Balanced yet dynamic portfolio with a blend of momentum and value ETFs plus a touch of Bitcoin

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 looking for a balanced approach with a tilt towards growth, comfortable with moderate to high risk. It's ideal for those with a medium to long-term investment horizon, aiming for capital appreciation while willing to weather the market's volatility, including the cryptocurrency sector. The investor likely appreciates the blend of momentum and value strategies, recognizing the potential for both strategies to contribute to portfolio performance across different market cycles.

Positions

  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    30.00%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF
    AVLV - US0250723493
    25.00%
  • Invesco S&P International Developed Momentum ETF
    IDMO - US46138E2220
    15.00%
  • Invesco S&P MidCap Momentum ETF
    XMMO - US46137V4648
    15.00%
  • Dimensional International Value ETF
    DFIV - US25434V8072
    10.00%
  • iShares Bitcoin Trust
    IBIT - US46438F1012
    5.00%

This portfolio exhibits a strategic combination of momentum and value ETFs, complemented by a small allocation to Bitcoin. With 95% invested in stocks, predominantly through ETFs that track both U.S. and international markets, and a 5% venture into cryptocurrency, it showcases a balanced approach between chasing growth through momentum and seeking undervalued assets via value ETFs. The presence of Bitcoin, although minimal, introduces an alternative investment class, potentially enhancing returns but also adding volatility.

Warning Historical data is limited for this portfolio, which reduces the confidence in the calculated values.

Growth Info

Historically, this portfolio has demonstrated a robust Compound Annual Growth Rate (CAGR) of 29.22%, with a maximum drawdown of -17.55%. Such performance indicates not only strong growth potential but also resilience during market downturns. The days contributing to 90% of returns being limited to 15 suggest significant returns are concentrated in short, powerful bursts, characteristic of momentum strategies. However, past performance, as impressive as it may be, does not guarantee future results.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a substantial potential for growth. The simulations, based on historical data, offer a glimpse into the portfolio's potential under various market conditions, emphasizing the portfolio's growth orientation. However, it's important to remember these projections are hypothetical and should be viewed as one of many tools in decision-making.

Asset classes Info

  • Stocks
    95%
  • Other
    5%
  • Cash
    0%

The portfolio's heavy allocation to stocks, complemented by a small position in Bitcoin, indicates a clear growth orientation, leaning towards higher risk and potential return. While the stock allocation is diversified across several ETFs, the inclusion of Bitcoin adds an alternative asset class, aiming to capitalize on its high-reward potential despite its volatility. This mix reflects a strategy designed to outperform in bullish markets while maintaining some exposure to innovative assets.

Sectors Info

  • Financials
    24%
  • Industrials
    14%
  • Technology
    13%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Consumer Staples
    7%
  • Energy
    6%
  • Health Care
    5%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation shows a diversified yet focused approach, with significant positions in Financial Services, Industrials, Technology, and Consumer Cyclicals. This sectoral distribution suggests a balance between cyclical sectors, which tend to perform well during economic expansions, and more stable, defensive sectors like Consumer Defensive and Healthcare. Such a mix aims to capture growth in various market conditions while mitigating sector-specific risks.

Regions Info

  • North America
    73%
  • Europe Developed
    14%
  • Japan
    3%
  • Australasia
    2%
  • Asia Developed
    1%
  • Latin America
    1%
  • Africa/Middle East
    0%
  • Asia Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America, with notable exposures to developed European markets and a modest allocation to Japan and Australasia. This distribution underscores a focus on stable, developed economies, potentially limiting exposure to the volatility of emerging markets. However, the underrepresentation of emerging markets might also mean missing out on their higher growth potential.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    26%
  • Mid-cap
    24%
  • Small-cap
    10%
  • Micro-cap
    0%

The market capitalization breakdown reveals a diversified exposure across mega, big, and medium-sized companies, with a smaller allocation to small caps and no investment in micro caps. This indicates a preference for established companies likely to offer stability and reliable growth, while the presence of mid and small caps suggests a pursuit of higher growth opportunities, albeit with increased risk.

Dividends Info

  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.60%
  • Dimensional International Value ETF 3.30%
  • Invesco S&P International Developed Momentum ETF 2.00%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Invesco S&P MidCap Momentum ETF 0.70%
  • Weighted yield (per year) 1.32%

The dividend yield across the ETFs ranges significantly, from as low as 0.60% to as high as 3.30%. This variance highlights the portfolio's dual focus on growth and income, with the overall yield contributing to the portfolio's total return. While the growth-oriented assets may offer lower yields, the higher-yielding ETFs help provide a steady income stream, which can be particularly valuable in volatile or bearish markets.

Ongoing product costs Info

  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Dimensional International Value ETF 0.27%
  • iShares Bitcoin Trust 0.12%
  • Invesco S&P International Developed Momentum ETF 0.25%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.20%

The Total Expense Ratio (TER) of 0.20% across the portfolio is impressively low, especially considering the diversified exposure to both U.S. and international markets. Keeping costs in check is crucial for enhancing long-term returns, as even seemingly small fees can compound significantly over time. This cost efficiency is a positive aspect of the portfolio, supporting better performance net of fees.

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 optimal balance given the current asset mix. This positioning indicates that, for its level of risk, the portfolio is expected to achieve the highest possible return. However, investors should periodically review their asset allocation, as shifts in market conditions and personal financial goals might necessitate adjustments to maintain this optimal balance.

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