A high-risk concentrated portfolio with significant exposure to energy and tactical credit

Report created on Feb 12, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily concentrated with 54.64% in the PIMCO Energy & Tactical Credit Opps fund, 33.03% in SPDR Gold MiniShares, and 12.33% in Vanguard S&P 500 ETF. This composition reflects a focus on energy and tactical credit, with gold and U.S. equities providing some diversification. Compared to a typical growth portfolio, this one is less diversified, increasing exposure to specific market movements. Consider balancing the allocation to include more sectors or asset classes to reduce concentration risk and improve diversification.

Growth Info

The historical performance of this portfolio shows a strong CAGR of 17.18%, indicating robust growth over time. However, the maximum drawdown of -44.07% highlights significant volatility. In comparison to benchmark indices, the portfolio's performance aligns with high-risk, high-reward strategies. While past performance is promising, it does not guarantee future results. To mitigate potential downturns, consider strategies that could reduce volatility, such as diversifying into less correlated assets.

Projection Info

Monte Carlo simulations provide a forward-looking analysis, projecting a wide range of potential outcomes. The 1,000 simulations show a 5th percentile return of 20.3% and a 67th percentile of 906.5%, with 971 simulations yielding positive returns. This suggests a high potential for growth but also significant risk. Monte Carlo analysis relies on historical data, which may not reflect future conditions. Regularly reassessing the portfolio's alignment with personal risk tolerance is advisable.

Asset classes Info

  • Stocks
    50%
  • Bonds
    39%
  • Other
    34%

The portfolio is divided among stocks (50%), bonds (39%), and other assets (34%). This asset allocation shows a moderate balance but leans heavily towards bonds and alternative investments. Compared to standard benchmarks, the bond allocation is relatively high, which might reduce growth potential but can offer stability. Consider adjusting the balance to align with growth-oriented goals, potentially increasing equity exposure to enhance long-term growth prospects.

Sectors Info

  • Technology
    4%
  • Financials
    2%
  • Consumer Discretionary
    1%
  • Health Care
    1%
  • Telecommunications
    1%
  • Industrials
    1%
  • Consumer Staples
    1%

The sector allocation is heavily skewed, with minimal exposure to diverse sectors. Technology, financial services, and consumer cyclicals make up small portions, while energy is notably absent despite the portfolio's name. A lack of sector diversification can lead to increased risk during sector-specific downturns. To enhance sectoral balance, introducing exposure to additional sectors could stabilize returns and reduce reliance on specific market segments.

Regions Info

  • North America
    66%
  • Europe Developed
    1%

Geographically, the portfolio is concentrated in North America (66%), with minimal exposure to other regions. This limited geographic diversification may increase vulnerability to regional market fluctuations. Compared to global benchmarks, this allocation is notably regional. Expanding exposure to international markets, especially in emerging economies, could provide growth opportunities and reduce regional risk.

Market capitalization Info

  • Mega-cap
    6%
  • Large-cap
    4%
  • Mid-cap
    2%

The portfolio's market capitalization exposure is limited, with a focus on mega (6%), big (4%), and medium (2%) cap stocks. This lack of small-cap exposure suggests a conservative approach within equities, potentially missing out on higher growth opportunities. To balance risk and reward, consider incorporating small-cap stocks, which historically offer higher growth potential, albeit with increased volatility.

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's risk-return profile could be enhanced by exploring the Efficient Frontier, which identifies the optimal asset allocation for a given level of risk. This optimization focuses on reallocating existing assets to achieve the best possible risk-return ratio. While the current allocation may align with growth goals, slight adjustments could improve efficiency without compromising the overall strategy.

Dividends Info

  • PIMCO Energy & Tactical Credit Opps 4.70%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 2.72%

The portfolio's dividend yield stands at 2.72%, with PIMCO Energy & Tactical Credit Opps contributing 4.70% and Vanguard S&P 500 ETF at 1.20%. Dividends provide a steady income stream, which can be particularly beneficial in volatile markets. However, reliance on high-yield investments may increase risk. Balancing dividend-paying stocks with growth-oriented equities can offer a mix of income and capital appreciation.

Ongoing product costs Info

  • SPDR Gold MiniShares 0.10%
  • PIMCO Energy & Tactical Credit Opps 2.96%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 1.65%

The total expense ratio (TER) of the portfolio is 1.65%, with PIMCO Energy & Tactical Credit Opps having a high cost of 2.96%. High costs can erode returns over time, impacting long-term performance. Reducing expenses by considering lower-cost alternatives or negotiating fees can enhance net returns. Regularly reviewing and optimizing costs is crucial for maintaining efficient portfolio performance.

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