Growth-focused portfolio with a strong tilt towards technology and large-cap stocks

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 growth orientation, comfortable with significant exposure to the volatility of the tech sector and large-cap stocks. The ideal investor would have a medium to high risk tolerance, looking for substantial long-term capital appreciation. They should be prepared for the ups and downs of a growth-focused strategy, with a time horizon long enough to weather potential market corrections. This approach is best suited for those who can remain invested through periods of market volatility without needing to liquidate assets.

Positions

  • Vanguard Growth Index Fund ETF Shares
    VUG - US9229087369
    41.08%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    39.48%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    10.64%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    8.80%

The portfolio is heavily concentrated in three ETFs that track large-cap US equities, with a significant emphasis on the technology sector. This allocation suggests a growth-oriented strategy, leaning heavily on the performance of major US companies. The Vanguard Growth Index Fund ETF Shares, Vanguard S&P 500 ETF, and Invesco NASDAQ 100 ETF together constitute over 90% of the portfolio, reflecting a strong confidence in the US equity market. However, this concentration also indicates a low level of diversification, particularly in terms of asset classes and geography, with a complete focus on North American stocks.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 15.79%, with a maximum drawdown of -28.96%. This performance is indicative of a high-growth strategy but comes with considerable volatility, as evidenced by the significant drawdown. The days contributing most to the returns are relatively few, suggesting that the portfolio's gains are heavily reliant on strong market days. When comparing this performance to benchmarks, it's important to consider the inherent risks associated with a high concentration in technology and large-cap stocks.

Projection Info

Monte Carlo simulations, using 1,000 iterations, forecast a wide range of outcomes, with a median increase of 579.1%. While the projections are optimistic, showing a high likelihood of positive returns (993 out of 1,000 simulations), it's crucial to remember that these simulations are based on historical data. They do not account for unforeseen market conditions. This method helps in understanding potential volatility and return scenarios but should not be the sole basis for investment decisions.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio's allocation is exclusively in stocks, with no diversification into other asset classes like bonds or real estate. This singular focus enhances the portfolio's growth potential but also increases its risk, especially during market downturns. Diversifying across different asset classes can help mitigate risk and provide more stable returns over time.

Sectors Info

  • Technology
    42%
  • Consumer Discretionary
    12%
  • Telecommunications
    12%
  • Financials
    8%
  • Health Care
    8%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    1%
  • Basic Materials
    1%
  • Utilities
    1%

A 42% allocation to technology underscores the portfolio's growth orientation but also its susceptibility to sector-specific downturns. The presence of consumer cyclicals, communication services, and healthcare adds some balance, but the overall sector distribution still leans heavily towards high-growth, high-volatility areas. Diversifying into more defensive sectors or those with lower correlation to tech could provide a buffer during tech-specific market corrections.

Regions Info

  • North America
    100%
  • Europe Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%

The portfolio's geographic allocation is entirely within North America, missing out on potential growth and diversification benefits from developed European markets, emerging Asian economies, and other regions. This geographic concentration increases exposure to region-specific economic downturns, political instability, and currency risks.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Small-cap
    1%
  • Micro-cap
    0%

With 51% in mega-cap stocks, the portfolio is positioned to benefit from the stability and growth potential of the largest companies. However, the minimal exposure to small and micro-cap stocks limits opportunities for higher growth rates that these smaller companies can offer, albeit with higher risk. Adjusting the market cap distribution could enhance potential returns and diversification.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Invesco NASDAQ 100 ETF
    Vanguard Growth Index Fund ETF Shares
    High correlation

The high correlation among the portfolio's major holdings indicates a redundancy in exposure, particularly among the Vanguard S&P 500 ETF, Invesco NASDAQ 100 ETF, and Vanguard Growth Index Fund ETF Shares. This redundancy limits diversification benefits, as these assets are likely to react similarly to market changes. Reducing overlap by reallocating assets could improve the portfolio's risk-adjusted returns.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Weighted yield (per year) 0.99%

The portfolio's overall dividend yield stands at 0.99%, with the Schwab U.S. Dividend Equity ETF offering the highest yield at 3.80%. While the focus on growth stocks typically means lower dividend yields, dividends can contribute to total returns, especially in volatile or bear markets. Considering a slightly higher allocation to dividend-yielding assets could provide a steady income stream and reduce volatility.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, which is beneficial for long-term growth as lower costs translate to higher net returns. This efficiency in managing costs is commendable and aligns with best practices for maximizing investment returns over time.

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 the portfolio using the Efficient Frontier could improve the risk-return ratio by adjusting the current asset allocation. The focus should be on reducing the overlap among highly correlated assets, which currently do not contribute to diversification. By reallocating investments into less correlated assets or different asset classes, the portfolio could achieve a more efficient distribution, potentially enhancing returns for the same level of risk.

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.