A balanced US-focused portfolio with a strong emphasis on technology and financial sectors

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with 100% of its assets in stocks. It includes two ETFs and two individual stocks, with a significant focus on the Vanguard Total Stock Market Index Fund ETF Shares and the Invesco NASDAQ 100 ETF. This structure provides broad market exposure but limits diversification to equities, lacking bonds or alternative assets. A more diversified asset mix could enhance stability and reduce risk in volatile markets. Consider incorporating other asset classes like fixed income or real estate to balance the portfolio's risk and return potential.

Growth Info

Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 12.86%, indicating robust growth over time. However, it also experienced a maximum drawdown of -27.83%, suggesting significant volatility during market downturns. Compared to benchmarks, the performance aligns well with typical equity-heavy portfolios. While past performance can guide expectations, it's not a guarantee of future results. Regularly reviewing performance against goals and risk tolerance can help maintain alignment with investment objectives.

Projection Info

Using Monte Carlo simulations, which project potential outcomes based on historical data, the portfolio shows promising future prospects. With a median projected return of 672.4%, the simulations suggest strong growth potential. However, the 5th percentile indicates a low-end potential return of 101.1%, highlighting the inherent uncertainty in projections. While useful, these simulations rely on past data and assumptions, so they should be one of several tools used for future planning. Consider stress-testing the portfolio under different economic scenarios to better understand potential risks.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive allocation to stocks limits its diversification across asset classes. This concentration can lead to increased risk during equity market downturns. Diversifying into other asset classes, such as bonds or commodities, could help mitigate this risk by providing a buffer during periods of stock market volatility. A more balanced allocation aligned with benchmark norms could enhance overall portfolio stability and risk-adjusted returns.

Sectors Info

  • Technology
    31%
  • Financials
    27%
  • Consumer Discretionary
    9%
  • Telecommunications
    9%
  • Health Care
    7%
  • Industrials
    5%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

The portfolio is notably concentrated in the technology and financial services sectors, which together comprise 58% of the total allocation. While this focus can drive growth, it also exposes the portfolio to sector-specific risks, such as regulatory changes or economic shifts affecting these industries. To mitigate sector concentration risk, consider diversifying into underrepresented sectors like healthcare or consumer staples, which may offer more stability during economic downturns.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

With 99% of the portfolio's assets allocated to North America, geographic diversification is limited. This concentration increases exposure to region-specific risks, such as economic downturns or policy changes in the U.S. Expanding geographic exposure to include more international markets, particularly emerging economies, could enhance diversification and potentially improve risk-adjusted returns. A more balanced geographic allocation aligned with global benchmarks would reduce reliance on the North American market.

Market capitalization Info

  • Mega-cap
    56%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio predominantly consists of large-cap stocks, with 56% in mega and 26% in big market capitalization companies. This skew towards larger companies provides stability and liquidity but may limit exposure to the growth potential of smaller firms. Introducing more mid and small-cap stocks could increase diversification and offer opportunities for higher returns, albeit with increased volatility. Balancing market capitalization exposure can optimize the portfolio's growth and stability.

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 be optimized using the Efficient Frontier concept, which seeks the best possible risk-return ratio. Currently, a more efficient portfolio with the same risk level could potentially yield a higher expected return of 20.62%. This involves reallocating existing assets to achieve a better balance between risk and return, without necessarily increasing diversification. Regularly reassessing the allocation and adjusting based on market conditions can help maintain optimal efficiency.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Weighted yield (per year) 1.13%

The portfolio's dividend yield stands at 1.13%, with contributions primarily from JPMorgan Chase & Co and the Vanguard Total Stock Market Index Fund ETF Shares. While dividends provide a steady income stream, the yield is relatively modest. For investors seeking income, increasing exposure to higher-yielding assets or dividend-focused funds could enhance cash flow. However, balancing dividend income with growth potential is crucial to maintaining a well-rounded portfolio.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is a low 0.06%, primarily driven by the cost-effective Vanguard Total Stock Market Index Fund ETF Shares. Low costs are advantageous as they preserve more of the portfolio's returns over time. Keeping costs minimal should remain a priority, but it's also important to ensure that cost-saving measures do not compromise diversification or growth potential. Regularly reviewing and optimizing costs can contribute to better long-term performance.

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