High-growth portfolio with significant technology exposure and moderate diversification

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 high-risk tolerance and a focus on growth, aiming for substantial returns over a longer investment horizon. It is ideal for those willing to accept significant volatility and potential drawdowns in pursuit of high rewards. The heavy technology and equity exposure make it suitable for investors confident in the tech sector's long-term prospects. However, it's less suitable for those seeking steady income or lower-risk investments, given its concentrated and aggressive nature.

Positions

  • VanEck Semiconductor ETF
    SMH - US92189F6768
    50.00%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%

This portfolio is composed equally of two ETFs: VanEck Semiconductor ETF and Vanguard S&P 500 ETF, each making up 50% of the total. This structure leans heavily into equities, offering high growth potential but also increased volatility. Compared to a typical diversified portfolio, this one is more concentrated, particularly in the technology sector. While the S&P 500 provides some diversification across sectors, the semiconductor ETF skews the overall balance. Consider diversifying further by incorporating ETFs or funds that cover different asset classes or regions to mitigate risk and enhance stability.

Growth Info

Historically, the portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 20.75%. However, it also experienced a significant maximum drawdown of -39.01%, indicating high volatility. This performance aligns with the high-risk, high-reward profile typical of tech-heavy investments. While past performance is not indicative of future results, it highlights the portfolio's potential for substantial returns during favorable market conditions. To reduce volatility, consider adding more stable, lower-risk assets that could cushion against downturns.

Projection Info

Using Monte Carlo simulations, which model potential future outcomes based on historical data, the portfolio's annualized return is projected at 22.78%. While 997 out of 1,000 simulations showed positive returns, it's important to remember that these projections are not guarantees. The simulations provide a range of possible outcomes, with the 5th percentile return at 157% and the median at 1,182%. Given the high-risk nature of the portfolio, consider periodically reviewing asset allocation to ensure alignment with risk tolerance and investment goals.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is entirely composed of stocks, which can lead to significant growth but also increased risk. This lack of asset class diversification means the portfolio is highly sensitive to market fluctuations. In comparison, a more balanced portfolio might include bonds or real estate to provide stability and income. Adding different asset classes can help smooth out returns over time and reduce the impact of stock market volatility, enhancing overall portfolio resilience.

Sectors Info

  • Technology
    67%
  • Financials
    7%
  • Consumer Discretionary
    6%
  • Health Care
    5%
  • Telecommunications
    5%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

The portfolio is heavily concentrated in technology, accounting for 67% of the total allocation. This concentration aligns with trends favoring tech growth but also exposes the portfolio to sector-specific risks, such as regulatory changes or tech downturns. The remaining sectors are underrepresented, with financial services and consumer cyclicals making up only a small portion. To mitigate sector risk, consider diversifying into other sectors that may perform well in different economic conditions, such as utilities or healthcare.

Regions Info

  • North America
    90%
  • Asia Developed
    6%
  • Europe Developed
    4%

With 90% of assets in North America, the portfolio is heavily weighted towards the U.S. market. While this has been beneficial in recent years, it limits exposure to international growth opportunities. The remaining 10% is spread across developed Asia and Europe, offering minimal geographic diversification. To reduce reliance on the U.S. market and tap into global growth, consider increasing exposure to emerging markets or other international regions, which can provide additional diversification and potential returns.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    42%
  • Mid-cap
    11%
  • Small-cap
    1%

The portfolio's market capitalization is dominated by mega and big-cap stocks, comprising 89% of the allocation. This focus on large-cap companies provides stability and lower volatility compared to small-cap stocks, which only make up 1% of the portfolio. While large-cap stocks are generally more resilient, small and mid-cap stocks offer higher growth potential. To enhance growth prospects and diversification, consider increasing exposure to smaller companies, which can provide higher returns over the long term.

Dividends Info

  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.80%

The portfolio's dividend yield is relatively low at 0.80%, reflecting its focus on growth rather than income. While dividends can provide a steady income stream and reduce reliance on capital gains, the current yield aligns with the portfolio's growth-oriented strategy. For investors seeking more income, consider adding higher-yielding assets, such as dividend-focused ETFs or income-generating bonds. Balancing growth with income can help achieve a more stable return profile, especially during periods of market volatility.

Ongoing product costs Info

  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.19%

The portfolio's total expense ratio (TER) is 0.19%, which is quite competitive and supports better long-term performance by minimizing costs. The Vanguard S&P 500 ETF has a particularly low expense ratio of 0.03%, contributing to cost efficiency. Keeping costs low is crucial for maximizing net returns, especially over extended investment horizons. While the current costs are well-managed, continuously monitoring and evaluating expenses can help ensure they remain in check, preserving more of your investment gains.

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 benefit from optimization using the Efficient Frontier, which identifies the best risk-return trade-off. Currently, the portfolio is heavily weighted towards high-risk, high-reward assets, which may not be the most efficient allocation for all investors. By adjusting the balance between the existing assets or incorporating additional low-correlation assets, the portfolio's risk-adjusted returns could be improved. This optimization process aims to achieve the highest possible return for a given level of risk, enhancing overall portfolio efficiency.

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