A growth-focused investment portfolio with a strong tilt towards technology and real estate
Report created on May 5, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
BO Global X Robotics & Artificial Intelligence ETF
BOTZ - US37954Y7159 34.47% -
SW Schwab S&P 500 Index Fund
SWPPX - US8085098551 26.74% -
MS MASSMUTUAL SELECT SMALL CAP GROWTH EQUITY FUND CLASS R5
MSGSX - US57629R3416 23.46% -
VN Vanguard Real Estate Index Fund ETF Shares
VNQ - US9229085538 15.33%
This portfolio exhibits a concentrated focus on growth sectors, with significant allocations to the Global X Robotics & Artificial Intelligence ETF and the Schwab S&P 500 Index Fund, alongside a notable investment in small-cap growth equities and real estate. The diversification is moderate, leaning heavily towards stocks with a smaller, yet significant, commitment to real estate. This composition suggests a strategy aiming for high growth potential, leveraging the technological and industrial sectors' dynamism, balanced with the stability of large-cap indices and the income-generating real estate assets.
Growth
Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.32%, with a maximum drawdown of -42.15%. These figures indicate a relatively strong performance with a capacity for significant volatility. The performance is reflective of the growth-oriented strategy, which typically involves higher risk and volatility in exchange for the potential of higher returns. The days contributing most to returns highlight the portfolio's sensitivity to market movements, underscoring the importance of timing and market conditions in achieving positive outcomes.
Projection
Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a wide dispersion of returns for this portfolio, with a median increase of 181.7%. However, the projection also indicates potential for substantial declines, highlighting the inherent risks of a growth-focused strategy. While these simulations provide valuable insights, it's crucial to remember that they are based on past data and assumptions, and actual future performance can vary widely due to unforeseen market changes.
Asset classes
- Stocks 84%
- Real Estate 15%
- Cash 1%
The portfolio's allocation shows a heavy emphasis on stocks (84%) and real estate (15%), with a minimal cash reserve. This asset class distribution supports the portfolio's growth orientation but may increase volatility and risk. Comparing this allocation to standard benchmarks for growth portfolios, the heavy stock concentration is typical, though the specific emphasis on real estate is slightly less common. This unique mix could offer diversification benefits but also necessitates careful monitoring due to real estate market fluctuations.
Sectors
- Technology 28%
- Industrials 21%
- Real Estate 17%
- Health Care 12%
- Financials 7%
- Consumer Discretionary 5%
- Telecommunications 3%
- Consumer Staples 3%
- Energy 2%
- Utilities 1%
- Basic Materials 1%
The sectoral allocation underscores a strong preference for technology and industrials, alongside a significant investment in real estate and healthcare. This sector mix aligns with the portfolio's growth objectives, leveraging sectors known for innovation and potential high returns. However, the concentration in technology and industrials may expose the portfolio to sector-specific risks, such as regulatory changes or economic downturns affecting these industries more severely than others.
Regions
- North America 81%
- Japan 11%
- Europe Developed 5%
- Asia Emerging 2%
- Asia Developed 1%
Geographically, the portfolio is heavily weighted towards North America (81%), with smaller exposures to Japan, Europe, and emerging markets in Asia. This distribution suggests a focus on established markets with a lower allocation to potentially higher-growth but riskier emerging markets. While this may reduce exposure to geopolitical and currency risks associated with emerging markets, it could also limit the portfolio's potential for capturing global growth opportunities.
Market capitalization
- Small-cap 29%
- Large-cap 22%
- Mega-cap 22%
- Mid-cap 20%
- Micro-cap 5%
The market capitalization breakdown reveals a balanced exposure across small, medium, big, and mega-cap companies, with a slight tilt towards smaller companies. This diversification can potentially offer a blend of stability from larger companies and growth opportunities from smaller firms. However, the significant allocation to small caps may increase the portfolio's overall risk and volatility, given these companies' typically higher sensitivity to market changes.
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.
Considering the Efficient Frontier analysis, the portfolio could potentially achieve a higher expected return of 14.78% at the same risk level. This suggests room for optimization, possibly through adjusting asset allocation or diversifying further across sectors and geographies. Achieving efficiency means balancing risk and return more effectively, which could involve reallocating investments to areas with lower correlation or adjusting the portfolio's market cap focus.
Dividends
- Global X Robotics & Artificial Intelligence ETF 0.10%
- MASSMUTUAL SELECT SMALL CAP GROWTH EQUITY FUND CLASS R5 5.70%
- Schwab S&P 500 Index Fund 1.30%
- Vanguard Real Estate Index Fund ETF Shares 4.00%
- Weighted yield (per year) 2.33%
Dividend yields across the portfolio components contribute to its total yield of 2.33%, with the highest yield coming from the real estate and small-cap growth equity funds. This income stream can provide a cushion during market downturns and contribute to total returns over time. However, the focus on growth-oriented investments typically results in lower overall yield, aligning with the portfolio's primary goal of capital appreciation rather than income generation.
Ongoing product costs
- Global X Robotics & Artificial Intelligence ETF 0.68%
- Vanguard Real Estate Index Fund ETF Shares 0.12%
- Weighted costs total (per year) 0.25%
The portfolio's total expense ratio (TER) averages to 0.25%, driven by the varied costs of the individual investments, from the higher fee for the Global X Robotics & Artificial Intelligence ETF to the lower fee for the Vanguard Real Estate Index Fund. While the costs are reasonable for a growth-oriented portfolio, investors should remain mindful of how these fees impact net returns, especially in lower-yield environments.
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