A growth-focused portfolio with strong U.S. equity exposure and significant technology weighting

Report created on Dec 6, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily invested in U.S. equities, particularly through ETFs like the Vanguard S&P 500 and Avantis U.S. Small Cap Value. It also includes a significant allocation to the technology sector via the Invesco QQQ Trust and VanEck Semiconductor ETF. The Vanguard Total International Stock Index Fund provides some international diversification. This composition suggests a growth-oriented strategy, leveraging well-established U.S. companies while also capturing potential gains from smaller, value-oriented stocks. Balancing large-cap stability with small-cap potential can enhance growth but may increase volatility. Consider reviewing the international allocation to ensure adequate global exposure.

Growth Info

Historically, the portfolio has demonstrated a robust compound annual growth rate (CAGR) of 19.41%, indicating strong past performance. However, it also experienced a maximum drawdown of -34.84%, highlighting vulnerability during market downturns. This performance suggests a high-risk, high-reward strategy that has paid off in the past. Keep in mind that past performance is not a guarantee of future results. It’s essential to assess whether you are comfortable with potential drawdowns and if this aligns with your long-term goals. Diversifying further could help mitigate some of the downside risks.

Projection Info

Using Monte Carlo simulations, the portfolio has a promising outlook with a median projected return of 1,184.04%. Monte Carlo simulations use historical data to project potential outcomes, but they have limitations as they assume past market conditions will repeat. With 993 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for future growth. However, it's crucial to remain cautious, as these projections do not account for unforeseeable market changes. Regularly reviewing and adjusting your portfolio based on current economic conditions can help maintain its growth trajectory.

Asset classes Info

  • Stocks
    100%

The portfolio is predominantly invested in stocks, accounting for nearly 100% of the allocation. This heavy reliance on equities aligns with a growth-focused strategy, aiming for capital appreciation. However, it also increases exposure to market volatility. While stocks have historically outperformed other asset classes over the long term, they can be unpredictable in the short term. Consider introducing other asset classes, such as bonds or real estate, to reduce volatility and provide a buffer during market downturns. Diversifying across asset classes can help achieve a more balanced risk-return profile.

Sectors Info

  • Technology
    34%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Telecommunications
    7%
  • Health Care
    7%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

With over 34% of the portfolio in technology, there's a notable sector concentration. While technology has been a major growth driver, this concentration can increase risk if the sector faces downturns. The portfolio also includes significant exposure to financial services and consumer cyclicals, providing some diversification. A broader sector allocation can help mitigate risks associated with sector-specific downturns. Consider evaluating the weightings in underrepresented sectors, such as healthcare or utilities, to ensure a more balanced approach. This can potentially stabilize returns during periods of sector volatility.

Regions Info

  • North America
    83%
  • Europe Developed
    7%
  • Asia Developed
    3%
  • Asia Emerging
    3%
  • Japan
    2%
  • Australasia
    1%
  • Latin America
    1%
  • Africa/Middle East
    1%

The portfolio is predominantly focused on North American markets, with 83.18% exposure, limiting its international diversification. While the U.S. market has been a strong performer, global diversification can help manage risks associated with regional economic downturns. The portfolio's limited exposure to Europe, Asia, and other regions suggests potential for increased diversification. Consider increasing allocations to emerging markets or other developed regions to capture growth opportunities and reduce reliance on North American markets. A more geographically balanced portfolio can enhance resilience against regional economic shifts.

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 can potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with the existing assets. By adjusting the allocation weights, you can enhance portfolio efficiency without necessarily adding new assets. This involves finding the right balance between risk and return, ensuring that each asset contributes optimally to the portfolio's overall performance. Regularly reviewing and rebalancing your portfolio in line with the Efficient Frontier can help maintain its efficiency and align with your risk tolerance and investment goals.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Invesco QQQ Trust 0.60%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.34%

The portfolio's dividend yield stands at 1.34%, with the Vanguard Total International Stock Index Fund contributing the highest yield at 2.9%. While dividends provide a steady income stream, this portfolio is primarily growth-focused, with lower emphasis on income generation. Dividends can offer a cushion during market volatility by providing regular income, even when capital gains are limited. If income is a priority, consider increasing allocations to higher-yielding assets or funds. Balancing growth and income can enhance overall portfolio returns and provide financial flexibility.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco QQQ Trust 0.20%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, with the VanEck Semiconductor ETF having the highest cost at 0.35%. Low costs are advantageous as they enhance net returns over time. Reducing costs can significantly impact long-term performance, especially in a growth-focused portfolio. Regularly review and compare expense ratios across similar funds to ensure cost-effectiveness. Consider shifting allocations to lower-cost alternatives if available, without compromising on diversification or growth potential. Keeping costs in check is a straightforward way to boost net returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

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