A growth-focused portfolio with strong emphasis on momentum and quality across major markets

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 suits an investor seeking balanced growth with a moderate to high risk tolerance and a long-term investment horizon. It prioritizes potential high returns through exposure to growth-oriented sectors and geographies, making it ideal for individuals looking to capitalize on market momentum and quality factors. This investor is likely comfortable with market fluctuations and has the patience to ride out periods of volatility in pursuit of superior long-term growth.

Positions

  • Invesco S&P International Developed Momentum ETF
    IDMO - US46138E2220
    34.00%
  • Invesco S&P 500® Quality ETF
    SPHQ - US46137V2410
    33.00%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    33.00%

This portfolio is heavily concentrated in three ETFs, each targeting different aspects of the market: international developed momentum, S&P 500 quality, and S&P 500 momentum. The allocation is almost evenly split among these ETFs, providing a blend of exposure to both U.S. and international developed markets. This composition underscores a strategy focused on capturing growth through momentum and quality factors, which are known to outperform in certain market conditions. However, the concentration in just three ETFs, despite their broad market coverage, introduces specific risks related to the performance of these investment styles.

Growth Info

The portfolio has shown a remarkable Compound Annual Growth Rate (CAGR) of 21.62%, with a maximum drawdown of -31.21%. This performance suggests a high growth potential but comes with significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 31.0 days highlight the momentum-driven nature of the portfolio, where a few key periods can dramatically impact overall performance. This historical performance, while impressive, should be viewed with caution as past success is not a guaranteed indicator of future results.

Projection Info

Using Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a substantial growth potential, but the broad spread between the 5th and 67th percentiles indicates high uncertainty. This variance underscores the portfolio's risk profile, suggesting that while high returns are possible, they come with considerable risk. Investors should understand that these projections are hypothetical and actual future performance can vary widely from these simulations.

Asset classes Info

  • Stocks
    100%
  • Other
    0%
  • Cash
    0%

The portfolio is entirely composed of stocks, which aligns with its growth-oriented risk profile. While this asset class has historically offered higher returns compared to bonds or cash, it also comes with increased volatility. The absence of other asset classes like bonds or real estate means the portfolio might be more susceptible to market downturns. Diversifying across different asset classes can help mitigate risk and smooth out returns over time, especially during periods of stock market volatility.

Sectors Info

  • Financials
    27%
  • Technology
    19%
  • Industrials
    17%
  • Consumer Staples
    11%
  • Consumer Discretionary
    9%
  • Telecommunications
    7%
  • Health Care
    4%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The sector allocation shows a heavy emphasis on financial services, technology, and industrials, which are sectors often associated with growth and momentum investing. However, the relatively low allocation to defensive sectors like healthcare and utilities may leave the portfolio more exposed during market downturns. While the current sector allocation is in line with the portfolio's growth objectives, diversifying more into defensive sectors could provide a buffer against market volatility.

Regions Info

  • North America
    73%
  • Europe Developed
    19%
  • Japan
    3%
  • Australasia
    3%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Asia Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America, with significant exposure to developed European markets and a minimal presence in Japan, Australasia, and developed Asia. The lack of exposure to emerging markets could be a missed opportunity for diversification and growth, as these regions often offer higher growth potential. Considering the portfolio's growth orientation, selectively increasing exposure to high-quality emerging market assets could enhance returns and diversification.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    39%
  • Mid-cap
    14%
  • Small-cap
    0%

The focus on mega and big-cap stocks is consistent with the portfolio's emphasis on quality and momentum, as these companies often have more stable earnings and stronger growth prospects. However, the negligible exposure to small-cap stocks means the portfolio may miss out on the higher growth potential these companies can offer. While small-cap stocks come with higher risk, including a measured allocation could enhance the portfolio's growth potential and diversification.

Dividends Info

  • Invesco S&P International Developed Momentum ETF 1.90%
  • Invesco S&P 500® Quality ETF 1.00%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 1.17%

The dividend yields from the ETFs contribute to the portfolio's total income, with a combined yield of 1.17%. While dividends are not the primary focus of this growth-oriented portfolio, they provide a source of passive income and can offer some cushion during market downturns. Investors might consider the role of dividends in their overall investment strategy, balancing the pursuit of growth with the potential for income generation.

Ongoing product costs Info

  • Invesco S&P International Developed Momentum ETF 0.25%
  • Invesco S&P 500® Quality ETF 0.15%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.18%

The portfolio benefits from relatively low total expense ratios (TER) for its ETFs, averaging 0.18%. Keeping investment costs low is crucial for enhancing long-term returns, as high fees can significantly erode earnings over time. The portfolio's cost efficiency is a positive aspect, allowing more of the investment returns to contribute to portfolio growth rather than being consumed by 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.

Considering the portfolio's current allocation and its focus on growth through momentum and quality, there's potential for optimization towards achieving the best possible risk-return ratio, as suggested by the Efficient Frontier. This may involve re-evaluating the balance between the ETFs, possibly incorporating assets with lower correlation to enhance diversification without significantly compromising the growth objective. Optimization should aim to maintain the portfolio's growth trajectory while managing risk more effectively.

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