Momentum-focused portfolio with high exposure to financials and industrials sectors

Report created on Aug 11, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio predominantly invests in momentum strategies across various market capitalizations and regions, with a heavy allocation towards developed markets. The significant weight in the Invesco S&P International Developed Momentum ETF suggests a strategic tilt towards capturing growth in international developed markets. The inclusion of both the S&P 500® and MidCap Momentum ETFs indicates a balanced approach to harnessing momentum within the U.S. market, spanning large to mid-sized companies.

Growth Info

Historically, this portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 20.86%. While the maximum drawdown of -32.69% highlights periods of significant volatility, the overall performance suggests a strong upward trend. The days contributing to 90% of returns being concentrated in just 28 days underscores the portfolio's reliance on short, sharp gains, typical of momentum investing strategies.

Projection Info

The Monte Carlo simulation, based on 1,000 iterations, projects a wide range of potential outcomes, with a median increase of 1,933.3%. This analysis underscores the inherent uncertainty in predicting market movements, especially with momentum strategies that can be highly volatile. The annualized return of all simulations at 26.48% exceeds historical performance, suggesting optimism but also highlighting the limitations and speculative nature of such projections.

Asset classes Info

  • Stocks
    99%

The portfolio is heavily weighted towards stocks (99%), with negligible allocations to other asset classes. This concentration in equities is consistent with its growth profile and momentum strategy but comes with higher volatility and risk. The lack of diversification across asset classes may limit the portfolio's ability to mitigate risk through broader exposure.

Sectors Info

  • Financials
    37%
  • Industrials
    17%
  • Technology
    12%
  • Consumer Discretionary
    8%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Health Care
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

With financial services and industrials making up over half the sector allocation, the portfolio is positioned to benefit from growth and cyclical trends in these sectors. However, this concentration also exposes it to sector-specific risks. The relatively lower allocation to technology, despite its significant role in market momentum in recent years, could be a missed opportunity for diversification and growth.

Regions Info

  • North America
    51%
  • Europe Developed
    33%
  • Australasia
    6%
  • Japan
    5%
  • Asia Developed
    3%
  • Africa/Middle East
    1%

The geographic allocation underscores a strong emphasis on developed markets, with North America and Europe Developed constituting the bulk. This focus aligns with the portfolio's momentum strategy, targeting regions with more established financial markets. However, the limited exposure to emerging markets may restrict potential growth opportunities in high-growth regions.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    26%
  • Mid-cap
    16%
  • Small-cap
    9%

The distribution across market capitalizations, with a tilt towards mega and big-cap stocks, suggests a preference for stability and lower volatility associated with larger companies. However, this may also limit potential upside from smaller, more agile companies that can offer higher growth rates.

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 expected return is slightly below the optimal level suggested by the Efficient Frontier analysis. Adjusting the allocation could potentially increase the expected return to 27.03% without assuming additional risk. This indicates an opportunity to fine-tune the portfolio to achieve a more favorable risk-return balance.

Dividends Info

  • Invesco S&P International Developed Momentum ETF 2.00%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Invesco S&P MidCap Momentum ETF 0.70%
  • Weighted yield (per year) 1.46%

The overall dividend yield of 1.46% contributes to the portfolio's total return, albeit modestly. This yield reflects the growth-oriented nature of the portfolio, where the primary focus is on capital appreciation rather than income generation.

Ongoing product costs Info

  • Invesco S&P International Developed Momentum ETF 0.25%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.24%

With a total expense ratio (TER) of 0.24%, the portfolio benefits from relatively low costs, which is commendable given the active management typically associated with momentum strategies. Lower costs enhance net returns, an important consideration for long-term growth.

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