growth trends, it also increases risk. Balancing the portfolio by adding exposure to underrepresented sectors like energy or basic materials could reduce volatility and enhance long-term stability.

Regions Info

  • North America
    98%
  • Europe Developed
    2%

With 97.61% of assets allocated to North America, the portfolio is heavily concentrated in the U.S. market. This geographic concentration limits exposure to international growth opportunities and increases vulnerability to regional economic downturns. In comparison, balanced benchmarks often include significant international exposure. To improve geographic diversification, consider adding assets from emerging markets or developed regions outside North America, which can provide growth potential and risk mitigation.

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's current asset allocation could benefit from optimization using the Efficient Frontier, which seeks the best possible risk-return ratio. By adjusting the weights of existing assets, the portfolio can potentially achieve a more favorable balance between risk and return. This optimization doesn't necessarily mean adding new assets but rather reallocating within the current holdings to improve efficiency and align with investment goals.

Dividends Info

  • ProShares UltraPro QQQ 1.20%
  • Weighted yield (per year) 0.48%

The portfolio's dividend yield is relatively low at 0.48%, reflecting its focus on growth rather than income generation. While dividends can provide a steady income stream, they are less relevant for growth-focused portfolios aiming for capital appreciation. However, incorporating some dividend-paying stocks or funds could add stability and reduce volatility. This approach can help balance the portfolio's risk-return profile, particularly during market downturns.

Ongoing product costs Info

  • AGFiQ U.S. Market Neutral Anti-Beta Fund 1.43%
  • ProShares UltraPro QQQ 0.88%
  • Weighted costs total (per year) 1.21%

The portfolio's total expense ratio (TER) is 1.21%, which is relatively high compared to industry averages. High costs can erode returns over time, especially in volatile markets. Lower-cost alternatives, such as index funds or ETFs with lower fees, could enhance long-term performance. Regularly reviewing and optimizing the portfolio's cost structure is crucial to maximizing returns while minimizing unnecessary expenses.

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