High-growth portfolio with a focus on leveraged ETFs and alternative assets

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 is best suited for an investor with a high risk tolerance and a focus on aggressive growth. The ideal investor is likely comfortable with significant market fluctuations and has a long-term investment horizon that allows them to weather periods of volatility. The heavy allocation to leveraged ETFs and alternative assets like gold and managed futures suggests that this investor is not only seeking substantial returns but is also willing to accept the possibility of substantial losses in pursuit of those gains.

Positions

  • Direxion Daily S&P500® Bull 3X Shares
    SPXL - US25459W8626
    30.00%
  • iMGP DBi Managed Futures Strategy ETF
    DBMF - US53700T8273
    20.00%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares
    EDV - US9219107094
    20.00%
  • iShares® Gold Trust Micro
    IAUM - US46436F1030
    20.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    6.00%
  • Avantis® International Small Cap Value ETF
    AVDV - US0250728021
    4.00%

This portfolio is heavily weighted towards leveraged ETFs, managed futures, and precious metals, with a significant portion in extended duration treasuries. The Direxion Daily S&P500® Bull 3X Shares, constituting 30% of the portfolio, indicates a strong inclination towards aggressive growth strategies, leveraging daily market movements to amplify returns. The inclusion of managed futures and gold ETFs suggests a hedge against market volatility and inflation, respectively. However, the portfolio's single-focused diversification classification points to a high concentration risk, especially given the volatile nature of leveraged ETFs.

Growth Info

The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 14.09%, is impressive, though the maximum drawdown of -27.88% underscores the high-risk nature of the investments. The fact that 90% of returns came from just 17 days highlights the portfolio's reliance on significant, short-term market movements for gains. This volatility is typical of leveraged and alternative investment strategies, which can offer high returns but also pose substantial risks.

Projection Info

Monte Carlo simulations, running 1,000 scenarios, project a wide range of outcomes, from a 5th percentile loss of -42.9% to a 67th percentile gain of 453.2%. This broad spread underscores the high uncertainty and risk associated with the portfolio's assets. While the majority of simulations result in positive returns, the potential for significant losses is notable. Monte Carlo analysis helps in understanding possible future scenarios but cannot predict specific outcomes due to its reliance on historical data.

Asset classes Info

  • Stocks
    44%
  • Bonds
    29%
  • Cash
    4%
  • Other
    2%

The portfolio's asset allocation includes stocks, bonds, cash, and other assets like commodities, with stocks (including leveraged ETFs) and bonds forming the core. This mix aligns with a growth-focused strategy, but the specific choices within these categories—particularly the high stake in leveraged ETFs and gold—introduce specific risks and potential for volatility. The presence of cash and bonds offers some balance, though the heavy reliance on high-risk assets limits the effectiveness of this diversification.

Sectors Info

  • Technology
    11%
  • Financials
    6%
  • Consumer Discretionary
    5%
  • Industrials
    4%
  • Telecommunications
    4%
  • Health Care
    3%
  • Energy
    2%
  • Consumer Staples
    2%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation shows a spread across technology, financial services, and consumer cyclicals, among others. The technology sector, often associated with high growth and volatility, is the largest allocation. This sectoral spread is generally positive for diversification, but the portfolio's overall risk is more significantly influenced by its choice of asset types (e.g., leveraged ETFs) than sector diversification.

Regions Info

  • North America
    36%
  • Europe Developed
    2%
  • Japan
    1%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Asia Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Europe Emerging
    0%

Geographic exposure is predominantly North American, with minimal allocations to developed Europe and Japan, and no exposure to emerging markets or other regions. This concentration in North American assets, particularly the U.S., aligns with the portfolio's growth orientation but limits geographic diversification, potentially increasing susceptibility to regional economic downturns.

Market capitalization Info

  • Mega-cap
    16%
  • Large-cap
    12%
  • Mid-cap
    8%
  • Small-cap
    4%
  • Micro-cap
    3%

The market capitalization breakdown shows a focus on mega and big cap stocks, likely driven by the leveraged S&P 500 ETF. Smaller allocations to medium, small, and micro caps, particularly through the Avantis ETFs, provide some diversification. However, the portfolio's overall risk profile is more significantly impacted by its leveraged and alternative investments than by its market cap distribution.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • iMGP DBi Managed Futures Strategy ETF 4.60%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 4.80%
  • Direxion Daily S&P500® Bull 3X Shares 0.70%
  • Weighted yield (per year) 2.32%

The portfolio's dividend yield, averaging 2.32%, contributes to its total return. While not the primary focus of a growth-oriented strategy, dividends from the treasury and small cap value ETFs provide a steady income stream, which can be particularly valuable during market downturns or periods of lower capital gains. However, the low yield from the leveraged ETF reflects its primary goal of capital appreciation rather than income.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iMGP DBi Managed Futures Strategy ETF 0.85%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 0.06%
  • iShares® Gold Trust Micro 0.09%
  • Direxion Daily S&P500® Bull 3X Shares 0.91%
  • Weighted costs total (per year) 0.50%

Portfolio costs, with a Total Expense Ratio (TER) averaging 0.50%, are relatively moderate given the inclusion of specialized ETFs like leveraged and managed futures funds. While costs are an important consideration, the potential for high returns from these investments may justify the expenses. However, investors should remain mindful of how fees impact long-term growth, especially in more speculative assets where returns can be highly variable.

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 composition, optimizing for the Efficient Frontier could involve reassessing the allocation towards leveraged ETFs and potentially increasing diversification across asset classes and geography. While the portfolio aims for high growth, balancing risk and return more effectively could enhance long-term performance. This optimization process focuses on achieving the best possible risk-return ratio given the existing assets, suggesting that some rebalancing towards less volatile investments might be beneficial.

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