Growth-Oriented Highly Diversified Portfolio with Strong Technology Focus and High Risk Reward Potential

Report created on Dec 2, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a mix of ETFs, with a notable emphasis on the Vanguard S&P 500 ETF at 36% and a total of nine different positions. This diversification across multiple ETFs suggests a strategy aimed at spreading risk while capturing growth opportunities. A significant portion of the assets is allocated to stocks, with a small portion in bonds and cash. This composition indicates a growth-oriented approach, which can provide substantial returns but also comes with higher volatility.

Growth Info

Historically, the portfolio has demonstrated strong performance with a compound annual growth rate (CAGR) of 18.11%. This impressive growth rate reflects the portfolio's focus on high-growth sectors and its ability to capitalize on market upswings. However, the maximum drawdown of -19.5% suggests that the portfolio can experience significant declines during market downturns. This performance profile is typical for growth-focused portfolios, which aim for high returns at the expense of higher volatility.

Projection Info

Using a Monte Carlo simulation, which involves running multiple scenarios to predict future performance, the portfolio shows promising potential. The median projection indicates a 558.17% increase, while the more optimistic scenarios suggest a return of over 1,000%. With 942 out of 1,000 simulations yielding positive returns, the portfolio's growth prospects appear robust. However, the 5th percentile projection of a -5.64% decline highlights the inherent risks associated with market fluctuations and economic uncertainties.

Asset classes Info

  • Stocks
    96%
  • Bonds
    3%
  • Cash
    2%

The portfolio is heavily weighted towards stocks, comprising over 96% of the asset allocation, with a small allocation to bonds and cash. This skew towards equities aligns with a growth strategy, aiming to maximize returns through capital appreciation. While this can lead to substantial gains, it also increases exposure to market volatility. To mitigate risk, consider a more balanced allocation by incorporating additional fixed-income assets, which can provide stability and income during market downturns.

Sectors Info

  • Technology
    38%
  • Financials
    14%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    4%
  • Real Estate
    3%
  • Basic Materials
    3%
  • Energy
    2%
  • Utilities
    2%

The portfolio exhibits a strong concentration in the technology sector, representing nearly 38% of the total allocation. This focus on technology reflects a belief in the sector's long-term growth potential, driven by innovation and digital transformation. While this can lead to high returns, it also increases sector-specific risk. To enhance stability, consider diversifying into other sectors, such as healthcare or consumer staples, which can provide a buffer against tech sector volatility.

Regions Info

  • North America
    72%
  • Japan
    12%
  • Europe Developed
    6%
  • Asia Developed
    4%
  • Asia Emerging
    2%
  • Australasia
    1%

Geographically, the portfolio is predominantly invested in North America, accounting for over 71% of the allocation. This concentration reflects confidence in the stability and growth prospects of the US market. However, it also exposes the portfolio to regional risks, such as economic downturns or policy changes. To mitigate these risks, consider increasing exposure to international markets, which can offer diversification benefits and access to emerging growth opportunities.

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 optimization chart suggests that there is room for improvement in terms of risk and return balance. By adjusting the asset allocation along the efficient frontier, one can achieve a more optimal mix that aligns with their risk tolerance and return expectations. For a riskier portfolio, consider increasing exposure to high-growth assets, while for a more conservative approach, focus on diversifying with bonds or other low-risk investments. Balancing risk and reward is key to optimizing portfolio performance.

Dividends Info

  • Fidelity® Crypto Industry and Digital Payments ETF 0.10%
  • Franklin FTSE Japan Hedged ETF 22.70%
  • Fidelity® Metaverse ETF 0.30%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.30%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Extended Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 3.40%

The portfolio's overall dividend yield stands at 3.4%, with individual ETFs contributing varying yields. Notably, the Franklin FTSE Japan Hedged ETF offers a high yield of 22.7%, providing a significant income stream. While dividends can enhance total returns and provide passive income, the portfolio's focus on growth-oriented sectors may limit overall yield potential. To increase income, consider reallocating some assets to higher-yielding investments, such as dividend-focused ETFs or bonds.

Ongoing product costs Info

  • Fidelity® Crypto Industry and Digital Payments ETF 0.39%
  • Franklin FTSE Japan Hedged ETF 0.09%
  • Fidelity® Metaverse ETF 0.39%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Extended Market Index Fund ETF Shares 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • WisdomTree Cybersecurity Fund 0.45%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, indicating a relatively low cost structure. This is advantageous as it helps maximize net returns by minimizing fees. However, individual ETFs like the WisdomTree Cybersecurity Fund have higher expense ratios, which can erode returns over time. To keep costs low, consider evaluating the expense ratios of each ETF and exploring lower-cost alternatives. Maintaining a cost-efficient portfolio is crucial for long-term investment success.

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