A growth-focused portfolio with significant exposure to U.S. and Indian equities

Report created on Feb 25, 2025

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.

Positions

The portfolio is composed entirely of ETFs, with a notable 90% allocation to large and small-cap U.S. equities and a 30% allocation to Indian equities. This structure is typical for a growth-focused portfolio, aiming to capture high potential returns. However, the lack of fixed income or alternative assets may increase volatility. To enhance diversification, consider adding asset classes such as bonds or real estate. This could help mitigate risk during market downturns and provide more stable returns over time.

Growth Info

Historically, the portfolio has achieved a strong CAGR of 16.85%, outperforming many benchmarks. However, it experienced a significant maximum drawdown of -36.32%, indicating high volatility. This performance is indicative of a growth-focused strategy, which often sees larger fluctuations. While past performance is not indicative of future results, the high returns suggest the portfolio has effectively captured growth opportunities. Consider maintaining a long-term perspective to endure potential volatility, as short-term fluctuations might be substantial.

Projection Info

The Monte Carlo simulation, using historical data, projects a wide range of potential outcomes, with a median growth of 639.1% over the investment horizon. The simulation indicates a high probability of positive returns, with 987 out of 1,000 simulations showing gains. However, it's important to recognize that these projections are based on past data and cannot guarantee future results. Regularly reviewing and adjusting the portfolio in response to market changes can help maintain alignment with your investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio's 100% allocation to stocks reflects a high-risk, high-reward strategy. While this can lead to substantial growth, it also exposes the portfolio to significant market volatility. Diversification across asset classes is crucial for balancing risk and return. Consider integrating fixed-income securities or alternative investments to cushion against stock market downturns. Such diversification can help stabilize returns and provide income during periods of market stress.

Sectors Info

  • Technology
    29%
  • Financials
    17%
  • Consumer Discretionary
    12%
  • Telecommunications
    8%
  • Health Care
    8%
  • Industrials
    8%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio is heavily weighted towards technology, with a 29% allocation, followed by financial services and consumer cyclicals. This concentration can lead to higher volatility, especially during periods of sector-specific downturns or economic shifts. Balancing sector exposure by incorporating more defensive sectors like healthcare or utilities could reduce risk. This adjustment can help mitigate the impact of sector-specific downturns and provide more stable returns over time.

Regions Info

  • North America
    70%
  • Asien Schwellenländer
    30%

With 70% of the portfolio in North American equities and 30% in emerging Asia, the geographic diversification is limited. This exposure may leave the portfolio vulnerable to regional economic downturns. Including more developed markets like Europe or diversifying into other emerging markets can enhance geographic diversification. This broader exposure can help reduce risk associated with regional economic fluctuations and provide access to different growth opportunities.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    28%
  • Mid-cap
    10%
  • Small-cap
    6%
  • Micro-cap
    5%

The portfolio is predominantly composed of mega-cap and large-cap stocks, which typically offer stability and dividend income. However, the 16% allocation to small and micro-cap stocks introduces higher growth potential and volatility. Balancing market capitalization exposure can optimize risk and return. Consider slightly increasing exposure to small and mid-cap stocks for growth, while maintaining a core of large-cap stocks for stability. This approach can capture growth opportunities while managing risk.

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 aims to achieve the best possible risk-return ratio. Currently, the portfolio's asset allocation may not be fully optimized for risk-adjusted returns. By adjusting the weightings of existing assets, you can potentially enhance the portfolio's efficiency. This process involves balancing risk and return to ensure the portfolio aligns with your investment goals, maximizing returns for a given level of risk.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Franklin FTSE India ETF 1.00%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.98%

The portfolio's dividend yield of 0.98% is relatively low, reflecting its growth focus. While dividends can provide a steady income stream, growth portfolios often prioritize capital appreciation over income. Investors seeking higher income might consider adding higher-yielding assets or dividend-focused ETFs. This can boost the portfolio's income potential, providing a cushion during volatile markets and contributing to total returns over time.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Franklin FTSE India ETF 0.19%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is a low 0.10%, which is favorable for long-term growth. Low costs help enhance net returns by reducing the drag on performance. This efficiency aligns well with a growth strategy, allowing more of the portfolio's gains to compound over time. Continue monitoring expense ratios and consider replacing high-cost funds with lower-cost alternatives if available. This practice can further improve the portfolio's cost efficiency and long-term performance.

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