A concentrated portfolio with a strong focus on large-cap US equities and low diversification

Report created on Jul 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards large-cap US equities, with a significant concentration in Berkshire Hathaway Inc. and two major ETFs tracking the NASDAQ 100 and S&P 500 indices. This composition suggests a strategy focused on leveraging the performance of major US companies. However, the portfolio's diversification is low, with 80% of the assets concentrated in just two positions. Such concentration increases the portfolio's sensitivity to the performance of these specific investments and the sectors they represent.

Growth Info

Historical performance showcases a Compound Annual Growth Rate (CAGR) of 17.23%, which is impressive. However, the maximum drawdown of -26.12% indicates periods of significant volatility. The days contributing most to returns are relatively few, suggesting that the portfolio's performance is heavily reliant on specific, high-impact market movements. Comparing these figures to benchmarks would be crucial to understand relative performance, especially considering the portfolio's risk profile.

Projection Info

Monte Carlo simulations, with 1,000 iterations, predict a wide range of outcomes, from a 165.8% to a 1,097.7% increase in portfolio value at key percentiles. This suggests considerable uncertainty and potential for both high returns and significant volatility. While the average annualized return of 18.22% is attractive, it's important to remember that such projections are based on historical data and cannot guarantee future performance.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no presence of bonds, real estate, commodities, or other asset classes. This lack of diversification across asset classes can lead to higher volatility and risk, especially during market downturns when stocks tend to underperform. Diversifying across different asset classes can help mitigate risk and smooth out returns over time.

Sectors Info

  • Financials
    43%
  • Technology
    28%
  • Telecommunications
    8%
  • Consumer Discretionary
    8%
  • Health Care
    4%
  • Consumer Staples
    3%
  • Industrials
    3%
  • Utilities
    1%
  • Basic Materials
    1%
  • Energy
    1%
  • Real Estate
    1%

Sector allocation is heavily skewed towards Financial Services and Technology, making up 71% of the portfolio. This concentration can lead to increased volatility, as these sectors are particularly sensitive to economic cycles, interest rates, and technological disruptions. A more balanced sector allocation could reduce risk and improve the portfolio's resilience against market fluctuations.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

With 99% of assets allocated in North America, the portfolio's geographic diversification is minimal. This concentration in a single region increases exposure to country-specific economic, political, and regulatory risks. Expanding into developed European or Asian markets, or even emerging markets, could offer growth opportunities and risk mitigation through geographic diversification.

Market capitalization Info

  • Mega-cap
    71%
  • Large-cap
    20%
  • Mid-cap
    8%

The focus on mega and big-cap stocks (91% combined) aligns with the portfolio's conservative risk profile, as these companies tend to be more stable and less volatile than smaller caps. However, this concentration also limits potential high-growth opportunities from medium and small-cap stocks, which could offer higher returns albeit with increased risk.

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.

Click on the colored dots to explore allocations.

The current portfolio's expected return is slightly below the optimal portfolio's return of 18.19% at a similar risk level. This suggests there's room for improvement in allocation to achieve a more efficient risk-return balance. Adjusting the asset mix could enhance returns without necessarily increasing the portfolio's overall risk profile.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.44%

The dividend yield, while modest, contributes to the portfolio's total return. Given the focus on growth stocks, particularly in the technology sector, the lower yield is understandable. However, incorporating higher-dividend-yielding assets could provide a more balanced income-growth strategy, especially for investors seeking regular income alongside capital appreciation.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.07%

The portfolio benefits from relatively low costs, with a total expense ratio (TER) of 0.07%. This is advantageous for long-term growth, as lower costs directly translate to higher net returns. Keeping costs low is a fundamental principle of successful investing, particularly in a low-diversification strategy where the impact of costs can be more pronounced.

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