A growth-focused portfolio with a strategic blend of US and international ETFs

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 capital appreciation through a diversified mix of US and international equities, making it ideal for individuals looking to build wealth over time while being comfortable with the fluctuations inherent in stock markets.

Positions

  • Invesco RAFI Strategic US ETF
    IUS - US46138J7422
    40.00%
  • Franklin International Core Dividend Tilt Index ETF
    DIVI - US35473P1084
    30.00%
  • American Century U.S. Quality Growth ETF
    QGRO - US0250723071
    20.00%
  • Avantis® International Small Cap Value ETF
    AVDV - US0250728021
    10.00%

The portfolio's composition is strategically divided among four ETFs, emphasizing a growth profile with a significant tilt towards the US market. The Invesco RAFI Strategic US ETF forms the core at 40%, followed by the Franklin International Core Dividend Tilt Index ETF at 30%, showcasing a balance between domestic and international equities. The American Century U.S. Quality Growth ETF and Avantis® International Small Cap Value ETF complement this mix, adding layers of quality growth and value perspectives, respectively. This allocation strategy underscores a deliberate approach to capturing growth across different geographies and market segments.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 15.44% and a maximum drawdown of -32.02%, the portfolio demonstrates robust growth potential tempered by significant volatility. The days contributing to 90% of returns being concentrated in just 21.0 days highlight the portfolio's reliance on short-term, significant gains. This historical performance, while impressive, underscores the inherent risks and the need for investors to have a tolerance for occasional sharp downturns in pursuit of long-term growth.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes, with the median simulation suggesting a 568.4% return. However, it's crucial to note that while these simulations can provide insight, they're based on past performance, which is not a reliable indicator of future results. The high percentage of simulations with positive returns (992 out of 1,000) does suggest a strong likelihood of future gains, but investors should remain mindful of the inherent uncertainties in market movements.

Asset classes Info

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

The portfolio is entirely allocated to stocks, indicating a high-growth, high-risk strategy. This focus on equities is appropriate for a growth-oriented portfolio but lacks the risk mitigation benefits that bonds or other asset classes might provide. While this aligns with the portfolio's growth profile, investors should consider whether incorporating other asset classes could offer beneficial diversification and risk management.

Sectors Info

  • Technology
    18%
  • Financials
    14%
  • Industrials
    13%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Consumer Staples
    7%
  • Energy
    6%
  • Basic Materials
    5%
  • Utilities
    2%
  • Real Estate
    1%

The sectoral allocation is well-diversified, covering technology, financial services, industrials, healthcare, and consumer cyclicals as the top sectors. This diversification across sectors can help mitigate sector-specific risks and capitalize on growth opportunities in different areas of the economy. However, the technology sector's prominence does introduce a degree of volatility that investors should be aware of, particularly in market downturns.

Regions Info

  • North America
    61%
  • Europe Developed
    22%
  • Japan
    11%
  • Australasia
    4%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Europe Emerging
    0%
  • Latin America
    0%
  • Asia Emerging
    0%

Geographic allocation is heavily weighted towards North America at 61%, with significant exposures to Europe Developed and Japan. This distribution reflects a balance between the stability of developed markets and the growth potential of international diversification. However, the absence of emerging markets may limit exposure to high-growth regions, potentially impacting the portfolio's overall growth trajectory.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    31%
  • Mid-cap
    24%
  • Small-cap
    10%
  • Micro-cap
    1%

The market capitalization breakdown shows a balanced exposure across mega, big, and medium-cap stocks, with a smaller allocation to small and micro-caps. This blend suggests a moderate risk profile, balancing the stability of large-cap companies with the growth potential of smaller firms. However, the portfolio might benefit from a slight adjustment to include more small and micro-cap exposure, enhancing its growth potential.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.60%
  • Franklin International Core Dividend Tilt Index ETF 3.60%
  • Invesco RAFI Strategic US ETF 1.50%
  • American Century U.S. Quality Growth ETF 0.20%
  • Weighted yield (per year) 2.08%

The portfolio's average dividend yield of 2.08% contributes to its total return, blending growth and income. The varying yields across the ETFs—from the higher dividends of the Avantis® International Small Cap Value ETF and Franklin International Core Dividend Tilt Index ETF to the lower yield of the American Century U.S. Quality Growth ETF—indicate a strategic approach to income generation. While not the primary focus, dividends offer a secondary benefit of regular income, which can be particularly valuable during market volatility.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Franklin International Core Dividend Tilt Index ETF 0.09%
  • Invesco RAFI Strategic US ETF 0.19%
  • American Century U.S. Quality Growth ETF 0.29%
  • Weighted costs total (per year) 0.20%

With an average portfolio cost (Total Expense Ratio, TER) of 0.20%, the portfolio is efficiently managed, ensuring that fees do not significantly erode returns. This low-cost approach is commendable, as it aligns with best practices for maximizing long-term investment growth. Investors should continue to monitor costs, as even small increases can have a substantial impact over time.

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 Efficient Frontier analysis suggests that the current portfolio is near-optimal in terms of the risk-return trade-off. While there's always room for improvement, any adjustments should be made with careful consideration of how they might shift the portfolio along the frontier. Fine-tuning the allocation could potentially yield a better risk-adjusted return, but it's important to remember that such optimizations are based on historical data and assumptions about future performance.

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