A concentrated portfolio with a strong emphasis on US equities and technology sectors

Report created on Dec 21, 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 heavily concentrated, with over 91% in the Vanguard S&P 500 Index ETF and the remainder in the Invesco NASDAQ 100 Index ETF. This composition indicates a strong focus on large-cap US equities. While such a concentration can lead to significant returns during market upswings, it also exposes the portfolio to higher risk during downturns. Diversifying across different asset classes and regions could help manage risk and smooth returns over time.

Growth Info

Historically, the portfolio has delivered impressive returns, with a Compound Annual Growth Rate (CAGR) of 17.02%. However, it also experienced a maximum drawdown of -23.03%, highlighting periods of significant loss. While the strong historical performance is encouraging, it's important to remember that past performance doesn't guarantee future results. Comparing these results to relevant benchmarks can provide additional context on the portfolio's performance relative to the broader market.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a wide range of potential returns. The median outcome projects a 1,043.43% increase, while the worst-case scenario still shows positive growth. Although these projections are based on past data and assumptions, they provide useful insights into potential future performance. It's crucial to remember that these simulations are hypothetical and not a guarantee of future results.

Asset classes Info

  • US Equity
    99%

With 99.3% of the portfolio allocated to US equities, there is a significant lack of diversification across asset classes. This heavy weighting can lead to increased volatility and risk, especially during periods of market stress. Diversifying into other asset classes, such as bonds or international equities, can help balance the portfolio and reduce overall risk. A more diversified asset mix typically aligns more closely with balanced portfolio benchmarks.

Sectors Info

  • Technology
    35%
  • Financials
    12%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio is notably concentrated in the technology sector, which comprises 34.5% of the total allocation. While technology has been a strong performer, this concentration can lead to heightened volatility, especially during economic shifts or regulatory changes. Balancing sector allocations by increasing exposure to other areas like healthcare or consumer staples could enhance stability and align more closely with broader market benchmarks.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographically, the portfolio is overwhelmingly focused on North America, with 99.2% exposure. This limited geographic diversification means the portfolio is heavily influenced by the US and Canadian markets. Expanding into other regions, such as Europe or emerging markets, could provide additional growth opportunities and reduce risk. A more balanced geographic allocation would align better with global diversification standards.

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 could benefit from optimization using the Efficient Frontier approach, which seeks to maximize returns for a given level of risk. By adjusting the allocation between the existing assets, the portfolio could potentially achieve a more favorable risk-return balance. This process doesn't necessarily involve adding new assets but rather reallocating existing ones for better efficiency.

Dividends Info

  • Invesco NASDAQ 100 Index ETF CAD Units 0.40%
  • Vanguard S&P 500 Index ETF 0.70%
  • Weighted yield (per year) 0.68%

The portfolio's dividend yield is relatively modest at 0.68%, reflecting its focus on growth-oriented equities. While dividends can provide a steady income stream, the low yield suggests that the portfolio is more geared towards capital appreciation than income generation. Investors seeking higher income might consider adding dividend-focused assets to increase cash flow while maintaining 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