A growth-focused portfolio with strong US exposure and broad diversification across sectors

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, moderate to high risk tolerance, and a long-term investment horizon. It focuses on capital appreciation through significant exposure to US equities and a diversified range of sectors. Ideal for individuals looking to grow their wealth over time, this portfolio may appeal to those who are comfortable with market volatility and seek to capitalize on potential high returns. Regular monitoring and adjustments are essential to maintaining alignment with personal financial goals.

Positions

  • iShares Core S&P 500 ETF
    IVV - US4642872000
    44.00%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares
    VEA - US9219438580
    22.00%
  • iShares MSCI USA Quality Factor ETF
    QUAL - US46432F3394
    8.00%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    8.00%
  • Vanguard Small-Cap Index Fund ETF Shares
    VB - US9229087518
    7.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    6.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares
    VWO - US9220428588
    5.00%

The portfolio is heavily weighted towards US equities, with a significant 44% allocation in the iShares Core S&P 500 ETF. This concentration in a single ETF suggests a strong focus on large-cap US stocks, which is typical for growth-oriented portfolios. The inclusion of other ETFs like the Vanguard FTSE Developed Markets Index Fund and Vanguard Small-Cap Index Fund indicates a broad diversification strategy. Compared to common benchmark compositions, this portfolio is well-aligned with a growth profile, though it could benefit from increased exposure to other asset classes, such as bonds, to enhance risk management.

Growth Info

Historically, the portfolio has performed impressively, with a Compound Annual Growth Rate (CAGR) of 15.64%. This rate suggests robust growth, particularly when compared to typical market benchmarks. However, it's important to note the maximum drawdown of -33.94%, indicating significant volatility during market downturns. While past performance is not a guarantee of future results, understanding historical trends can help set realistic expectations. To mitigate potential losses in the future, consider rebalancing the portfolio periodically to maintain target allocations and manage risk effectively.

Projection Info

Forward projections using Monte Carlo simulations indicate a wide range of potential outcomes, with a median growth of 590.09%. These simulations use historical data to model future performance, but they are not predictive. The 5th percentile outcome of 76.31% highlights the uncertainties inherent in investing. While these projections can guide expectations, they should be supplemented with a thorough understanding of current market conditions. Regularly review and adjust the portfolio to align with changing market dynamics and personal financial goals.

Asset classes

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's allocation is overwhelmingly in stocks, at 99.35%, which aligns with a high-risk, high-reward growth strategy. This lack of diversity in asset classes may expose the portfolio to significant volatility. Common benchmarks often include a mix of stocks and bonds to balance risk and reward. To improve diversification, consider incorporating other asset classes, such as fixed income or real estate, which can provide stability and reduce overall portfolio risk, especially during market downturns.

Sectors

  • Technology
    27%
  • Financials
    16%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation shows a strong emphasis on technology, at 26.67%, which is higher than typical benchmarks. This focus aligns with growth objectives but may increase volatility, especially in times of economic uncertainty or interest rate hikes. Other sectors like financial services and consumer cyclicals also have substantial representation, providing some balance. To mitigate sector-specific risks, consider diversifying further into underrepresented sectors like utilities or energy, which can offer stability and potential growth in different economic cycles.

Regions

  • North America
    75%
  • Europe Developed
    12%
  • Japan
    5%
  • Asia Emerging
    3%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

The portfolio has a pronounced geographic concentration in North America, at 74.94%, which aligns with its focus on US equities. While this offers familiarity and stability, it limits exposure to international growth opportunities. Compared to common benchmarks, which often have more balanced geographic allocations, this portfolio could benefit from increased exposure to emerging markets or other regions. Diversifying geographically can enhance potential returns and reduce risk associated with regional economic downturns.

Redundant positions

  • iShares Core S&P 500 ETF
    Schwab U.S. Large-Cap Growth ETF
    iShares MSCI USA Quality Factor ETF
    High correlation

The portfolio contains highly correlated assets, particularly within US large-cap ETFs like the iShares Core S&P 500 and Schwab U.S. Large-Cap Growth ETF. High correlation means these assets tend to move together, which can limit diversification benefits. During market downturns, this can increase risk as correlated assets may decline simultaneously. To enhance diversification, consider reducing exposure to overlapping assets and incorporating investments with lower correlation, such as international equities or alternative asset classes.

Dividends

  • iShares Core S&P 500 ETF 0.90%
  • iShares MSCI USA Quality Factor ETF 0.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.30%
  • Vanguard Small-Cap Index Fund ETF Shares 0.90%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.80%
  • Weighted yield (per year) 1.01%

With a total dividend yield of 1.01%, the portfolio's income generation is modest, reflecting its growth orientation. Dividends can provide a steady income stream and help cushion against market volatility. For investors seeking more income, consider increasing allocations to higher-yielding ETFs or stocks. However, remember that higher dividends may come with increased risk or lower growth potential. Balancing growth and income is crucial to achieving long-term financial goals.

Ongoing product costs

  • iShares Core S&P 500 ETF 0.03%
  • iShares MSCI USA Quality Factor ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, which is advantageous for long-term growth. Lower costs mean more of your money is working for you, compounding over time. This cost efficiency aligns well with best practices and supports better net returns. While the current cost structure is excellent, periodically review the TERs of individual ETFs and consider replacing any that significantly increase in fees with more cost-effective alternatives to maintain this advantage.

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 can be optimized for risk versus return using the Efficient Frontier, which identifies the best possible risk-return ratio. However, current high correlations between some assets could limit this optimization. By addressing these overlaps and adjusting allocations among existing assets, you can potentially enhance efficiency. Remember, optimization doesn't necessarily mean adding new assets but rather reallocating within the current portfolio to achieve a more favorable risk-return balance.

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