Growth-oriented portfolio with a heavy tilt towards tech and consumer cyclicals

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 focus on long-term growth. The heavy allocation to growth-oriented sectors like technology and consumer cyclicals, combined with a significant position in a single stock, indicates a strategy aiming for high returns at the expense of higher volatility. Such an investor likely has a long investment horizon, allowing them to weather short-term market fluctuations and capitalize on the growth potential of these sectors.

Positions

  • Amazon.com Inc
    AMZN - US0231351067
    40.19%
  • iShares Core Aggressive Allocation ETF
    AOA - US4642898591
    15.96%
  • iShares Core S&P 500 ETF
    IVV - US4642872000
    14.79%
  • Global X Millennials Consumer ETF
    MILN - US37954Y7647
    10.66%
  • Vanguard Long-Term Bond Index Fund ETF Shares
    BLV - US9219377937
    8.25%
  • PIMCO Enhanced Short Maturity Active Exchange-Traded Fund
    MINT - US72201R8337
    4.84%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    3.79%
  • iShares Global Clean Energy ETF
    ICLN - US4642882249
    1.51%

The portfolio exhibits a pronounced concentration in Amazon.com Inc, accounting for over 40% of its value, alongside significant investments in various ETFs. This structure indicates a growth-oriented strategy but raises concerns about overexposure to a single company's performance. The diversification across ETFs, covering aggressive allocations, S&P 500, consumer trends, bonds, and specific sectors like clean energy and dividends, attempts to balance this concentration. However, the heavy weighting in one stock alongside the ETFs suggests a need to reevaluate the balance between growth potential and risk management.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 17.05%, with a maximum drawdown of -43.53%. These figures highlight the portfolio's high growth potential, albeit with significant volatility. The days contributing to 90% of returns being limited to 31 suggests that the portfolio's performance is heavily reliant on short-term gains, which can be risky. Comparing this to benchmark indices would be crucial to understand if the return compensates adequately for the risk taken, especially considering the high concentration in Amazon.

Projection Info

Monte Carlo simulations, based on 1,000 runs, show a wide range of outcomes, with a median projected growth of 300.6%. This indicates a strong growth potential but also underscores the high risk, as evidenced by the 5th percentile outcome of 25.6%. These projections, while useful for understanding potential volatility and reward, should be interpreted with caution. Past performance and simulated outcomes do not guarantee future results, especially in a portfolio with significant concentration in specific sectors and companies.

Asset classes Info

  • Stocks
    84%
  • Bonds
    14%
  • Cash
    2%
  • No data
    0%
  • Other
    0%

The asset class distribution shows a predominant allocation to stocks (84%), with a smaller portion in bonds (14%) and a minimal cash reserve (2%). This allocation supports the portfolio's growth profile but may not provide sufficient cushion against market downturns. The bond allocation, though modest, could offer some stability, yet the overwhelming focus on equities, particularly in high-growth areas, amplifies both potential returns and volatility.

Sectors Info

  • Consumer Discretionary
    49%
  • Technology
    12%
  • Financials
    6%
  • Telecommunications
    5%
  • Industrials
    4%
  • Health Care
    3%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

Sector analysis reveals a heavy emphasis on consumer cyclicals and technology, constituting 61% of the portfolio. This concentration in sectors known for volatility and growth potential aligns with the portfolio's aggressive stance but also increases susceptibility to sector-specific downturns. Diversifying across more sectors or reducing the overweight positions could mitigate risks without significantly diluting growth prospects.

Regions Info

  • North America
    80%
  • Europe Developed
    3%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Japan
    1%
  • Latin America
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

Geographic allocation is heavily skewed towards North America (80%), with minimal exposure to international markets. This focus enhances exposure to the robust U.S. market but limits global diversification benefits. Considering adding investments in developed and emerging markets outside North America could provide broader exposure to global growth opportunities and reduce geographic concentration risk.

Market capitalization Info

  • Mega-cap
    55%
  • Large-cap
    16%
  • Mid-cap
    10%
  • Small-cap
    2%
  • Micro-cap
    1%

The market capitalization breakdown with a focus on mega (55%) and big (16%) cap stocks suggests a bias towards established, large companies, likely to reduce volatility compared to smaller cap investments. However, this approach may miss out on the higher growth potential offered by mid and small-cap companies. Rebalancing to include a wider range of market caps could enhance growth prospects and diversification.

Redundant positions Info

  • iShares Core S&P 500 ETF
    iShares Core Aggressive Allocation ETF
    High correlation

The portfolio's significant overlap between the iShares Core S&P 500 ETF and the iShares Core Aggressive Allocation ETF indicates redundancy, which could be limiting diversification benefits. Identifying and reducing investments in highly correlated assets can streamline the portfolio, ensuring each holding contributes uniquely to the portfolio's risk and return profile.

Dividends Info

  • iShares Core Aggressive Allocation ETF 2.20%
  • Vanguard Long-Term Bond Index Fund ETF Shares 4.60%
  • iShares Global Clean Energy ETF 1.70%
  • iShares Core S&P 500 ETF 1.20%
  • Global X Millennials Consumer ETF 0.20%
  • PIMCO Enhanced Short Maturity Active Exchange-Traded Fund 4.80%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Weighted yield (per year) 1.33%

Dividend yields across the portfolio contribute to its total yield of 1.33%, a modest addition to the overall return. In a growth-focused portfolio, dividends are not the primary objective, but they can provide a steady income stream and mitigate volatility. Reviewing dividend-yielding investments for their growth prospects and yield stability could ensure they align with the portfolio's long-term goals.

Ongoing product costs Info

  • iShares Core Aggressive Allocation ETF 0.15%
  • Vanguard Long-Term Bond Index Fund ETF Shares 0.04%
  • iShares Global Clean Energy ETF 0.41%
  • iShares Core S&P 500 ETF 0.03%
  • Global X Millennials Consumer ETF 0.50%
  • PIMCO Enhanced Short Maturity Active Exchange-Traded Fund 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) of 0.11% is impressively low, which is beneficial for long-term performance as lower costs translate directly into higher net returns. This cost efficiency is a strong aspect of the portfolio, ensuring that investment returns are not significantly eroded by fees. Maintaining this focus on cost-effectiveness while addressing diversification and risk management can enhance overall performance.

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 identify a more optimal risk-return balance. The current over-concentration in certain stocks and sectors, alongside the presence of highly correlated ETFs, suggests room for improvement. By adjusting allocations to reduce overlap and better balance risk, the portfolio could achieve a more efficient position, potentially enhancing returns for the same level of risk.

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