A cautious yet growth-oriented portfolio with a strong dividend focus

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

Cautious Investors

This portfolio suits an investor seeking balanced growth with moderate risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining exposure to global equities, making it ideal for individuals looking to build wealth over time. The investor likely values a mix of income and capital appreciation, with a cautious approach to risk management. This profile fits those who prefer a diversified, equity-oriented portfolio but with a significant bond allocation to buffer against market volatility.

Positions

  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    30.00%
  • American Century ETF Trust
    AVGV - US0250722164
    20.00%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF
    JAAA - US47103U8457
    20.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    15.00%
  • Vanguard International High Dividend Yield Index Fund ETF Shares
    VYMI - US9219467944
    15.00%

This portfolio showcases a strategic blend of 80% stocks and 20% bonds, leaning heavily towards equity-based ETFs. The significant allocation to the Invesco S&P 500® Momentum ETF and a varied mix of other equity ETFs, including those focused on dividends and specific sectors, underlines a growth-oriented approach within a cautious risk framework. The inclusion of bonds via the Janus Henderson AAA CLO ETF adds a layer of stability, balancing the portfolio's overall risk profile. This composition suggests a well-thought-out strategy aiming to capitalize on equity market gains while mitigating risks through fixed income securities.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 19.69% and a maximum drawdown of -13.69%, the portfolio has demonstrated robust growth potential with a relatively moderate level of risk. The days contributing to 90% of returns being limited to 26 indicates that the portfolio's performance has been significantly influenced by a few strong market days. This historical performance, while impressive, underscores the importance of being positioned for market upswings and the volatility inherent in equity-focused investments.

Projection Info

Monte Carlo simulations, employing thousands of random trials to project future portfolio performance, suggest a wide range of outcomes with a median increase of 1,023.4%. This analysis, while based on historical data, provides a probabilistic forecast that the portfolio could continue to grow substantially. However, it's crucial to remember that these projections cannot guarantee future performance and should be viewed as one of many tools in making informed investment decisions.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio's asset class allocation, with a dominant 80% in stocks and 20% in bonds, aligns with a growth-oriented strategy while maintaining a cushion against market volatility. This mix supports the pursuit of capital appreciation through equities, complemented by the income and stability offered by bonds. Such a distribution is suitable for investors with a moderate risk tolerance and a long-term investment horizon, aiming for growth while seeking to mitigate short-term market fluctuations.

Sectors Info

  • Financials
    18%
  • Technology
    15%
  • Industrials
    9%
  • Consumer Discretionary
    7%
  • Telecommunications
    7%
  • Energy
    7%
  • Consumer Staples
    7%
  • Health Care
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sectoral allocation spans across financial services, technology, industrials, and consumer cyclicals, among others, reflecting a diversified approach. The emphasis on financial services and technology indicates a tilt towards sectors that can offer growth and innovation-driven returns. However, this concentration also exposes the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting these industries. Diversifying across a broader range of sectors could help in smoothing out sector-specific volatilities.

Regions Info

  • North America
    59%
  • Europe Developed
    9%
  • Japan
    4%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

The portfolio's geographic distribution, with a significant 59% in North America and smaller allocations across various global markets, suggests a strong home bias with a sprinkle of international exposure. While this positioning may capitalize on the robust U.S. equity market, it might limit the potential benefits of global diversification. Expanding the international allocation, especially to emerging markets, could offer additional growth opportunities and reduce the impact of regional downturns.

Market capitalization Info

  • Large-cap
    31%
  • Mega-cap
    24%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown, favoring big and mega-cap stocks, underlines a preference for established, large-scale companies. This bias towards larger companies, which are often considered more stable and resilient during market downturns, aligns with the portfolio's cautious risk profile. However, incorporating a greater mix of medium, small, and micro-cap stocks could enhance potential returns, albeit with increased volatility.

Dividends Info

  • American Century ETF Trust 2.00%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 5.50%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 3.80%
  • Weighted yield (per year) 2.80%

The dividend yield aspect of the portfolio, averaging 2.80% across its holdings, contributes to its total return, offering a blend of income and growth. This focus on dividend-yielding ETFs, particularly in the context of a cautious investment strategy, provides a steady income stream while still participating in equity market growth. Regular dividend income can also offer a buffer during market volatility, reinforcing the portfolio's risk-adjusted return profile.

Ongoing product costs Info

  • American Century ETF Trust 0.26%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 0.21%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
  • Weighted costs total (per year) 0.18%

With an overall Total Expense Ratio (TER) of 0.18%, the portfolio benefits from relatively low costs, which is commendable. Lower costs directly translate to higher net returns for investors, especially significant over the long term. This cost efficiency indicates a thoughtful selection of ETFs, balancing expense ratios with the potential for performance. Continuously monitoring and managing these costs remains essential to maximizing investment returns.

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.

The Efficient Frontier analysis suggests that the portfolio could achieve a more optimal risk-return profile. Currently positioned with an expected return of 7.10% at a risk level of 1.38%, there appears to be room for improvement. By adjusting asset allocations, potentially increasing diversification or revisiting the balance between growth and income-generating investments, the portfolio could enhance its efficiency. This optimization process is crucial for aligning the portfolio more closely with the investor's risk tolerance and return expectations.

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