Balanced yet tech-heavy portfolio with a strong focus on global equities and low 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
Balanced Investors
This portfolio is best suited for an investor with a medium to high risk tolerance, looking for growth over a long-term investment horizon. The heavy allocation to equities, particularly in the technology sector, suggests that the investor should be comfortable with significant market fluctuations and the potential for high returns. Ideal for those who prioritize capital appreciation over income generation and are less concerned with short-term market dips.
Positions
-
Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 75.00% -
Invesco NASDAQ 100 ETF
QQQM - US46138G6492 25.00%
The portfolio is heavily weighted towards equities, with a 75% allocation in the Vanguard Total World Stock Index Fund ETF Shares and 25% in the Invesco NASDAQ 100 ETF. This structure suggests a strong emphasis on global stock markets, particularly with a tech-oriented slant given the NASDAQ's composition. The concentration in these two ETFs, however, points to low diversification, as it limits exposure across different asset classes and sectors beyond those heavily represented in the chosen funds.
Growth
Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 13.86%, with a maximum drawdown of -28.32%. These figures indicate a robust growth potential but also highlight a significant risk of loss in value. The days contributing most to returns are relatively few, suggesting that the portfolio's performance is significantly impacted by short-term market movements. This historical performance, while impressive, underscores the portfolio's volatility and the investor's need for a medium to high-risk tolerance.
Projection
Monte Carlo simulations, using 1,000 iterations, suggest a wide range of potential future outcomes for this portfolio. The 50th percentile outcome indicates a 561.8% increase, while the 5th and 67th percentiles show 100.1% and 822.4% increases, respectively. These projections, while optimistic, should be approached with caution as they rely on historical data, which is not a guaranteed predictor of future performance. The high percentage of simulations with positive returns (996 out of 1,000) does, however, provide some confidence in the potential for future growth.
Asset classes
- Stocks 99%
- Cash 1%
- Other 0%
- No data 0%
The portfolio's allocation is almost entirely in stocks (99%), with a minimal cash holding (1%). This asset class composition supports high growth potential but also increases risk, particularly in volatile market conditions. The lack of diversification across different asset classes, such as bonds or real estate, means the portfolio is more susceptible to stock market fluctuations.
Sectors
- Technology 33%
- Financials 13%
- Consumer Discretionary 11%
- Telecommunications 10%
- Industrials 9%
- Health Care 8%
- Consumer Staples 5%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
- Real Estate 2%
With a third of the portfolio in technology, followed by financial services and consumer cyclicals, there's a clear tilt towards sectors that can offer high growth but also come with higher volatility. This sector allocation aligns with the portfolio's growth-oriented strategy but may benefit from a broader sectoral distribution to mitigate sector-specific risks.
Regions
- North America 24%
- Europe Developed 0%
- Latin America 0%
- Asia Emerging 0%
Geographic exposure is predominantly North American (24%), with no direct allocation to Europe, Latin America, or Asia. This geographic concentration may limit the portfolio's exposure to potential growth in other regions and increases its vulnerability to regional economic fluctuations in North America.
Market capitalization
- Mega-cap 46%
- Large-cap 31%
- Mid-cap 17%
- Small-cap 4%
- Micro-cap 1%
The portfolio's market capitalization breakdown—46% mega, 31% big, 17% medium, 4% small, and 1% micro—indicates a conservative approach, favoring large, established companies. This can offer stability but may limit exposure to the higher growth potential of smaller companies.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard Total World Stock Index Fund ETF Shares 1.70%
- Weighted yield (per year) 1.40%
The dividend yield from the two ETFs averages out to 1.40%, which contributes to the portfolio's total return. While not the primary focus of this growth-oriented portfolio, dividends provide a source of income and can offer a cushion during market dips.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.09%
The portfolio benefits from relatively low costs, with a total expense ratio (TER) of 0.09%. This efficient cost structure supports better long-term performance by minimizing the drag on returns due to fees. Keeping costs low is crucial for maximizing investment growth, especially in a portfolio focused on long-term appreciation.
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 Efficient Frontier, there may be room to optimize the portfolio for a better risk-return ratio by diversifying across more asset classes and sectors. While the current allocation has demonstrated strong growth potential, strategic adjustments could potentially enhance returns while managing volatility more effectively.
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