A growth-focused portfolio with significant technology exposure and moderate geographic diversification

Report created on Dec 16, 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 evenly split between four ETFs, each comprising 25% of the total allocation. This structure provides a balance between different market segments, including technology, semiconductors, the S&P 500, and mid-cap quality stocks. Such a composition allows for targeted exposure to specific sectors while maintaining a broad market presence. It's essential to understand that while this setup offers growth potential, it may also introduce sector-specific risks. Consider monitoring sector performance regularly and be prepared to rebalance if necessary to maintain alignment with your investment goals.

Growth Info

Historically, this portfolio has demonstrated strong performance, with a compound annual growth rate (CAGR) of 19.75%. However, it also experienced a significant maximum drawdown of -35.55%, indicating vulnerability to market downturns. This highlights the importance of understanding both the potential rewards and risks associated with growth-focused portfolios. Historical performance can provide insights but isn't a guaranteed predictor of future results. Regularly reviewing performance and adjusting your strategy can help manage risks and capitalize on growth opportunities.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential portfolio values. With an annualized return of 21.82%, the 50th percentile projects a substantial growth of 1,112.1%. However, it's crucial to remember that projections are not certainties and can be influenced by market volatility. Understanding this variability can help set realistic expectations and prepare for different scenarios. Consider stress-testing your portfolio against various market conditions to better understand potential outcomes and refine your investment strategy.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.92% in equities and a negligible amount in cash. This allocation is typical for growth-oriented portfolios seeking higher returns. However, it also implies a higher risk, as equities are more susceptible to market fluctuations. Diversifying into other asset classes, such as bonds or real estate, could help mitigate risk and provide more stability during market downturns. Consider periodically reviewing your asset allocation to ensure it aligns with your risk tolerance and long-term financial objectives.

Sectors Info

  • Technology
    62%
  • Industrials
    11%
  • Financials
    6%
  • Consumer Discretionary
    6%
  • Health Care
    5%
  • Consumer Staples
    3%
  • Basic Materials
    3%
  • Telecommunications
    2%
  • Energy
    2%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio's sector allocation is highly concentrated in technology, accounting for over 62% of the total. While this can drive significant growth during tech booms, it also increases vulnerability to sector-specific downturns. The remaining sectors, such as industrials and financial services, offer some diversification but are less prominent. It's important to regularly assess sector performance and consider diversifying into underrepresented areas to reduce risk. Balancing exposure across multiple sectors can provide a more stable return profile and protect against sector-specific risks.

Regions Info

  • North America
    94%
  • Asia Developed
    3%
  • Europe Developed
    2%

Geographically, the portfolio is predominantly focused on North America, with 94.27% of assets allocated to the region. Limited exposure to international markets may restrict diversification benefits and expose the portfolio to regional economic fluctuations. Expanding geographic allocation to include more developed and emerging markets can enhance diversification and potentially uncover new growth opportunities. Consider assessing global market trends and economic conditions to determine if geographic diversification aligns with your investment strategy and risk tolerance.

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 potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio. This involves adjusting the allocation between the current assets to maximize returns for a given level of risk. While optimization can enhance portfolio efficiency, it doesn't guarantee diversification or alignment with specific investment goals. Regularly reviewing and adjusting the portfolio can help maintain its efficiency and ensure it continues to meet your risk tolerance and financial objectives. Consider consulting with a financial advisor to explore optimization strategies.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Invesco S&P MidCap Quality ETF 4.80%
  • Weighted yield (per year) 1.70%

The portfolio's dividend yield stands at 1.7%, with the Invesco S&P MidCap Quality ETF contributing the most at 4.8%. While dividends can provide a steady income stream, the overall yield is relatively modest due to the growth-focused nature of the portfolio. Investors seeking higher income may consider reallocating to higher-yielding assets. However, it's important to balance income needs with growth objectives, as higher dividends may come with different risk profiles. Regularly assess dividend contributions to ensure they align with your financial goals.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Invesco S&P MidCap Quality ETF 0.25%
  • Weighted costs total (per year) 0.18%

With a total expense ratio (TER) of 0.18%, the portfolio is cost-effective, minimizing the impact of fees on long-term returns. Low costs are crucial in maximizing investment gains, especially over extended periods. However, it's essential to remain vigilant about potential changes in fees or fund expenses. Continuously monitoring and comparing costs with similar investment options can help ensure you're getting the best value. Consider exploring cost-saving opportunities, such as switching to lower-cost funds, to enhance overall portfolio efficiency.

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