A balanced portfolio with a strong tech focus and moderate geographic diversification

Report created on Mar 7, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with 95% in stocks and a small 5% in gold. This structure aligns well with a balanced risk profile, providing potential growth through equity exposure while offering some stability with gold. Compared to a typical balanced benchmark, this portfolio leans more towards stocks, which may increase volatility but also potential returns. To enhance diversification, consider adding more asset classes like bonds or real estate. This can help manage risk, especially during stock market downturns, by providing a buffer against equity volatility.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 13.72%, outperforming many traditional balanced benchmarks. A significant drawdown of -30.98% highlights its susceptibility to market downturns. The concentrated return periods, with 90% of returns generated in just 33 days, suggest high volatility. This indicates that while the portfolio has potential for high returns, it may also experience sharp declines. To mitigate this, consider strategies like dollar-cost averaging, which can help smooth out the impact of volatility over time.

Projection Info

Monte Carlo simulations offer a glimpse into potential future outcomes by analyzing historical data. The simulations suggest a median return of 349.3%, with a high probability of positive returns. However, it's crucial to remember that these projections are based on past data and can't predict future results with certainty. To prepare for various scenarios, maintain a diversified approach and regularly review asset allocations. This proactive strategy can help adjust the portfolio to better align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    95%
  • Other
    5%

The portfolio's allocation is heavily skewed towards stocks, with a minor allocation in gold. This concentration may limit diversification benefits, especially in volatile markets. Diversification is essential for managing risk, as it spreads exposure across different asset classes. Consider incorporating bonds or other alternative investments to balance the portfolio. This can provide stability during market downturns, as bonds typically have lower volatility compared to stocks. A more balanced asset allocation can enhance the portfolio's risk-adjusted returns over the long term.

Sectors Info

  • Technology
    40%
  • Consumer Discretionary
    11%
  • Financials
    11%
  • Telecommunications
    9%
  • Health Care
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

With a substantial 40% allocation to technology, the portfolio is heavily concentrated in a single sector. This focus can lead to increased volatility, especially during periods of interest rate hikes or regulatory changes affecting tech companies. While technology has driven substantial growth, it's essential to balance this with exposure to other sectors. Diversifying into sectors like healthcare, consumer goods, or industrials can provide stability and reduce reliance on the tech sector's performance. This approach can help mitigate sector-specific risks and enhance overall portfolio resilience.

Regions Info

  • North America
    82%
  • Asia Emerging
    12%

The portfolio's geographic exposure is predominantly in North America, with 82% allocated there. This heavy concentration may limit global diversification, exposing the portfolio to regional economic risks. While the U.S. market has been a strong performer, consider increasing exposure to other regions like Europe or emerging markets. This can enhance diversification and reduce dependence on a single market's performance. By spreading investments across different geographic areas, the portfolio can better withstand regional economic fluctuations and capture growth opportunities worldwide.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    30%
  • Mid-cap
    14%
  • No data
    5%
  • Small-cap
    2%

The portfolio is primarily invested in large-cap stocks, with 78% allocated to mega and big-cap companies. This focus on large-cap stocks provides stability and lower volatility compared to small-cap stocks. However, it may also limit growth potential. To capture more growth opportunities, consider increasing exposure to mid-cap and small-cap stocks. These companies often have higher growth potential, albeit with increased risk. A balanced approach across different market capitalizations can enhance diversification and improve the portfolio's overall risk-return profile.

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 be optimized further using the Efficient Frontier, which identifies the best possible risk-return ratio. The current allocation shows potential for improvement, with an optimal portfolio offering a higher expected return of 14.77%. This optimization focuses on reallocating existing assets to achieve better efficiency without increasing risk. By adjusting weightings among the current holdings, the portfolio can enhance its risk-return profile. Regularly reviewing and rebalancing the portfolio according to the Efficient Frontier can help maintain optimal performance and align with changing market conditions.

Dividends Info

  • iShares MSCI China ETF 0.30%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.99%

The portfolio has a modest dividend yield of 0.99%, primarily driven by the Vanguard S&P 500 ETF. While dividend income can provide a steady cash flow, the focus on growth-oriented sectors like technology may limit dividend potential. For investors seeking income, consider increasing exposure to dividend-paying stocks or funds. This can enhance cash flow and provide a buffer during market downturns. However, it's essential to balance income needs with growth potential, ensuring the portfolio aligns with long-term financial goals.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • iShares MSCI China ETF 0.59%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is impressively low at 0.13%, supporting better long-term performance. Low costs are crucial for maximizing returns, as they compound over time. The Vanguard S&P 500 ETF's minimal cost of 0.03% contributes significantly to this efficiency. While the SPDR Gold Shares and iShares MSCI China ETF have higher costs, their impact is limited due to their smaller allocations. Regularly review and compare fund expenses to ensure cost-effectiveness. Maintaining low costs can enhance the portfolio's overall return potential and support long-term financial success.

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