A growth-focused portfolio with strong U.S. equity exposure and moderate risk

Report created on Dec 30, 2024

Risk profile Info

5/7
Growth
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 nearly half invested in the iShares Core S&P 500 ETF. This large allocation aligns with a growth profile, emphasizing blue-chip stocks. The Schwab U.S. Dividend Equity ETF adds a focus on dividend-paying stocks. While this composition supports growth, it may lack diversification compared to benchmarks that include more global exposure or alternative assets. To enhance diversification, consider reallocating a portion to international or non-equity assets.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 16.4%. This indicates strong growth, likely driven by the significant U.S. market exposure. The maximum drawdown of -33.56% highlights potential risks during market downturns. Compared to benchmarks, this performance suggests a high-risk, high-reward strategy. To mitigate drawdowns, consider adding more defensive or less correlated assets.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, shows an annualized return of 17.14%. However, past performance does not guarantee future results. The simulation suggests a wide range of potential outcomes, with a 5th percentile return of 92.28% and a 67th percentile return of 906.48%. This indicates potential for significant growth, but also highlights the inherent uncertainty. Regularly reviewing and adjusting the portfolio can help manage this risk.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely composed of stocks, with minimal cash or other asset classes. This concentration in equities can lead to higher volatility, especially during market downturns. Compared to a more balanced benchmark, this single asset class focus might not provide sufficient risk mitigation. Consider introducing bonds or other alternative assets to enhance diversification and reduce volatility.

Sectors Info

  • Technology
    24%
  • Financials
    16%
  • Consumer Discretionary
    12%
  • Health Care
    11%
  • Industrials
    10%
  • Consumer Staples
    8%
  • Telecommunications
    8%
  • Energy
    6%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is diversified across several sectors, with a notable concentration in technology, financial services, and consumer cyclicals. This sectoral allocation is typical for growth-focused portfolios but can lead to increased volatility, particularly if these sectors face headwinds. Compared to benchmarks, the sector balance is relatively aligned, but keeping an eye on sector trends is crucial. Adjusting sector weights can help manage risk and capitalize on emerging opportunities.

Regions Info

  • North America
    91%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, with limited exposure to other regions. This concentration can increase vulnerability to region-specific risks, such as economic downturns or policy changes. Compared to global benchmarks, this geographic allocation is less diversified. Expanding exposure to international markets, particularly emerging economies, can enhance diversification and capture growth opportunities.

Redundant positions Info

  • Vanguard Russell 1000 Growth Index Fund ETF Shares
    iShares MSCI USA Quality Factor ETF
    iShares Core S&P 500 ETF
    High correlation

The presence of highly correlated assets, like the Vanguard Russell 1000 Growth Index Fund ETF Shares and the iShares Core S&P 500 ETF, limits diversification benefits. Highly correlated assets tend to move together, which can exacerbate losses during market downturns. To improve diversification, consider reducing allocations to overlapping assets and introducing less correlated investments.

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 balance based on current assets. By adjusting allocations, the portfolio can potentially achieve a more efficient risk-return ratio. This process doesn't guarantee diversification but can improve overall performance. Regularly reviewing and optimizing the portfolio can help maintain alignment with investment goals.

Dividends Info

  • iShares Core S&P 500 ETF 0.90%
  • iShares MSCI USA Quality Factor ETF 1.00%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Invesco S&P 500® Momentum ETF 0.30%
  • Vanguard Small-Cap Index Fund ETF Shares 1.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.90%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.40%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.83%

The portfolio's dividend yield is 1.83%, with the Schwab U.S. Dividend Equity ETF contributing significantly. Dividends can provide a steady income stream and cushion against volatility. For growth-focused investors, maintaining some dividend-paying assets can enhance total returns while providing stability. Consider balancing growth and income by adjusting allocations between high-growth and high-dividend assets.

Ongoing product costs Info

  • iShares Core S&P 500 ETF 0.03%
  • iShares MSCI USA Quality Factor ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, which supports long-term performance by minimizing costs. This cost efficiency aligns well with best practices, allowing more of the portfolio's returns to be retained. Continuously monitoring and optimizing costs by evaluating alternatives with lower fees can further enhance returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey