A growth-focused portfolio with a strong tilt towards healthcare and biotech sectors

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a high risk tolerance and a long-term investment horizon, focused on capital growth. It's tailored for those who believe in the healthcare and biotech sectors' potential outperformance. The investor should be comfortable with significant sector concentration and the associated volatility, understanding that high growth opportunities often come with higher risk.

Positions

  • SPDR® S&P Biotech ETF
    XBI - US78464A8707
    23.70%
  • Dimensional ETF Trust
    DFSV - US25434V8155
    20.70%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    19.70%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    10.60%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    7.90%
  • Virtus LifeSci Biotech Clinical Trials ETF
    BBC - US26923G3011
    6.40%
  • iShares U.S. Medical Devices ETF
    IHI - US4642888105
    4.40%
  • SPDR® S&P Health Care Equipment ETF
    XHE - US78464A5810
    4.20%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND
    FZROX - US31635T7081
    2.40%

This portfolio is characterized by a significant emphasis on the healthcare and biotech sectors, making up 43% of the allocation, which is notably higher compared to standard diversified portfolios. The presence of ETFs targeting specific niches within healthcare, such as biotech and medical devices, suggests a strategic bet on this industry's growth. The inclusion of broad-market ETFs, like the Vanguard S&P 500 and Fidelity Zero Total Market Index Fund, alongside specialized healthcare ETFs, indicates an attempt to balance sector-specific risks with the broader market exposure.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.46%, with a maximum drawdown of -26.27%. This performance suggests resilience and the potential for strong returns, albeit with significant volatility. The days contributing most to returns being concentrated indicates that the portfolio's performance can be highly dependent on specific, short-term market movements. Comparing this to a benchmark diversified portfolio, the volatility is higher, which is expected given the sector concentration.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential returns for this portfolio. The median outcome suggests a potential 151.5% return, indicating optimism for growth. However, the significant spread in simulation outcomes, with a 5th percentile showing a -49% return, underscores the high risk associated with the portfolio's current configuration. It's important to note that these projections are hypothetical and should not be the sole basis for investment decisions.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio is entirely composed of stocks, with no allocation to cash, bonds, or alternative investments. This asset class concentration enhances growth potential but also increases risk, particularly in market downturns. Diversifying across different asset classes can provide a buffer against stock market volatility and reduce overall portfolio risk.

Sectors Info

  • Health Care
    43%
  • Financials
    15%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Technology
    8%
  • Energy
    6%
  • Basic Materials
    3%
  • Consumer Staples
    3%
  • Telecommunications
    3%
  • Real Estate
    1%
  • Utilities
    1%
  • Consumer Discretionary
    0%

With 43% invested in healthcare, followed by financial services and consumer cyclicals, the portfolio shows a clear preference for sectors that can offer high growth. However, this concentration also exposes the portfolio to sector-specific downturns. Diversifying more evenly across sectors could mitigate this risk while still capturing growth opportunities in other areas of the market.

Regions Info

  • North America
    90%
  • Europe Developed
    5%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%
  • Latin America
    1%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

The geographic allocation is heavily skewed towards North America (90%), with minimal exposure to international markets. This concentration benefits from the robust performance of the U.S. market but limits global diversification. Expanding into developed European and emerging Asian markets could offer growth opportunities and reduce geographic risk.

Market capitalization Info

  • Small-cap
    33%
  • Micro-cap
    33%
  • Mid-cap
    12%
  • Large-cap
    11%
  • Mega-cap
    10%

The equal split between small and micro-cap stocks (66% combined) aligns with the portfolio's growth profile but adds volatility and risk, as these companies are often more susceptible to market swings. Including a greater proportion of medium to mega-cap stocks could provide stability without significantly compromising growth potential.

Redundant positions Info

  • Avantis® U.S. Small Cap Value ETF
    Dimensional ETF Trust
    High correlation
  • Vanguard S&P 500 ETF
    FIDELITY ZERO TOTAL MARKET INDEX FUND
    High correlation

The portfolio contains highly correlated asset groups, notably between small-cap value ETFs and broad-market funds. This redundancy limits diversification benefits and may not contribute additional value. Reallocating from overlapping assets to less correlated options could enhance portfolio efficiency by reducing unnecessary exposure to similar risks.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Virtus LifeSci Biotech Clinical Trials ETF 0.70%
  • Dimensional ETF Trust 1.60%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND 1.00%
  • iShares U.S. Medical Devices ETF 0.40%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • SPDR® S&P Health Care Equipment ETF 0.10%
  • Weighted yield (per year) 1.11%

The overall dividend yield of 1.11% is modest, reflecting the growth-oriented nature of the portfolio. While dividends contribute to total returns, the focus here is clearly on capital appreciation. Investors seeking income might consider increasing allocations to higher-yielding assets, though this could shift the portfolio's risk-return profile.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Virtus LifeSci Biotech Clinical Trials ETF 0.79%
  • Dimensional ETF Trust 0.31%
  • iShares U.S. Medical Devices ETF 0.40%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • SPDR® S&P Biotech ETF 0.35%
  • SPDR® S&P Health Care Equipment ETF 0.35%
  • Weighted costs total (per year) 0.29%

The Total Expense Ratio (TER) averages 0.29%, which is reasonable given the specialized nature of many included ETFs. However, costs can erode long-term returns, and the portfolio could benefit from periodically reviewing fund expenses to ensure they remain competitive, particularly for the higher-cost funds.

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.

Optimizing for the Efficient Frontier suggests that an adjusted portfolio could achieve an expected return of 14.94% at a similar risk level. This implies that the current asset allocation could be improved by reducing overlap and reallocating towards less correlated, potentially more efficient assets. Such adjustments would aim to enhance returns without increasing risk disproportionately.

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