A growth-focused portfolio with strong tech exposure and limited international diversification

Report created on Dec 28, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with a 99.8% allocation in stocks. This composition suggests a focus on capital appreciation, common in growth-oriented portfolios. Compared to a typical balanced portfolio, which might include bonds or other asset classes, this portfolio is more aggressive. While this can lead to higher returns, it also increases risk. Consider diversifying by incorporating other asset classes such as fixed income or real estate to balance risk and return.

Growth Info

Historically, the portfolio has shown impressive growth with a CAGR of 19.45%. This indicates strong past performance, likely driven by the tech-heavy allocation. However, the max drawdown of -35.91% highlights the portfolio's vulnerability during market downturns. While past performance is not indicative of future results, it provides insight into potential volatility. To mitigate risk, consider strategies like dollar-cost averaging or adding defensive assets.

Projection Info

Using Monte Carlo simulations, the portfolio's potential future outcomes were analyzed. These simulations use historical data to project a range of possible returns, with the median scenario suggesting significant growth. However, it's important to note that these projections are not guarantees. The simulations show a wide range of outcomes, emphasizing the need for risk management. Regularly reviewing and adjusting the portfolio based on changing market conditions can help align with investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is heavily skewed towards equities, with minimal cash and other asset holdings. This lack of diversification across asset classes can lead to increased volatility. By comparison, a more balanced portfolio might include bonds or alternative investments to reduce risk. Consider diversifying into other asset classes to enhance stability and reduce the impact of market fluctuations.

Sectors Info

  • Technology
    43%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    8%
  • Industrials
    7%
  • Telecommunications
    6%
  • Energy
    4%
  • Consumer Staples
    4%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation is tech-heavy, with 43.3% in technology, which can lead to higher volatility, especially during periods of rising interest rates. The financial services and consumer cyclicals sectors also have notable allocations. While this concentration can drive growth in favorable conditions, it may also increase risk. To improve diversification, consider reallocating some assets to underrepresented sectors like utilities or real estate.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio is predominantly invested in North America, with 98.7% exposure, limiting geographic diversification. This concentration may increase vulnerability to regional economic downturns. Compared to global benchmarks, this is a significant underexposure to international markets. Consider adding international equities to enhance diversification and potentially capture growth in other regions.

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 be optimized to achieve a better risk-return balance using the Efficient Frontier. This concept helps identify the best possible return for a given level of risk. By adjusting the current asset allocation, the portfolio's expected return could increase to 24.94%. Keep in mind that optimization is based on historical data and assumptions, and may not guarantee future results.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.01%

The portfolio's dividend yield is relatively low at 1.01%, reflecting its growth focus. Dividends can provide a steady income stream and reduce reliance on capital appreciation. While growth stocks typically offer lower dividends, consider the role of dividends in your investment strategy. If income is a priority, increasing exposure to dividend-paying stocks or funds could enhance cash flow.

Ongoing product costs Info

  • ARK Innovation ETF 0.75%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.16%

The portfolio's total expense ratio (TER) is 0.16%, which is quite low and beneficial for long-term performance. Lower costs mean more of your returns stay in your pocket. The ARK Innovation ETF has the highest cost at 0.75%, which could impact net returns. Consider whether lower-cost alternatives could achieve similar objectives without compromising performance.

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