A balanced portfolio with a strong focus on U.S. equities and technology

Report created on Mar 9, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards U.S. equities, with a significant 60% allocation to the Vanguard S&P 500 ETF and 22% to the Invesco NASDAQ 100 ETF. This composition emphasizes large-cap stocks, reflecting a common benchmark approach. Such a structure is typical for investors seeking exposure to established companies with growth potential. However, the 10% allocation to the Vanguard Total International Stock Index Fund ETF and 8% to the Invesco S&P MidCap Momentum ETF provide some diversification. While this mix offers potential for growth, it may benefit from increased exposure to other asset classes to enhance diversification.

Growth Info

Historically, the portfolio has performed well, achieving a CAGR of 13.71%. This impressive growth rate indicates strong past performance, especially when compared to traditional benchmarks. A hypothetical initial investment of $10,000 would have grown significantly over the years. However, the maximum drawdown of -26.56% highlights the potential volatility. While past performance is encouraging, it doesn't guarantee future results. Investors should remain aware of market fluctuations and consider strategies to mitigate potential downturns.

Projection Info

The Monte Carlo analysis offers a forward-looking perspective, simulating 1,000 potential outcomes based on historical data. The results show a 50th percentile end value of 410.9%, indicating a promising outlook. However, the 5th percentile at 50.9% underscores the inherent uncertainty and risk. While the simulations provide valuable insights, they rely on historical trends and assumptions. Investors should use these projections as one of several tools in decision-making, understanding that actual future performance may vary.

Asset classes Info

  • Stocks
    100%

This portfolio is entirely composed of stocks, with no allocation to cash or other asset classes. While this can drive growth, it also increases exposure to market volatility. Diversification across different asset classes, such as bonds or real estate, can reduce risk by spreading investments across various types of assets. Comparing this allocation to benchmarks reveals a more concentrated approach, which may be suitable for those with higher risk tolerance. However, incorporating other asset classes could enhance stability.

Sectors Info

  • Technology
    34%
  • Consumer Discretionary
    13%
  • Financials
    12%
  • Telecommunications
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is notably tech-heavy, with 34% allocated to technology, followed by consumer cyclicals and financial services. This concentration can lead to higher volatility, especially during interest rate changes or tech sector downturns. While the sector composition aligns with current growth trends, it may lack balance. Diversifying into sectors like healthcare or energy could provide stability and reduce reliance on technology. Investors should consider sector trends and potential impacts on their portfolio.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

With 90% of the portfolio invested in North America, there's a significant home bias. While this aligns with U.S. market strength, it limits exposure to international opportunities. The remaining 10% spread across Europe, Asia, and Japan offers minimal diversification. Comparing this to global benchmarks reveals an underweight in emerging markets. Expanding geographic exposure could mitigate regional risks and capture growth in diverse markets. Investors should assess their comfort with this concentration and consider global diversification.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    32%
  • Mid-cap
    19%
  • Small-cap
    4%

The portfolio is dominated by large-cap stocks, with 44% in mega caps and 32% in big caps. This focus on well-established companies offers stability but may limit growth potential compared to smaller companies. Medium and small-cap stocks, which make up 23% of the portfolio, can provide higher growth opportunities but also come with increased risk. Balancing market capitalization exposure can enhance diversification and optimize risk-return potential. Investors should consider their risk tolerance and growth objectives.

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, which seeks the best risk-return ratio based on current assets. This approach helps identify the most efficient allocation of existing investments, potentially enhancing returns without increasing risk. It's important to note that optimization doesn't guarantee diversification or meet other goals. Investors should focus on aligning their portfolio with personal objectives and risk tolerance, while considering periodic reviews to adjust allocations and maintain efficiency.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Invesco S&P MidCap Momentum ETF 0.40%
  • Weighted yield (per year) 1.25%

With a total dividend yield of 1.25%, the portfolio offers modest income potential. The Vanguard S&P 500 ETF contributes the highest yield at 1.30%, while the Invesco NASDAQ 100 ETF offers 0.60%. Dividends can provide a steady income stream, particularly appealing to income-focused investors. However, the portfolio's growth orientation means dividends play a secondary role. Investors seeking higher income may consider increasing allocation to high-yield stocks or dividend-focused funds to balance growth and income.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is impressively low at 0.09%, supporting better long-term performance. Low costs are crucial for maximizing returns, as they reduce the drag on portfolio growth. The Vanguard S&P 500 ETF's expense ratio of 0.03% is particularly advantageous. While the Invesco S&P MidCap Momentum ETF has a higher cost at 0.34%, the overall portfolio remains cost-efficient. Maintaining low costs is a positive alignment with best practices, ensuring more of your investment works for you.

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