A growth-focused portfolio with a strong emphasis on technology and global equities

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 with a growth-oriented profile, comfortable with higher levels of risk for the potential of substantial returns. It's tailored for those with a longer investment horizon, allowing time to recover from market volatility. The emphasis on technology and large-cap stocks aligns with an investor seeking to capitalize on established, high-growth sectors. This approach is best suited for individuals who are less concerned with short-term fluctuations and more focused on achieving significant growth over time.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    55.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%
  • Invesco QQQ Trust
    QQQ - US46090E1038
    15.00%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    10.00%

The portfolio is heavily weighted towards equities, with a 55% allocation in a broad U.S. stock market ETF, 20% in international stocks, 15% in a tech-focused ETF, and 10% in an S&P 500 momentum ETF. This composition reflects a clear growth orientation, leveraging the potential of the global stock market while maintaining a significant emphasis on technology and momentum within the U.S. market. The predominance of ETFs suggests a preference for diversified, low-cost investment vehicles, aligning with best practices for long-term growth strategies.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 17.26%, with a maximum drawdown of -32.96%. These figures indicate a strong performance, albeit with significant volatility, as evidenced by the steep drawdown. The days contributing most to returns are relatively few, highlighting the impact of short-term gains on overall performance. This performance should be balanced against the risk profile and investment horizon, considering the potential for similar volatility in the future.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median increase of 952.5% in portfolio value. This suggests a high potential for growth, underscored by the fact that nearly all simulations result in positive returns. However, it's crucial to remember that such projections are based on historical data and assumptions that may not fully account for future market conditions. Investors should view these results as one of many tools in decision-making, not as guarantees.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash reserve (1%). This allocation supports the portfolio's growth objectives but also exposes it to market volatility. Diversification across different asset classes, such as bonds or real estate, could provide a buffer against stock market downturns, potentially smoothing out returns over time.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Telecommunications
    10%
  • Industrials
    10%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

With technology (30%) and financial services (14%) as the leading sectors, the portfolio is positioned to capitalize on growth trends but may also face higher volatility, especially in tech. The broad sectoral coverage, including consumer cyclicals and industrials, suggests an attempt at diversification within the equity component. However, the heavy tech weighting could amplify risk during market corrections or sector-specific downturns.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

The geographic allocation is heavily North American-centric (81%), with modest exposure to developed Europe (8%) and emerging Asian markets (3%). This distribution leverages the stability and growth potential of the U.S. market but may underutilize opportunities in emerging markets and other developed regions. Expanding international exposure could enhance diversification and potentially tap into higher growth rates abroad.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    31%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The focus on mega (45%) and big-cap (31%) stocks underscores the portfolio's preference for established, large-scale companies, likely contributing to its historical growth. While this bias towards larger companies may reduce exposure to the volatility of smaller firms, it also limits potential high-growth opportunities in the small and micro-cap sectors, which could offer diversification benefits and outsized returns over the long term.

Dividends Info

  • Invesco QQQ Trust 0.50%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.36%

The dividend yields across the ETFs contribute to the portfolio's total yield of 1.36%, adding a component of income to the growth-focused strategy. While the yields vary, the overall income generation complements capital appreciation, providing a dual return mechanism. For investors seeking both growth and income, maintaining or slightly increasing exposure to higher-yielding assets could be beneficial.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) of 0.07% is impressively low, maximizing the potential for net returns. This efficiency is crucial for long-term growth, as even small differences in costs can significantly impact compounded returns. The choice of low-cost ETFs reflects a strategic approach to cost management, aligning with best practices for portfolio construction.

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, the current portfolio may not be fully optimized for the best risk-return ratio. While the growth orientation and sectoral choices align with the investor's objectives, there's potential to enhance diversification and reduce volatility without significantly compromising returns. Adjusting allocations among existing assets or introducing new, less correlated investments could move the portfolio closer to the Efficient Frontier, optimizing its performance.

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