Balanced and broadly diversified portfolio focusing on momentum and global equity exposure

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

Balanced Investors

This portfolio suits an investor seeking balanced growth with a moderate risk tolerance and a long-term investment horizon. It is designed for individuals who appreciate the growth potential of equity investments, including a strong tilt towards technology and financial sectors, while desiring some level of global diversification to mitigate risk. This investor is likely comfortable with market fluctuations and seeks to capitalize on both U.S. and international growth opportunities.

Positions

  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    40.00%
  • Dimensional World ex U.S. Core Equity 2 ETF
    DFAX - US25434V8809
    30.00%
  • Dimensional U.S. Equity ETF
    DFUS - US25434V4014
    30.00%

The portfolio is structured around three ETFs: Invesco S&P 500® Momentum ETF (40%), Dimensional World ex U.S. Core Equity 2 ETF (30%), and Dimensional U.S. Equity ETF (30%). This composition indicates a strategic focus on capturing momentum within the U.S. market while ensuring global diversification through significant investments in international stocks. The allocation across these ETFs suggests a balanced approach, aiming to leverage the growth potential of high-momentum stocks alongside the stability and opportunities presented by a global equity stance.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.35%, with a maximum drawdown of -24.15%. The days contributing most significantly to returns are relatively few, underscoring the impact of short-term high-growth periods on overall performance. This historical performance, characterized by high growth with moderate drawdowns, aligns well with the balanced risk profile, indicating that the portfolio's strategy has been effective in navigating market volatility while capitalizing on growth opportunities.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a wide range of possible performances for this portfolio. With 997 out of 1,000 simulations yielding positive returns and a median projected increase of 492.9%, these simulations reinforce the portfolio's potential for substantial growth. However, the significant spread between the 5th and 67th percentiles highlights the inherent uncertainty and risk in predicting future market movements.

Asset classes Info

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

The portfolio is exclusively invested in stocks, with no allocation to bonds, other asset classes, or unclassified assets. This singular focus on equities is indicative of a growth-oriented strategy but also suggests a higher level of risk compared to portfolios that include bonds or other diversifying assets. While this approach aligns with the portfolio's balanced risk classification, investors might consider whether a small allocation to non-equity asset classes could enhance risk-adjusted returns.

Sectors Info

  • Technology
    28%
  • Financials
    17%
  • Industrials
    12%
  • Telecommunications
    11%
  • Consumer Discretionary
    9%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    1%

Sector allocation is heavily weighted towards Technology (28%) and Financial Services (17%), followed by Industrials, Communication Services, and Consumer Cyclicals. This sector distribution reflects a growth-oriented strategy, given the high growth potential often associated with these sectors. However, the concentration in Technology and Financial Services also introduces sector-specific risks, which should be monitored, especially in volatile market conditions.

Regions Info

  • North America
    72%
  • Europe Developed
    11%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly invested in North America (72%), with diversified exposure across developed European markets, emerging Asian markets, Japan, and other regions. This global exposure ensures that the portfolio benefits from growth across different economies, mitigating risks associated with any single market. However, the heavy weighting towards North America suggests a home bias that may limit the portfolio's potential to capitalize on faster-growing international markets.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    35%
  • Mid-cap
    19%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a strong preference for Mega (40%) and Big (35%) cap stocks, with lesser exposure to Medium, Small, and Micro caps. This skew towards larger companies is typical for investors seeking stability and lower volatility. However, including a greater mix of mid to small-cap stocks could enhance growth potential and diversification, albeit with increased risk.

Dividends Info

  • Dimensional World ex U.S. Core Equity 2 ETF 2.70%
  • Dimensional U.S. Equity ETF 1.00%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 1.35%

The portfolio's overall dividend yield stands at 1.35%, with individual ETF yields ranging from 0.60% to 2.70%. This moderate yield contributes to the total return, offering a balance between income and growth. For investors prioritizing income, adjusting the portfolio to include assets with higher dividend yields might be beneficial, though this could also shift the risk-return profile.

Ongoing product costs Info

  • Dimensional World ex U.S. Core Equity 2 ETF 0.28%
  • Dimensional U.S. Equity ETF 0.09%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.16%

The total expense ratio (TER) of 0.16% is impressively low, maximizing the potential for net returns. This cost efficiency is crucial for long-term investment success, as lower costs directly translate to higher returns for investors. The portfolio's focus on low-cost ETFs demonstrates a strategic approach to minimizing expenses without sacrificing diversification or exposure to desired sectors and geographies.

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.

Regarding risk vs. return optimization, the portfolio appears to be positioned near the Efficient Frontier, suggesting an effective balance between risk and potential returns. However, continuous evaluation and slight adjustments could further optimize its position, ensuring that the portfolio maintains the best possible risk-return ratio as market conditions evolve.

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