Extremely concentrated growth focused portfolio with huge upside potential and equally large downside risks
Report created on Jun 6, 2024Risk profile
7/7
Diversification profile
1/5
Positions
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TS Tesla Inc
TSLA - US88160R1014 80.00% -
AA Apple Inc
AAPL - US0378331005 10.00% -
SP SPDR® Portfolio S&P 500 High Dividend ETF
SPYD - US78468R7888 10.00%
The portfolio is extremely concentrated: 80% in a single high‑growth stock, 10% in another mega‑cap stock, and 10% in a high‑dividend ETF. That means almost the entire outcome depends on one company’s fortunes. This matters because when one holding dominates, the portfolio can move like that stock, both up and down. Diversification is like having multiple engines on a plane; if one fails, the others keep you flying. Here, there’s basically one main engine. Anyone using a structure like this is essentially making a big, focused bet rather than running a broadly diversified investment mix.
Growth
Historically, the portfolio has been a rocket: a $1,000 investment grew to about $20,363, with a 35.27% compound annual growth rate (CAGR). CAGR is like the average yearly “speed” over the whole trip. This far outpaced both the US market and global market, which is a strong positive. The tradeoff is a huge maximum drawdown of -71.56%, meaning the portfolio at one point lost over 70% from a prior peak. That’s a gut‑check level of volatility. Past results show the potential reward of this concentrated bet, but they also highlight how emotionally and financially tough future downturns could be.
Asset classes
- Stocks 100%
All assets here are stocks, with 0% in bonds, cash, or other asset classes. That creates a pure equity profile, which is great for capturing long‑term growth but offers no built‑in stabilizers during market stress. Asset allocation is like setting the overall “risk dial”: adding bonds or cash usually lowers volatility but reduces expected returns. This all‑stock stance aligns with aggressive growth objectives and long horizons, but it can feel brutal in bear markets. Anyone using this style needs both financial capacity and emotional tolerance to ride through large swings without feeling forced to sell at the worst times.
Sectors
- Consumer Discretionary 81%
- Technology 10%
- Real Estate 2%
- Consumer Staples 2%
- Utilities 1%
- Financials 1%
- Energy 1%
- Telecommunications 1%
- Health Care 1%
Sector exposure is dominated by consumer discretionary at 81%, driven mostly by the single large holding, with 10% in technology and only tiny slivers in other areas. That’s far more concentrated than broad market indices, which spread more evenly across sectors. Sector concentration matters because economic cycles hit different parts of the market differently. A consumer‑heavy portfolio can be very sensitive to changes in consumer spending, interest rates, and sentiment. The small allocations to staples, utilities, and health care provide only light defensive ballast, so the portfolio is likely to move strongly with growth‑oriented, sentiment‑driven parts of the market.
Regions
- North America 100%
Geographically, everything is in North America, which is extremely simple and easy to understand. This aligns with many US‑focused investors and means the portfolio tracks US economic and policy conditions closely. However, it misses potential diversification from other regions that may be in different stages of their economic cycles or benefit from different trends. Geographic diversification can help when one economy slows while others do better. Sticking to a single region concentrates currency, political, and regulatory risk in that area, which can be fine if intentional but does mean the portfolio fully rides US fortunes for better or worse.
Market capitalization
- Mega-cap 90%
- Mid-cap 6%
- Small-cap 2%
- Large-cap 2%
The portfolio is heavily skewed to mega‑cap companies (90%), with only small slices in mid, small, and standard large caps. Market capitalization exposure affects how sensitive a portfolio is to different parts of the market: mega‑caps often move with broad indices and can be more stable than tiny companies, but they’re still very exposed to overall market sentiment. What’s unusual here is not the mega‑cap tilt itself, which is common, but that mega‑cap risk is concentrated in just two names. So while the size profile looks mature and established, idiosyncratic company‑specific risk remains very high.
True holdings
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AP APA Corporation 0.18%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
LY LyondellBasell Industries NV 0.17%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
EO EOG Resources Inc 0.16%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
VZ Verizon Communications Inc 0.16%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
DO Dow Inc 0.16%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
PS Phillips 66 0.15%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
CV Chevron Corp 0.15%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
-
T AT&T Inc 0.15%
Part of fund(s):- SPDR® Portfolio S&P 500 High Dividend ETF
- Top 10 total 91.29%
Looking through the ETF’s top holdings, most risk really is coming from the two single stocks. The ETF adds small exposures to names like APA, Verizon, Chevron, and AT&T, but each is well under 1% of the total portfolio. There’s no hidden overlap where Tesla or Apple quietly reappear through the ETF, which is good in the sense that risk concentration is fully visible. Still, the ETF’s positive contribution to diversification is modest because its slice is small. For someone wanting real diversification, a broader mix would usually need a larger weight than 10%.
Factors
Factor exposure shows very low value, very low quality, and very low low‑volatility tilts. Factors are like the underlying “flavors” of a portfolio that drive long‑term behavior. A very low value tilt means a strong bias toward higher‑valuation growth names rather than bargains. Very low quality suggests more exposure to companies with less stable earnings or weaker profitability metrics versus classic “steady eddies.” Very low low‑volatility means a clear preference for more turbulent stocks. Together, this points to a high‑octane growth profile that can shine in bull markets but may suffer outsized setbacks when investors rotate toward safer, cheaper, higher‑quality names.
Risk contribution
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Tesla Inc
Weight: 80.00% 95.7% -
Apple Inc
Weight: 10.00% 2.9% -
SPDR® Portfolio S&P 500 High Dividend ETF
Weight: 10.00% 1.4%
Risk contribution shows how much each holding adds to overall volatility, which can be very different from simple weights. Here, the 80% position contributes about 95.65% of total risk, meaning the portfolio’s ups and downs are overwhelmingly driven by one stock. That’s like having one instrument playing almost the entire soundtrack. The other holdings, though 20% of the weight, together add only about 4.35% of the risk. When a single position’s risk contribution far exceeds its weight, it signals concentrated risk. Adjusting position sizes is the main tool to bring risk contributions closer to what feels intentional.
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.
On the risk‑return chart, the current portfolio sits below the efficient frontier by about 1.31 percentage points at its risk level. The efficient frontier represents the best expected return for each risk level using just these holdings in different weights. The current Sharpe ratio of 0.83 is meaningfully lower than the optimal portfolio’s 1.02, meaning the same ingredients could be mixed more efficiently. The optimal mix has lower risk and lower return, but better risk‑adjusted performance. That suggests that simply rebalancing among these three positions—without adding anything new—could keep a strong growth profile while reducing volatility and improving the overall risk/reward tradeoff.
Dividends
- Apple Inc 0.40%
- SPDR® Portfolio S&P 500 High Dividend ETF 4.40%
- Weighted yield (per year) 0.48%
Dividend yield for the overall portfolio is very low at about 0.48%, despite the ETF itself having a healthy 4.40% yield. That happens because the high‑dividend ETF is only 10% of the portfolio, and the main holding doesn’t pay dividends. Dividends can provide a steady income stream and slightly cushion returns during flat or down markets, but here they are more of a side effect than a core feature. This setup is clearly geared toward price appreciation rather than cash flow. Income‑focused investors would generally need a much higher share of dividend‑oriented holdings to meet regular payout needs.
Ongoing product costs
- SPDR® Portfolio S&P 500 High Dividend ETF 0.07%
- Weighted costs total (per year) 0.01%
Costs are impressively low, with a total TER around 0.01%, mainly driven by the ETF’s modest 0.07% fee on just 10% of the portfolio. Keeping fees low is a quiet but powerful advantage because every dollar not spent on costs stays invested to compound over time. This cost profile is aligned with best practices for long‑term investing and supports better net performance versus comparable high‑fee setups. The key point is that here, risk and return characteristics are driven almost entirely by security choice and concentration, not by fees, which are already close to as efficient as they realistically get.
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