Growth-focused portfolio with heavy tech exposure and low diversification

Report created on Aug 20, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio predominantly invests in U.S. large-cap growth and technology sectors, evidenced by significant allocations to ETFs like the Schwab U.S. Large-Cap Growth ETF and the Vanguard Information Technology Index Fund ETF Shares. With 100% of its assets in stocks and a notable concentration in the technology sector, it shows a clear bias towards growth-oriented investments. The low diversification score and the singular focus on stocks underscore a strategy that prioritizes potential high returns from specific sectors over a balanced risk distribution.

Growth Info

Historically, this portfolio has delivered a compelling Compound Annual Growth Rate (CAGR) of 18.78%. This high performance is reflective of the robust growth in the technology sector over recent years. However, the maximum drawdown of -33.24% highlights the risk associated with such a concentrated strategy. The days contributing to 90% of returns being limited to 20 indicates a high volatility, where a few days' movements significantly impact overall performance.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, this portfolio shows a wide range of potential outcomes. The median projection suggests a significant increase in value, but it's crucial to remember that these simulations rely on past trends, which may not always predict future movements accurately. This method helps in understanding potential volatility and risk but does not guarantee future returns.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks, without any allocation to bonds, cash, or other asset classes, maximizes exposure to market growth while also increasing susceptibility to market downturns. This approach is suitable for investors with a high-risk tolerance and a long-term investment horizon, as it lacks the buffer against volatility that diversified asset classes provide.

Sectors Info

  • Technology
    47%
  • Telecommunications
    11%
  • Consumer Discretionary
    10%
  • Financials
    7%
  • Health Care
    5%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Basic Materials
    1%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%

With nearly half of the portfolio invested in technology and significant allocations to communication services and consumer cyclicals, the portfolio is heavily reliant on sectors that are known for their volatility but also for their growth potential. This sectoral concentration enhances the portfolio's growth prospects but also increases its risk, especially during market downturns or sector-specific setbacks.

Regions Info

  • North America
    98%
  • Asia Developed
    1%
  • Europe Developed
    1%

The geographic allocation is overwhelmingly focused on North America, with minimal exposure to developed markets in Asia and Europe, and no presence in emerging markets. This geographic concentration in the U.S. market limits global diversification benefits and increases the portfolio's vulnerability to regional economic fluctuations.

Market capitalization Info

  • Mega-cap
    58%
  • Large-cap
    28%
  • Mid-cap
    12%
  • Small-cap
    2%

A focus on mega and big-cap companies, which constitute 86% of the portfolio, aligns with the portfolio's growth and stability objectives, as these companies are typically more established and less volatile than their smaller counterparts. However, this also means potentially missing out on the high growth opportunities that smaller companies can offer.

Redundant positions Info

  • Fidelity Select Semiconductors Portfolio
    VanEck Semiconductor ETF
    High correlation
  • Schwab U.S. Large-Cap Growth ETF
    Fidelity® MSCI Information Technology Index ETF
    Vanguard Information Technology Index Fund ETF Shares
    Invesco NASDAQ 100 ETF
    High correlation

The high correlation among the portfolio's largest holdings, particularly within the technology sector, indicates a redundancy that does not contribute to diversification. This overlap, especially between ETFs and funds targeting similar sectors and market caps, suggests that the portfolio could benefit from a reassessment of its holdings to eliminate redundancies and enhance diversification.

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 analysis suggests that the portfolio could achieve a more efficient risk-return profile by addressing its high correlation among assets and lack of diversification. By diversifying across more sectors, asset classes, and geographies, the portfolio could potentially reduce volatility without significantly sacrificing returns. The current optimization analysis indicates an opportunity to enhance returns to 21.34% with a similar risk level, suggesting that strategic adjustments could yield better outcomes.

Dividends Info

  • Fidelity Select Semiconductors Portfolio 7.30%
  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • VanEck Semiconductor ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.54%

The overall dividend yield of the portfolio is relatively low, which is typical for growth-focused investments that prioritize reinvestment over dividend distribution. This strategy aligns with the portfolio's growth objectives but means income-seeking investors might find it less attractive.

Ongoing product costs Info

  • Fidelity Select Semiconductors Portfolio 0.62%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is impressively low at 0.10%, which is beneficial for long-term growth as lower costs translate directly into higher net returns. This cost efficiency is a strong aspect of the portfolio, helping to maximize the investor's returns on their growth-focused investments.

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