Growth-oriented portfolio with heavy tech and US market focus and moderate 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 growth-oriented profile, comfortable with higher risk for the potential of higher returns. The focus on large-cap tech stocks and the significant allocation to the US market indicate a preference for established, high-growth companies. Such an investor likely has a long-term investment horizon, allowing them to weather the volatility associated with the tech sector and the equity market. Moderate diversification suggests a balanced approach to risk, though the investor should be prepared for significant market fluctuations.

Positions

  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    30.00%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    26.00%
  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    13.00%
  • Alphabet Inc Class A
    GOOGL - US02079K3059
    11.00%
  • Amazon.com Inc
    AMZN - US0231351067
    10.00%
  • ASML Holding NV
    ASMLF - NL0010273215
    5.00%
  • S&P Global Inc
    SPGI - US78409V1044
    5.00%

This portfolio is characterized by a strong concentration in technology stocks and ETFs, with a significant portion allocated to the Invesco NASDAQ 100 ETF, Vanguard S&P 500 ETF, and individual tech giants like Alphabet Inc and Amazon.com Inc. Such a composition suggests a growth-oriented strategy, heavily reliant on the performance of large-cap tech companies. While this approach has historically offered substantial returns, it also exposes the portfolio to sector-specific risks, notably the volatility associated with tech stocks.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 15.27%, which is impressive. The maximum drawdown of -33.29% indicates a period of significant loss, likely reflecting the high volatility of the tech sector. The days contributing to 90% of the returns being so few suggest that the portfolio's performance is heavily reliant on specific, high-growth periods, underscoring the importance of timing in this investment strategy.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median annualized return of 17.04%. This suggests potential for high returns but comes with considerable uncertainty. The simulations, by using historical data, attempt to forecast future performance but cannot account for unforeseen market shifts. Therefore, while these projections are useful for setting expectations, they should not be the sole basis for investment decisions.

Asset classes Info

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

The portfolio is entirely composed of stocks, with no allocation to cash, bonds, or other asset classes. This lack of diversification across asset classes increases the portfolio's risk profile, as it is fully exposed to the volatility of the equity markets. A more diversified asset allocation could help mitigate this risk, especially during downturns in the stock market.

Sectors Info

  • Technology
    31%
  • Telecommunications
    19%
  • Consumer Discretionary
    18%
  • Financials
    11%
  • Health Care
    6%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    1%
  • Real Estate
    1%

The sectoral allocation emphasizes technology, communication services, and consumer cyclicals, which are sectors known for their growth potential but also for their volatility. This concentration enhances the portfolio's growth prospects but also increases its susceptibility to sector-specific downturns. Diversifying into more stable sectors or increasing the allocation to defensive sectors could provide a buffer during market corrections.

Regions Info

  • North America
    90%
  • Europe Developed
    7%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    0%
  • Latin America
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

With 90% of assets allocated to North America, primarily the US, the portfolio's geographic exposure is heavily skewed. While the US market is a significant driver of global equity performance, this concentration increases exposure to country-specific risks. Expanding into more developed European markets or emerging markets could offer growth opportunities and reduce the portfolio's vulnerability to US-centric economic cycles.

Market capitalization Info

  • Mega-cap
    60%
  • Large-cap
    28%
  • Mid-cap
    11%
  • Small-cap
    1%
  • Micro-cap
    0%

The focus on mega and big-cap stocks aligns with the portfolio's growth and risk profile, as these companies typically offer stability and solid growth potential. However, the limited exposure to medium, small, and micro-cap stocks restricts opportunities to benefit from the higher growth potential of smaller companies. Including a broader range of market caps could enhance returns and diversification.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard Total World Stock Index Fund ETF Shares and the Vanguard S&P 500 ETF indicates overlapping exposures, which may limit diversification benefits. Reducing redundant holdings and reallocating to non-correlated assets could enhance the portfolio's risk-adjusted returns by spreading risk more effectively across different investments.

Dividends Info

  • ASML Holding NV 0.90%
  • Alphabet Inc Class A 0.50%
  • Invesco NASDAQ 100 ETF 0.60%
  • S&P Global Inc 0.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 0.89%

The portfolio's overall dividend yield of 0.89% contributes to its total return, providing a source of income in addition to capital appreciation. While the focus on growth stocks often comes at the expense of higher dividend yields, the current yield suggests a balanced approach, integrating income generation with growth potential.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.06%

With a total expense ratio (TER) of 0.06%, the portfolio is efficiently managed cost-wise, supporting better long-term performance. Keeping costs low is crucial for maximizing returns, especially in growth-oriented portfolios where the compound effect of high fees can significantly erode gains 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 involves addressing the high correlation between certain assets to improve diversification. By reallocating funds from overlapping ETFs into assets with lower correlations, the portfolio could achieve a more efficient risk-return profile. This adjustment would align the portfolio closer to the Efficient Frontier, where each unit of risk taken is optimized for maximum return.

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