High-growth tech-focused portfolio with significant exposure to leading ETFs

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 is best suited for an investor with a high risk tolerance and a long-term investment horizon, aiming for substantial growth. The heavy concentration in technology and related ETFs indicates a strategy focused on capitalizing on the growth potential of the tech sector. Such an investor is likely comfortable with the volatility and sector-specific risks associated with a high-growth, technology-oriented investment approach. They are also likely to prioritize capital appreciation over income generation, given the portfolio's low dividend yield.

Positions

  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    44.34%
  • Invesco QQQ Trust
    QQQ - US46090E1038
    30.08%
  • VanEck Semiconductor ETF
    SMH - US92189F6768
    25.57%

This portfolio is heavily concentrated in the technology sector, with significant investments in three major ETFs: Invesco S&P 500® Momentum ETF, Invesco QQQ Trust, and VanEck Semiconductor ETF. The allocation highlights a strategic focus on momentum and technology, with 100% of the portfolio invested in stocks. While this composition aligns with a growth-oriented investment strategy, it also suggests a higher risk profile due to the lack of diversification across asset classes and the heavy reliance on a single sector.

Growth Info

The historical performance of this portfolio showcases a remarkable Compound Annual Growth Rate (CAGR) of 26.55%, with a maximum drawdown of -34.28%. These figures indicate a volatile but highly rewarding investment strategy, with days that make up 90% of returns numbering only 45. This performance is indicative of the portfolio's aggressive growth stance but also underscores the risks associated with high concentration in specific sectors and ETFs.

Projection Info

The Monte Carlo analysis, with 1,000 simulations, predicts a wide range of potential outcomes, from a 5th percentile growth of 509.2% to a 67th percentile growth of 4,936.2%. All simulations resulted in positive returns, with an annualized return of 31.86%. While these projections are promising, it's important to remember that they are based on historical data and cannot guarantee future performance. Investors should consider the inherent uncertainties and the portfolio's risk profile.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio's asset allocation is entirely in stocks, with no diversification into other asset classes such as bonds or real estate. This allocation strategy is typical for growth-focused investors willing to accept higher volatility for the potential of greater returns. However, the absence of other asset classes could increase the portfolio's susceptibility to market downturns, especially in the technology sector.

Sectors Info

  • Technology
    58%
  • Telecommunications
    12%
  • Financials
    9%
  • Consumer Discretionary
    6%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Health Care
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Energy
    1%
  • Basic Materials
    0%

The sectoral allocation is heavily skewed towards technology (58%), with smaller allocations in communication services, financial services, and other sectors. This concentration in technology and related sectors can amplify returns during tech booms but also increases risk during market corrections or downturns in the tech industry. Diversifying into other sectors could mitigate some of this risk while still allowing for significant growth potential.

Regions Info

  • North America
    95%
  • Asia Developed
    3%
  • Europe Developed
    2%
  • Latin America
    0%
  • Asia Emerging
    0%

Geographically, the portfolio is predominantly invested in North America (95%), with minimal exposure to Asia Developed and Europe Developed regions. This concentration in the North American market, particularly the U.S., leverages the growth of the American tech industry but also exposes the portfolio to regional economic fluctuations. Expanding geographic diversification could reduce risk and tap into growth opportunities in other developed and emerging markets.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    41%
  • Mid-cap
    10%
  • Small-cap
    0%

The market capitalization breakdown shows a focus on mega (48%) and big (41%) cap stocks, with medium cap stocks making up the remainder. This distribution suggests a preference for established, large companies that are typically less volatile than smaller companies. However, incorporating a small allocation to small and medium cap stocks could offer higher growth potential and further diversification benefits.

Dividends Info

  • Invesco QQQ Trust 0.30%
  • VanEck Semiconductor ETF 0.30%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 0.43%

The portfolio's overall dividend yield stands at 0.43%, which is relatively low, reflecting the growth-focused nature of the investments. While dividends are not the primary goal of this investment strategy, they can provide a steady income stream and contribute to total returns, especially in volatile or declining markets. Investors might consider balancing high-growth assets with dividend-paying stocks to enhance income and reduce volatility.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • VanEck Semiconductor ETF 0.35%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.21%

The total expense ratio (TER) of 0.21% is impressively low, which is beneficial for long-term performance as lower costs translate to higher net returns. Keeping costs low is crucial, especially in a growth-focused portfolio where the compounding effect can significantly impact the total value over time. This focus on cost efficiency is a positive aspect of the portfolio management strategy.

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.

This portfolio's current allocation, while aggressive and growth-oriented, may benefit from optimization to improve the risk-return profile. Using the Efficient Frontier could identify a mix of assets that achieves the highest expected return for a given level of risk. However, it's important to note that optimization is based on historical data, which may not predict future performance accurately. Adjusting the asset mix to include a broader range of sectors, asset classes, and geographies could enhance diversification and potentially improve the portfolio's efficiency.

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