Tech-focused growth portfolio with high exposure to large-cap US stocks and low diversification
Report created on Jul 30, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 50.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 40.00% -
VU Vanguard Growth Index Fund ETF Shares
VUG - US9229087369 10.00%
Your portfolio is heavily concentrated in the technology sector, with a significant weighting towards large-cap US equities. This is evident from the 50% allocation to a technology ETF, 40% to an S&P 500 ETF, and 10% to a growth ETF. The overlap among these ETFs, particularly with the technology and growth-oriented positions, creates a portfolio with a strong bias towards growth stocks, primarily in the technology sector. This concentration increases the portfolio's exposure to sector-specific risks.
Growth
Historically, your portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 18.95%. However, it's important to note that past performance is not indicative of future results. The high returns are accompanied by significant volatility, as indicated by the maximum drawdown of -32.52%. This suggests that while the portfolio has the potential for high rewards, it also bears considerable risk, especially in market downturns.
Projection
Monte Carlo simulations project a wide range of outcomes for your portfolio, with the 50th percentile suggesting an 8.28-fold increase. While these projections are based on historical data and statistical methods, they are not guarantees of future performance. The high degree of variability in the simulation outcomes underscores the portfolio's risk profile and the importance of understanding the potential for both significant growth and substantial losses.
Asset classes
- Stocks 100%
Your portfolio is entirely allocated to stocks, with no exposure to other asset classes such as bonds or real estate. This allocation supports a growth-focused investment strategy but lacks diversification across asset classes, which can mitigate risk. Incorporating different asset classes could provide a buffer against stock market volatility and reduce overall portfolio risk.
Sectors
- Technology 68%
- Financials 6%
- Consumer Discretionary 6%
- Telecommunications 6%
- Health Care 4%
- Industrials 4%
- Consumer Staples 3%
- Energy 1%
- Real Estate 1%
- Utilities 1%
- Basic Materials 1%
The sector allocation heavily favors technology, which comprises 68% of the portfolio. While the tech sector has historically provided substantial returns, this concentration heightens the portfolio's sensitivity to sector-specific risks. A more balanced sector allocation could reduce volatility and improve the portfolio's resilience to market fluctuations.
Regions
- North America 99%
Geographically, your portfolio is almost exclusively invested in North American equities, with no exposure to developed or emerging markets outside of this region. This geographic concentration limits diversification benefits and increases exposure to region-specific economic and political risks. Expanding into international markets could provide additional growth opportunities and reduce risk.
Market capitalization
- Mega-cap 51%
- Large-cap 29%
- Mid-cap 14%
- Small-cap 4%
- Micro-cap 2%
The portfolio's market capitalization breakdown shows a strong preference for mega and large-cap stocks. While these companies tend to be more stable and less volatile than their smaller counterparts, the portfolio may miss out on the higher growth potential often associated with small and micro-cap stocks. Consider diversifying across different market caps to capture growth across the spectrum.
Redundant positions
-
High correlationVanguard S&P 500 ETFVanguard Information Technology Index Fund ETF SharesVanguard Growth Index Fund ETF Shares
The high correlation among the ETFs in your portfolio indicates overlapping holdings that contribute to a lack of diversification. This redundancy can amplify risks during market downturns, as correlated assets are likely to decline simultaneously. Reducing overlap by choosing investments with lower correlations could enhance diversification and reduce portfolio volatility.
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.
Optimizing your portfolio involves addressing the high correlation among its assets to enhance diversification. By diversifying across different sectors, asset classes, and geographies, you can improve the risk-return profile of your portfolio. Consider reallocating some of your technology and growth-focused investments into areas with lower correlation to reduce risk without necessarily compromising growth potential.
Dividends
- Vanguard Information Technology Index Fund ETF Shares 0.50%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Growth Index Fund ETF Shares 0.40%
- Weighted yield (per year) 0.77%
Your portfolio's dividend yield is relatively low, which is consistent with its growth orientation. While dividends can provide a steady income stream and contribute to total returns, the focus here is clearly on capital appreciation. Depending on your income needs and investment horizon, you might consider incorporating higher-dividend-yielding assets for balance.
Ongoing product costs
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Growth Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.07%
The total expense ratio (TER) of your portfolio is impressively low at 0.07%, which is beneficial for long-term growth as lower costs translate to higher net returns. This cost efficiency is a strong aspect of your portfolio, helping to maximize the compounding of your investments over time.
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