A growth-focused portfolio with heavy tech exposure and moderate geographic diversification

Report created on Mar 6, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists of three ETFs and one individual stock, with a balanced allocation of 30% each to VanEck Video Gaming and eSports ETF, Global X Millennials Consumer ETF, and Vanguard Growth Index Fund ETF Shares. Palantir Technologies Inc. makes up 10% of the portfolio. This composition leans heavily towards growth-oriented investments, focusing on sectors like technology and consumer trends. Compared to a benchmark growth portfolio, this allocation shows a strong tilt towards thematic ETFs, which can offer high growth potential but also introduce sector-specific risks. Consider reviewing the thematic concentration to ensure alignment with your risk tolerance and growth objectives.

Growth Info

Historically, the portfolio has delivered a robust CAGR of 20.15%, indicating strong growth over time. However, it has also experienced a significant max drawdown of -48.37%, highlighting its volatility. For context, a benchmark growth portfolio might have a lower drawdown, suggesting a trade-off between high returns and risk. This portfolio's performance is driven by its tech-heavy allocation, which has been favorable in recent years. Investors should be prepared for potential fluctuations and consider strategies to mitigate downside risk, such as diversifying across more sectors or adding defensive assets.

Projection Info

The Monte Carlo simulation, a tool that uses historical data to forecast potential future outcomes, suggests a wide range of possible returns. With 1,000 simulations, the portfolio's projected annualized return is 35.04%, with the 50th percentile showing a 2,174.9% growth. However, it's crucial to remember that these projections are not guarantees, as they rely on past data which may not predict future market conditions. The optimistic projections indicate the portfolio's growth potential, but investors should remain cautious and consider diversifying to manage risks associated with high volatility.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no allocation to other asset classes like bonds or cash. While this can maximize growth potential, it also increases exposure to market volatility. A benchmark diversified portfolio typically includes a mix of asset classes to balance risk and return. Investors may benefit from incorporating assets that can provide stability during market downturns, such as bonds or real estate, to enhance diversification and potentially improve risk-adjusted returns over the long term.

Sectors Info

  • Technology
    35%
  • Telecommunications
    30%
  • Consumer Discretionary
    22%
  • Financials
    3%
  • Real Estate
    3%
  • Consumer Staples
    3%
  • Health Care
    2%
  • Industrials
    1%

The portfolio is heavily concentrated in technology (35%) and communication services (30%), with consumer cyclicals also significant at 22%. This sectoral focus aligns with growth trends but may result in higher volatility, especially when interest rates rise or sector-specific challenges occur. Compared to a typical growth portfolio, which might have a more balanced sector allocation, this portfolio's concentration could impact performance during sector downturns. Consider diversifying into sectors like healthcare or industrials to reduce sector-specific risks and enhance long-term stability.

Regions Info

  • North America
    79%
  • Japan
    9%
  • Asia Emerging
    5%
  • Asia Developed
    4%
  • Australasia
    1%
  • Europe Emerging
    1%
  • Europe Developed
    1%

Geographically, the portfolio is primarily focused on North America, with 79% exposure, followed by Japan and various Asian markets. This heavy North American tilt aligns well with recent market performance but may limit global diversification benefits. Compared to a global benchmark, the portfolio's limited exposure to Europe and emerging markets could miss opportunities for growth and risk mitigation. Consider increasing geographic diversification to include more regions, particularly emerging markets, which can offer growth potential and reduce reliance on North American market conditions.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    32%
  • Mid-cap
    18%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization is skewed towards mega-cap (43%) and big-cap (32%) stocks, with moderate exposure to medium (18%), small (4%), and micro-cap (1%) stocks. This distribution aligns with a growth strategy, focusing on large, established companies with proven growth records. However, smaller companies can offer higher growth potential and diversification benefits. Compared to a benchmark growth portfolio, which might have a more balanced market cap distribution, consider increasing exposure to small and mid-cap stocks to capture potential growth opportunities and enhance 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.

The portfolio could benefit from optimization using the Efficient Frontier, a concept that identifies the best possible risk-return trade-off for a given set of assets. Currently, the portfolio's asset allocation may not be fully optimized for the highest possible return at a given risk level. By adjusting the weightings of existing assets, investors can potentially achieve a more efficient portfolio. This process involves finding the ideal balance of risk and return, ensuring that the portfolio is aligned with your investment objectives and risk tolerance.

Dividends Info

  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 0.15%

The portfolio's overall dividend yield is low at 0.15%, reflecting its growth-oriented nature. The Vanguard Growth Index Fund ETF Shares contributes a modest yield of 0.50%. While dividends are not a primary focus for growth investors, they can provide a steady income stream and enhance total returns. Compared to a balanced portfolio, which might have a higher yield, consider whether the current dividend income aligns with your investment goals. If income is a priority, explore options to increase yield without sacrificing growth potential.

Ongoing product costs Info

  • VanEck Video Gaming and eSports ETF 0.56%
  • Global X Millennials Consumer ETF 0.50%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.33%

The total expense ratio (TER) of the portfolio stands at 0.33%, which is relatively low, aiding long-term performance. The Vanguard Growth Index Fund ETF Shares contributes significantly to this low cost with a TER of 0.04%. Compared to a benchmark portfolio, which might have a higher TER, this cost efficiency is advantageous for compounding returns over time. However, always remain vigilant for any changes in fund fees and consider cost-effective alternatives if necessary. Regularly reviewing and optimizing costs can help maximize returns and support long-term investment goals.

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