A growth-focused portfolio with strong US equity exposure and moderate risk
Report created on Jan 2, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VI VANGUARD GROWTH INDEX FUND ADMIRAL SHARES
VIGAX - US9229086601 51.40% -
IW iShares Russell 1000 Value ETF
IWD - US4642875987 17.56% -
FD Fidelity® High Dividend ETF
FDVV - US3160928400 17.00% -
VO Vanguard Mid-Cap Value Index Fund ETF Shares
VOE - US9229085124 8.77% -
VT Vanguard Value Index Fund ETF Shares
VTV - US9229087443 4.59% -
RQ Cohen & Steers Quality Income Realty Fund Inc
RQI - US19247L1061 0.68%
The portfolio is heavily weighted towards growth and value funds, with a significant 51.4% allocation to the Vanguard Growth Index Fund. It also includes a mix of ETFs, with notable allocations to the iShares Russell 1000 Value ETF and the Fidelity High Dividend ETF. This composition leans towards a growth strategy, emphasizing large-cap US equities. Compared to common benchmark compositions, this portfolio shows a strong preference for growth with limited diversification across other asset types. To enhance diversification, consider incorporating other asset classes like bonds or international equities, which can help balance risk and provide a more stable return profile.
Growth
The portfolio has demonstrated a strong historical performance with a Compound Annual Growth Rate (CAGR) of 15.55%. This indicates impressive growth over time, surpassing many common benchmarks. However, it also experienced a maximum drawdown of -35.14%, highlighting its susceptibility to market volatility. While past performance is not indicative of future results, it provides valuable insights into how the portfolio has navigated different market conditions. To mitigate potential drawdowns, consider diversifying into less volatile asset classes or adjusting allocations to include more defensive sectors.
Projection
Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with an annualized return of 13.97%. The simulation uses historical data to predict future performance, but it's important to note that these are hypothetical scenarios. The 5th percentile indicates a 26.07% return, while the 67th percentile suggests a 592.42% return. This variability underscores the inherent uncertainty in market predictions. To prepare for potential outcomes, regularly review and adjust the portfolio to align with your risk tolerance and investment goals, considering both best-case and worst-case scenarios.
Asset classes
- Stocks 100%
The portfolio is heavily concentrated in stocks, with a 99.66% allocation, reflecting a strong focus on equity markets. This high concentration can lead to substantial growth but also increases exposure to market volatility. Compared to typical diversified portfolios, which might include bonds or alternative investments, this portfolio is less balanced. To achieve a more diversified asset allocation, consider integrating other asset classes like bonds, real estate, or commodities, which can provide stability and reduce overall portfolio risk during market downturns.
Sectors
- Technology 33%
- Financials 11%
- Industrials 9%
- Telecommunications 8%
- Health Care 8%
- Consumer Discretionary 8%
- Consumer Staples 6%
- Real Estate 5%
- Utilities 4%
- Energy 4%
- Consumer Discretionary 3%
- Basic Materials 2%
The sector allocation is heavily skewed towards technology, which comprises 33.28% of the portfolio. This concentration can lead to higher returns in a booming tech market but also exposes the portfolio to sector-specific risks, especially during interest rate hikes or regulatory changes. Other sectors like financial services and industrials have moderate representation. To enhance sector diversification and mitigate risk, consider increasing exposure to underrepresented sectors such as healthcare or consumer staples, which can provide stability in volatile markets.
Regions
- North America 98%
- Europe Developed 1%
The portfolio is predominantly invested in North American assets, with 98.20% exposure, indicating a significant home-country bias. This concentration limits geographic diversification and may miss out on growth opportunities in emerging markets or other developed regions. Compared to global benchmarks, this portfolio has minimal international exposure. To diversify geographically, consider increasing allocations to international markets, which can offer growth potential and help hedge against regional economic downturns.
Redundant positions
-
High correlationVanguard Mid-Cap Value Index Fund ETF SharesVanguard Value Index Fund ETF SharesFidelity® High Dividend ETFiShares Russell 1000 Value ETF
Several assets in the portfolio, such as the Vanguard Mid-Cap Value Index Fund and the iShares Russell 1000 Value ETF, are highly correlated. This means they tend to move in the same direction, which can limit the benefits of diversification. During market downturns, highly correlated assets may not provide the desired risk mitigation. To improve diversification, consider replacing or complementing these assets with less correlated ones, which can help reduce overall portfolio risk and enhance stability during volatile periods.
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 helps achieve the best possible risk-return ratio. Currently, the portfolio includes overlapping, highly correlated assets that may not contribute to diversification. By reallocating these assets, the portfolio can potentially improve its efficiency. This process involves adjusting current allocations to maximize returns for a given level of risk, ensuring that the portfolio is well-positioned to meet investment goals while maintaining an appropriate risk profile.
Dividends
- Fidelity® High Dividend ETF 2.90%
- iShares Russell 1000 Value ETF 1.30%
- Cohen & Steers Quality Income Realty Fund Inc 7.80%
- VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.30%
- Vanguard Mid-Cap Value Index Fund ETF Shares 1.50%
- Vanguard Value Index Fund ETF Shares 1.70%
- Weighted yield (per year) 1.14%
The portfolio's total dividend yield is 1.14%, with the Cohen & Steers Quality Income Realty Fund contributing the highest yield at 7.8%. Dividends can provide a steady income stream, which is particularly beneficial for income-focused investors. However, given the portfolio's growth orientation, dividends play a secondary role. To increase income potential, consider reallocating some assets towards higher-yielding investments, such as dividend-focused ETFs or funds, which can enhance cash flow without compromising growth objectives.
Ongoing product costs
- Fidelity® High Dividend ETF 0.15%
- iShares Russell 1000 Value ETF 0.19%
- Cohen & Steers Quality Income Realty Fund Inc 2.21%
- VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.05%
- Vanguard Mid-Cap Value Index Fund ETF Shares 0.07%
- Vanguard Value Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.11%
The portfolio's total expense ratio (TER) is relatively low at 0.11%, with Vanguard funds contributing to this efficiency. Low costs are crucial as they enhance net returns over time, aligning with best practices for long-term investing. However, the Cohen & Steers Quality Income Realty Fund has a high expense ratio of 2.21%, which could erode returns. To optimize costs further, evaluate whether lower-cost alternatives can replace higher-fee assets, ensuring that the portfolio remains cost-effective and supports better long-term performance.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
Compare your holdings
How much do the funds you hold actually overlap with the ones people weigh them against?
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