A balanced portfolio with strong technology focus and moderate geographic diversification

Report created on Dec 6, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists predominantly of ETFs, making up about 73% of its total allocation. Common stocks, like Apple Inc and Home Depot Inc, represent nearly 27%. The portfolio leans heavily towards equities, with minimal bond exposure at just under 18%. This composition suggests a focus on growth with a touch of income stability. A higher equity allocation can offer potential for higher returns, but also increases risk. To balance growth and risk, consider adding more bonds or other fixed-income assets to stabilize returns during market downturns.

Growth Info

Historically, the portfolio has delivered a commendable compound annual growth rate (CAGR) of 12.17%. However, it has also experienced a maximum drawdown of -23.89%, indicating significant volatility. This performance suggests that while the portfolio has the potential for substantial returns, it also carries the risk of considerable losses. Investors should be aware that past performance does not guarantee future results. To mitigate risk, consider diversifying further or incorporating strategies like dollar-cost averaging to manage market volatility.

Projection Info

Using Monte Carlo simulations, which analyze a range of potential outcomes based on historical data, the portfolio's future performance has been projected. Results indicate a 50th percentile return of 215.02%, with a 67th percentile reaching 397.65%. However, the 5th percentile shows a potential loss of -53.48%. These projections highlight the uncertainty and variability in future returns. Investors should use these simulations as a guide rather than a prediction, ensuring that their risk tolerance aligns with potential outcomes.

Asset classes Info

  • Stocks
    82%
  • Bonds
    18%

The portfolio is heavily weighted towards stocks, comprising over 82% of the allocation. Bonds make up nearly 18%, with negligible amounts in cash and other assets. This allocation may offer strong growth potential but can also lead to increased volatility. Diversifying into more asset classes could reduce risk and enhance stability. Consider incorporating alternative investments or increasing cash reserves to provide liquidity and hedge against market fluctuations.

Sectors Info

  • Technology
    29%
  • Consumer Discretionary
    12%
  • Telecommunications
    8%
  • Financials
    7%
  • Health Care
    7%
  • Consumer Staples
    7%
  • Industrials
    6%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

With a significant 28.81% allocation in technology, this portfolio is heavily concentrated in this sector. Other notable sectors include consumer cyclicals and communication services. While technology has been a strong performer, over-reliance on one sector can increase risk. To achieve better sectoral balance, consider increasing exposure to underrepresented sectors like healthcare or industrials. This can help mitigate risks associated with sector-specific downturns and enhance overall portfolio resilience.

Regions Info

  • North America
    73%
  • Asia Emerging
    4%
  • Europe Developed
    3%
  • Japan
    1%

The portfolio's geographic exposure is predominantly centered in North America, accounting for over 73%. Other regions like Asia Emerging and Europe Developed have minimal representation. This concentration in North America may limit diversification benefits and expose the portfolio to regional economic risks. To enhance geographic diversification, consider increasing exposure to international markets. Investing in regions with different economic cycles can help reduce volatility and improve risk-adjusted returns.

Redundant positions Info

  • Vanguard FTSE Developed Markets Index Fund ETF Shares
    Vanguard International Dividend Appreciation Index Fund ETF Shares
    High correlation

Some assets in the portfolio, such as Vanguard FTSE Developed Markets Index Fund ETF Shares and Vanguard International Dividend Appreciation Index Fund ETF Shares, are highly correlated. High correlation means these assets tend to move in tandem, reducing diversification benefits. Identifying and minimizing overlapping assets can enhance portfolio efficiency. Consider replacing highly correlated assets with those that have lower correlation to improve risk management and achieve better 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.

Optimizing this portfolio using the Efficient Frontier involves adjusting current asset allocations to achieve the best possible risk-return ratio. By focusing on existing assets, optimization can help identify the ideal mix for maximizing returns at a given risk level. Before proceeding, address any high correlations to ensure true diversification. This process can lead to a more efficient portfolio, aligning with the investor's risk tolerance and return objectives.

Dividends Info

  • Apple Inc 0.40%
  • Global X Artificial Intelligence & Technology ETF 0.20%
  • Walt Disney Company 0.60%
  • iShares ESG Aware MSCI USA Small-Cap ETF 1.00%
  • Alphabet Inc Class A 0.20%
  • Home Depot Inc 1.60%
  • KraneShares Electric Vehicles and Future Mobility Index 1.00%
  • Meta Platforms Inc. 0.20%
  • Microsoft Corporation 0.50%
  • Pfizer Inc 6.50%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 2.50%
  • Target Corporation 2.60%
  • Taiwan Semiconductor Manufacturing 1.10%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 3.00%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.30%
  • Vanguard International Dividend Appreciation Index Fund ETF Shares 2.00%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.81%

The portfolio's overall dividend yield stands at 1.81%, with notable contributions from Schwab U.S. Dividend Equity ETF and Vanguard Intermediate-Term Treasury Index Fund ETF Shares. Dividends provide a steady income stream, offering a buffer against market volatility. Investors seeking income stability may consider increasing allocations to higher-yielding assets. However, it's important to balance yield with growth potential, as high dividends can sometimes indicate slower growth prospects.

Ongoing product costs Info

  • Global X Artificial Intelligence & Technology ETF 0.68%
  • iShares ESG Aware MSCI USA Small-Cap ETF 0.17%
  • KraneShares Electric Vehicles and Future Mobility Index 0.72%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard International Dividend Appreciation Index Fund ETF Shares 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is relatively low at 0.06%, with individual costs ranging from 0.03% to 0.72%. Lower costs can significantly enhance long-term returns by minimizing the drag on performance. To further reduce costs, consider shifting allocations towards lower-cost ETFs or funds. Regularly reviewing and optimizing expense ratios can lead to substantial savings over time, improving net returns without sacrificing diversification or risk management.

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