A growth-oriented portfolio with a strong tech focus and moderate international diversification

Report created on Jan 8, 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 consists of 60% Vanguard Total International Stock Index Fund ETF, 25% NVIDIA Corporation, and smaller allocations in Amazon, Alphabet, and Vanguard Total Stock Market ETF. The composition leans heavily towards international equities, with a significant single-stock exposure in NVIDIA. Compared to a typical growth portfolio, this allocation shows a strong emphasis on international diversification and technology. A balanced mix of ETFs and individual stocks provides a broad market exposure but also introduces concentration risk, especially with high single-stock allocations.

Growth Info

Historically, the portfolio has demonstrated a robust Compound Annual Growth Rate (CAGR) of 24.81%, suggesting strong growth potential. However, it also experienced a significant maximum drawdown of -62.73%, indicating vulnerability during market downturns. While past performance is not indicative of future results, this historical data highlights the portfolio's high-risk, high-reward nature. To mitigate potential losses, consider diversifying further into more stable asset classes or sectors that historically perform well during downturns.

Projection Info

Using Monte Carlo simulation, which projects potential outcomes based on historical data, the portfolio shows a wide range of possible future performances. With simulations indicating a 5th percentile return of 380.12% and a 67th percentile return of 5,366.63%, the portfolio's future is highly variable. This variability underscores the importance of understanding that past trends do not guarantee future outcomes. Consider regularly reviewing and adjusting the portfolio to align with your risk tolerance and investment goals as market conditions change.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising over 98% of its assets, with minimal allocations in cash and other asset classes. This concentration in equities aligns with a growth strategy but increases exposure to market volatility. Compared to a diversified benchmark, the lack of fixed income or alternative investments may limit downside protection. Introducing a small percentage of bonds or other asset classes could enhance stability and provide a buffer during market fluctuations.

Sectors Info

  • Technology
    34%
  • Financials
    13%
  • Consumer Discretionary
    12%
  • Industrials
    9%
  • Telecommunications
    9%
  • Health Care
    6%
  • Basic Materials
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Technology dominates the sector allocation at 34.42%, followed by financial services and consumer cyclicals. This tech-heavy focus aligns with the growth objective but may increase volatility, especially during interest rate changes or tech sector downturns. Compared to common benchmarks, this sector concentration is notable. To reduce risk, consider diversifying into underrepresented sectors such as healthcare or utilities, which can provide more stability during volatile market periods.

Regions Info

  • North America
    45%
  • Europe Developed
    23%
  • Asia Emerging
    10%
  • Japan
    9%
  • Asia Developed
    6%
  • Australasia
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographically, the portfolio is diversified with significant exposure to North America, Europe, and Asia. However, it is slightly underweight in emerging markets compared to global benchmarks. This geographic distribution provides a good mix of developed and emerging markets, potentially balancing growth opportunities with risk. Consider increasing exposure to regions like Latin America or Africa/Middle East to capture potential growth in these underrepresented areas and enhance diversification.

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 can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This optimization focuses solely on adjusting the mix of existing assets to improve efficiency. While the portfolio is already well-aligned with growth objectives, exploring slight reallocations could further enhance returns without significantly increasing risk. Regularly reassessing the allocation can ensure it remains aligned with changing market conditions and personal investment goals.

Dividends Info

  • Alphabet Inc Class C 0.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 2.06%

With a total dividend yield of 2.06%, the portfolio provides a modest income stream, primarily from the Vanguard Total International Stock Index Fund. For a growth-focused portfolio, dividends are a secondary consideration, but they can still contribute to overall returns. If income generation becomes a priority, consider reallocating a portion of assets to higher-yielding stocks or dividend-focused ETFs to enhance cash flow without sacrificing growth potential.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from impressively low costs, with a Total Expense Ratio (TER) of 0.05%, primarily due to the low-cost Vanguard ETFs. Keeping costs low is crucial for maximizing long-term returns, as high fees can significantly erode gains over time. This cost efficiency is a strong positive aspect of the portfolio. Continue to monitor fees and consider replacing any high-cost assets with similar low-cost alternatives to maintain this advantage.

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