A balanced portfolio with strong tech focus and high dividend yield

Report created on Jan 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio comprises five ETFs, heavily weighted towards U.S. large-cap stocks with a notable emphasis on technology. The SPDR® Portfolio S&P 500 ETF holds the largest share at 35%, followed by the Schwab U.S. Large-Cap Growth ETF at 25%. While these allocations provide exposure to well-established companies, the portfolio lacks diversification across asset classes, focusing almost exclusively on equities. Compared to typical balanced portfolios, which may include bonds and other asset types, this portfolio leans heavily on stock performance. To enhance diversification, consider incorporating other asset classes like bonds or real estate to mitigate risk.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 15.06%, indicating robust growth over time. This performance is impressive compared to broad market indices, which typically yield lower average returns. However, the maximum drawdown of -17.46% suggests vulnerability to market downturns. While past performance is not a guarantee of future results, it provides a useful benchmark. To preserve gains during volatile periods, consider strategies like rebalancing or including more defensive assets. Understanding these historical trends can help in making more informed future investment decisions.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a median potential return of 670.47%. This suggests a high likelihood of significant growth, though it's important to remember that simulations are based on past data and assumptions. The range of outcomes, from a 5th percentile of 135.84% to a 67th percentile of 915.74%, highlights the potential variability in returns. While the projected returns are promising, it's crucial to consider the inherent uncertainty and maintain a flexible investment strategy that can adapt to changing market conditions.

Asset classes Info

  • Stocks
    98%
  • No data
    1%

The portfolio is overwhelmingly allocated to stocks, comprising over 98% of the total assets. This concentration on equities can drive growth but also increases susceptibility to market volatility. A balanced portfolio typically includes a mix of asset classes, such as bonds, which can provide stability and income during market downturns. By diversifying into other asset classes, investors can potentially reduce risk and smooth out returns over time. Consider incorporating fixed-income securities or alternative investments to achieve a more balanced risk-return profile.

Sectors Info

  • Technology
    41%
  • Consumer Discretionary
    11%
  • Financials
    10%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    6%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

With 40.76% allocated to technology, the portfolio is heavily concentrated in this sector. While tech stocks have driven significant growth, they can also be volatile, especially during periods of regulatory scrutiny or interest rate hikes. The remaining sectors, such as consumer cyclicals and financial services, are less prominently represented. This sectoral imbalance could lead to heightened risk if technology underperforms. For greater stability, consider diversifying into sectors that may perform differently under various economic conditions, such as healthcare or consumer defensives.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio's geographic exposure is predominantly in North America, accounting for 99.32% of the allocation. This concentration limits exposure to international markets, which can offer diversification benefits and potential growth opportunities. A more geographically diverse portfolio might include assets from Europe, Asia, or emerging markets. This can help mitigate regional risks and tap into global economic trends. Consider gradually increasing exposure to non-U.S. markets to enhance diversification and capture opportunities in different economic environments.

Redundant positions Info

  • Technology Select Sector SPDR® Fund
    Schwab U.S. Large-Cap Growth ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    SPDR® Portfolio S&P 500 ETF
    High correlation

The portfolio contains several highly correlated assets, particularly within the technology sector. When assets move together, diversification benefits are reduced, potentially increasing risk during market downturns. High correlation can lead to amplified losses if the sector faces adverse conditions. To improve diversification, consider reducing exposure to overlapping assets and introducing investments with lower correlation. This can help balance the portfolio, providing a cushion against sector-specific volatility and enhancing overall risk management.

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 current portfolio could benefit from optimization using the Efficient Frontier, which seeks the best risk-return ratio. However, before optimizing, focus on reducing highly correlated assets that limit diversification. The Efficient Frontier can guide adjustments to the current asset allocation, but it doesn't inherently address diversification across asset classes or sectors. By rebalancing towards a more diversified mix, you can potentially enhance the portfolio's efficiency, balancing risk and return more effectively.

Dividends Info

  • JPMorgan Nasdaq Equity Premium Income ETF 9.70%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Technology Select Sector SPDR® Fund 0.50%
  • Weighted yield (per year) 2.32%

The portfolio's dividend yield stands at 2.32%, with notable contributions from the JPMorgan Nasdaq Equity Premium Income ETF at 9.7% and the Schwab U.S. Dividend Equity ETF at 3.7%. Dividends can provide a steady income stream and help offset market volatility. For investors seeking income, maintaining or increasing exposure to dividend-paying assets can be advantageous. However, it's essential to balance yield with growth potential to ensure the portfolio aligns with long-term financial goals. Consider evaluating the sustainability of high dividend yields to ensure consistent income.

Ongoing product costs Info

  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Technology Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.07%

The portfolio boasts a low Total Expense Ratio (TER) of 0.07%, which is favorable for long-term returns. Lower costs mean more of your investment's returns stay in your pocket, compounding over time. The range of individual fund costs, from 0.02% to 0.35%, is competitive, especially for the larger holdings. This cost efficiency supports better performance by minimizing drag on returns. Continue to monitor fund expenses and consider lower-cost alternatives if available, ensuring that cost savings do not compromise the quality or objectives of the investments.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey