High-risk high-reward technology-focused portfolio with speculative assets and limited diversification

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

Speculative Investors

This portfolio is best suited for an investor with a high risk tolerance, seeking speculative growth over a short to medium-term investment horizon. It's tailored for those comfortable with significant volatility and potential for large fluctuations in portfolio value. The investor likely prioritizes capital appreciation over income and is willing to accept the possibility of substantial losses in pursuit of high returns. This profile fits an individual who is financially secure outside of their investment portfolio and can afford to take on considerable risk.

Positions

  • Direxion Daily Technology Bull 3X Shares
    TECL - US25459W1027
    30.00%
  • Fidelity Wise Origin Bitcoin Trust
    FBTC - US3159481098
    25.00%
  • VanEck Semiconductor ETF
    SMH - US92189F6768
    25.00%
  • Fidelity® MSCI Information Technology Index ETF
    FTEC - US3160928087
    10.00%
  • Fidelity® Government Money Market Fund
    SPAXX - US31617H1023
    10.00%

This portfolio is predominantly invested in technology and speculative assets, with a significant portion allocated to leveraged ETFs and a Bitcoin trust. The composition is highly concentrated, with 90% of the portfolio dedicated to technology-related investments, including a 30% allocation to a leveraged technology ETF and a 25% stake in a Bitcoin trust. The remaining 10% is in a government money market fund, offering some liquidity and risk mitigation.

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

Growth Info

The portfolio's historical performance shows a remarkable Compound Annual Growth Rate (CAGR) of 46.10%, though it comes with a substantial maximum drawdown of -36.28%. This indicates a highly volatile investment path, where the portfolio has experienced significant fluctuations. The days contributing to 90% of returns being limited to just 10 suggests extreme returns were achieved on very few days, highlighting the speculative nature of the investments.

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

Projection Info

Monte Carlo simulations, projecting future performance based on historical data, suggest a wide range of outcomes with the median scenario indicating a 5,386.7% return. However, these simulations also show a significant risk of loss, as evidenced by the 5th percentile outcome at 177.2%. It's important to note that past performance and simulations do not guarantee future results, and such speculative investments can lead to substantial losses.

Asset classes Info

  • Stocks
    64%
  • Other
    30%
  • Unknown
    10%

The portfolio's asset allocation leans heavily towards stocks (64%) and "Other" (30%), presumably the Bitcoin trust, with a small portion in "Unknown" (10%). This mix underscores the speculative nature of the portfolio, with a heavy emphasis on technology stocks and cryptocurrency, offering high potential returns at the expense of higher risk and volatility.

Sectors Info

  • Technology
    40%
  • Unknown
    10%
  • Telecommunications
    0%
  • Industrials
    0%
  • Financials
    0%

The sectoral allocation is narrowly focused on technology (40%), with a significant portion of the portfolio's assets unclassified. This concentration in a single sector increases the portfolio's vulnerability to sector-specific risks, such as regulatory changes or technological shifts, which could significantly impact overall performance.

Regions Info

  • North America
    60%
  • Unknown
    10%
  • Asia Developed
    3%
  • Europe Developed
    2%
  • Latin America
    0%

Geographically, the portfolio is heavily skewed towards North America (60%), with minimal exposure to developed markets in Asia (3%) and Europe (2%). This concentration in a single region, while potentially capitalizing on the growth of the U.S. tech industry, limits geographic diversification and exposure to global growth opportunities.

Market capitalization Info

  • Mega-cap
    28%
  • Large-cap
    22%
  • Unknown
    10%
  • Mid-cap
    4%
  • Small-cap
    1%
  • Micro-cap
    0%

The market capitalization breakdown shows a preference for mega (28%) and big (22%) cap stocks, with a small allocation to medium (4%), small (1%), and micro (0%) caps. This indicates a focus on larger, more established companies, which may offer stability within the high-risk technology sector but limits exposure to potentially high-growth smaller companies.

Redundant positions Info

  • Direxion Daily Technology Bull 3X Shares
    Fidelity® MSCI Information Technology Index ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the leveraged technology ETF and the information technology index ETF. This redundancy limits the benefits of diversification, as these investments are likely to react similarly to market changes, increasing the portfolio's risk during downturns.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • VanEck Semiconductor ETF 0.40%
  • Fidelity® Government Money Market Fund 3.10%
  • Direxion Daily Technology Bull 3X Shares 0.50%
  • Weighted yield (per year) 0.60%

The dividend yield across the portfolio averages to 0.60%, with the highest yield coming from the government money market fund at 3.10%. While dividends contribute to the portfolio's returns, the focus on growth and speculative assets means that income generation is not a primary goal.

Ongoing product costs Info

  • Fidelity Wise Origin Bitcoin Trust 0.25%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • VanEck Semiconductor ETF 0.35%
  • Direxion Daily Technology Bull 3X Shares 0.94%
  • Weighted costs total (per year) 0.44%

The total expense ratio (TER) of the portfolio averages to 0.44%, with the highest costs associated with the leveraged ETF at 0.94%. While not excessively high, costs can erode returns over time, and the high costs of leveraged and speculative investments warrant careful consideration against their potential benefits.

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 portfolio's current configuration, while offering high potential returns, also carries significant risk, particularly due to the concentration in technology and speculative assets. Optimization could involve reducing overlap in highly correlated assets to enhance diversification without necessarily compromising on the speculative nature and high-return potential. Achieving an optimal balance between risk and return could result in a more efficient portfolio, potentially offering a 5.17% expected return at a lower risk level.

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