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Balanced Portfolio with High Tech Exposure and Moderate Diversification Ideal for Growth-Oriented Investors

Report created on Jul 20, 2024

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 composed of five ETFs, with a significant allocation to the SPDR® Portfolio S&P 500 ETF at 40%. The Franklin FTSE India ETF follows with a 30% allocation, emphasizing emerging markets exposure. The iShares Expanded Tech Sector ETF at 15% highlights a strong tech focus, while the Invesco S&P MidCap Momentum ETF at 10% adds a mid-cap dynamic. The iShares® Gold Trust Micro, making up 5%, offers a hedge through precious metals. This diversified approach balances growth potential with risk, suitable for those seeking moderate diversification across asset classes and sectors.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 13.12%, indicating strong performance over time. The max drawdown of -22.28% reflects the portfolio's vulnerability during market downturns, but it has generally recovered well. The concentration of returns in just 15 days suggests that timing and market conditions significantly impact performance. This historical insight underscores the importance of maintaining a long-term perspective and not reacting hastily to market volatility to achieve desired outcomes.

Projection Info

Using a Monte-Carlo simulation with 1,000 iterations, the portfolio's future performance was projected based on a hypothetical initial investment. The simulation predicts a median return of 455.94%, with a 5th percentile return of 74.32% and a 67th percentile return of 679.94%. With 991 simulations yielding positive returns, the annualized return across simulations is 14.91%. This analysis highlights the potential for significant long-term gains but also underscores the inherent uncertainties in the market, emphasizing the importance of diversification and risk management.

Asset classes Info

  • Stocks
    94%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising 94.48% of the total allocation. This high exposure to equities suggests a focus on capital appreciation and growth. There is minimal allocation to cash, indicating a strategy that prioritizes investment over liquidity. The presence of gold, albeit small, provides a hedge against market volatility and inflation. This asset class distribution aligns with a balanced risk profile, suitable for investors seeking growth while maintaining a degree of safety through diversification.

Sectors Info

  • Technology
    30%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    8%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    1%

Technology dominates the sector allocation with 29.63%, reflecting a strong emphasis on innovation and growth potential. Financial services and consumer cyclicals also hold significant portions, indicating a diversified approach across various economic sectors. The inclusion of healthcare, energy, and basic materials further enhances this diversity. However, the portfolio's heavy tech weighting may increase susceptibility to sector-specific risks. Balancing sector allocations could help mitigate these risks and provide more stable returns across different market conditions.

Regions Info

  • North America
    55%
  • Asia Emerging
    30%

Geographically, the portfolio is primarily concentrated in North America, accounting for 54.68% of the allocation. The significant exposure to Asia Emerging, specifically through the Franklin FTSE India ETF, at 30% adds valuable diversification and growth potential from emerging markets. Minimal exposure to Europe Developed and Asia Developed regions suggests a potential area for further diversification. Expanding geographic exposure could help reduce region-specific risks and capitalize on global growth opportunities, aligning with a balanced investment strategy.

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.

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The portfolio can be optimized by adjusting along the efficient frontier to either increase risk for potentially higher returns or decrease risk for more stability. Investors can achieve a riskier portfolio by increasing exposure to equities or growth-oriented sectors. Conversely, a more conservative approach could involve allocating a portion to bonds or other low-correlation assets. Before optimization, it's essential to ensure alignment with personal risk tolerance and financial goals, as well as to maintain cost-effectiveness and diversification.

Dividends Info

  • Franklin FTSE India ETF 1.50%
  • iShares Expanded Tech Sector ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.20%
  • Invesco S&P MidCap Momentum ETF 0.30%
  • Weighted yield (per year) 1.02%

The portfolio's dividend yield stands at 1.02%, with contributions from the Franklin FTSE India ETF, iShares Expanded Tech Sector ETF, and SPDR® Portfolio S&P 500 ETF. This yield reflects a modest income stream, primarily driven by equity holdings. While dividends provide a cushion against market volatility, the portfolio's focus on growth suggests that income generation is not the primary objective. Investors seeking higher income may consider reallocating towards higher-yielding assets or increasing exposure to dividend-focused funds.

Ongoing product costs Info

  • Franklin FTSE India ETF 0.19%
  • iShares® Gold Trust Micro 0.09%
  • iShares Expanded Tech Sector ETF 0.41%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.16%

The portfolio's total expense ratio (TER) is 0.16%, indicating a cost-effective approach to investing. The SPDR® Portfolio S&P 500 ETF offers the lowest cost at 0.02%, while the iShares Expanded Tech Sector ETF is the most expensive at 0.41%. Maintaining low costs is crucial for maximizing net returns over time. Regularly reviewing and comparing expense ratios across similar funds can help ensure that the portfolio remains cost-efficient, allowing more of the returns to contribute to overall growth.

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