A growth-focused portfolio with a strong tech influence and high North American exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a growth-oriented mindset and a moderate to high risk tolerance. Such investors are typically focused on long-term capital appreciation rather than income generation. They are willing to accept higher volatility in exchange for the potential of significant returns. This investor likely has a longer investment horizon, allowing them to ride out market fluctuations and capitalize on growth opportunities. They may also have a keen interest in technology and infrastructure sectors, aligning with the portfolio's current composition.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    40.00%
  • Global X U.S. Infrastructure Development ETF
    PAVE - US37954Y6730
    20.00%
  • VanEck Semiconductor ETF
    SMH - US92189F6768
    20.00%
  • Vanguard Information Technology Index Fund ETF Shares
    VGT - US92204A7028
    20.00%

This portfolio is heavily weighted towards ETFs, with 40% in a Vanguard S&P 500 ETF, 20% in Global X U.S. Infrastructure Development ETF, 20% in VanEck Semiconductor ETF, and 20% in Vanguard Information Technology Index Fund ETF Shares. This composition indicates a preference for index tracking and sector-specific investments, primarily in technology and infrastructure. Compared to a typical growth portfolio, this allocation is quite concentrated in specific sectors, which could lead to higher volatility but also the potential for significant returns. To enhance diversification, consider adding assets from different sectors or asset classes.

Growth Info

Historically, this portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 20.77%. However, it also experienced a significant maximum drawdown of -34.16%, indicating potential vulnerability during market downturns. When compared to a broad market index, this performance suggests a higher risk-return trade-off. While past performance is not a guarantee of future results, it highlights the portfolio's potential for high returns and high volatility. Investors should assess their risk tolerance and consider diversifying to mitigate potential losses during downturns.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential outcomes, shows an annualized return of 25.09% across 1,000 simulations. The 5th percentile outcome is a 203% return, while the 67th percentile projects a 2,280% return. This wide range of outcomes underscores the uncertainty inherent in forward projections. While promising, these figures are not guaranteed and should be viewed as part of a broader risk management strategy. Regularly reviewing and adjusting the portfolio in response to market changes is advisable to align with personal investment goals.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is entirely composed of stocks, which can lead to significant growth but also increases exposure to market volatility. This lack of diversification across asset classes may limit the portfolio's ability to withstand market fluctuations. Typically, including other asset classes like bonds or real estate can provide a cushion during downturns. To enhance stability, consider incorporating a mix of asset classes that align with your risk tolerance and investment horizon, potentially reducing overall portfolio risk.

Sectors Info

  • Technology
    54%
  • Industrials
    18%
  • Financials
    5%
  • Consumer Discretionary
    4%
  • Health Care
    4%
  • Basic Materials
    4%
  • Telecommunications
    4%
  • Consumer Staples
    2%
  • Utilities
    2%
  • Energy
    1%
  • Real Estate
    1%

With 54% of the portfolio in technology and 18% in industrials, there is a notable concentration in these sectors. This sectoral allocation may lead to higher volatility, especially during market shifts affecting these industries. While technology has been a strong performer, it's also susceptible to rapid changes. A more balanced sector distribution could mitigate risks associated with sector-specific downturns. Consider diversifying into sectors less represented in the portfolio, such as healthcare or consumer staples, to achieve a more balanced risk-return profile.

Regions Info

  • North America
    95%
  • Asia Developed
    3%
  • Europe Developed
    2%
  • Latin America
    0%
  • Africa/Middle East
    0%

Geographically, the portfolio is heavily concentrated in North America, with 95% exposure, leaving minimal allocation to other regions. This concentration might expose the portfolio to regional economic risks and limit potential growth opportunities in emerging markets. A more geographically diversified portfolio could reduce regional risk and tap into growth areas outside North America. Consider gradually increasing exposure to international markets to enhance global diversification and potentially improve long-term returns.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    33%
  • Mid-cap
    20%
  • Small-cap
    7%
  • Micro-cap
    2%

The portfolio's market capitalization distribution is skewed towards larger companies, with 38% in mega-cap and 33% in big-cap stocks. This allocation provides stability but may limit growth potential compared to mid or small-cap stocks, which can offer higher returns albeit with increased risk. A more balanced approach across market capitalizations could enhance growth opportunities. Consider reallocating a portion of the portfolio to smaller-cap stocks to capture potential upside and diversify risk across different company sizes.

Dividends Info

  • Global X U.S. Infrastructure Development ETF 0.50%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.78%

With a total dividend yield of 0.78%, this portfolio's income generation is modest, reflecting its growth-oriented focus. Dividends can provide a steady income stream and help cushion against market volatility. For investors seeking income, consider adding high-dividend-yielding stocks or funds to the portfolio. However, if the primary goal is growth, maintaining the current focus on capital appreciation may be appropriate. Regularly reassessing income needs and adjusting the portfolio accordingly can ensure alignment with financial goals.

Ongoing product costs Info

  • Global X U.S. Infrastructure Development ETF 0.47%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.20%

The portfolio's Total Expense Ratio (TER) is 0.20%, which is relatively low and beneficial for long-term performance. Lower costs mean more of your investment return is retained, enhancing compounding over time. This cost efficiency aligns well with best practices for maintaining a growth-oriented portfolio. While the current TER is commendable, periodically reviewing and comparing costs with similar funds can ensure continued cost-effectiveness. Staying vigilant about fees will help maximize net returns and support the portfolio's growth objectives.

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.

The portfolio could potentially be optimized using the Efficient Frontier, a concept that helps maximize returns for a given level of risk by adjusting asset weights. Currently, the portfolio's concentration in specific sectors and asset classes suggests room for improvement. By reallocating assets to achieve a more efficient risk-return balance, you can potentially enhance returns without significantly increasing risk. Consider consulting with a financial advisor to explore optimization strategies that align with your investment goals and risk tolerance.

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