Growth-oriented portfolio with a strong focus on US equities and technology sector dominance

Report created on Jul 19, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards US equities, with a significant emphasis on the technology sector, evident from the 40% allocation to the Vanguard S&P 500 ETF and the 20% allocations each to the Invesco NASDAQ 100 ETF and Schwab U.S. Large-Cap Growth ETF. The Vanguard Total World Stock Index Fund ETF Shares, making up the remaining 20%, offers some global exposure, albeit limited. This composition suggests a growth-oriented strategy with a moderate level of diversification, primarily through large-cap and technology-driven assets.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 15.45% and a maximum drawdown of -28.78%, the portfolio has demonstrated robust growth with significant volatility. The days contributing to 90% of returns being concentrated in just 19 days highlight the portfolio's reliance on short-term gains, which is typical for growth-focused investments in sectors like technology. This performance pattern underscores the portfolio's higher risk and growth potential.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, projects a wide range of potential outcomes, from a 5th percentile growth of 111.2% to a 67th percentile at 824.5%. The high number of simulations with positive returns (999 out of 1,000) and an annualized return across all simulations of 16.61% indicate strong growth prospects. However, the reliance on historical data means these projections do not guarantee future performance and should be viewed as one of many tools in evaluating investment strategies.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no diversification into other asset classes like bonds or real estate. This allocation aligns with a growth investment strategy but increases the portfolio's overall risk. Diversifying across different asset classes can reduce volatility and provide a more stable return profile, especially during stock market downturns.

Sectors Info

  • Technology
    38%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Financials
    11%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral allocation reveals a heavy tilt towards technology (38%), followed by consumer cyclicals, communication services, and financial services. While this sector concentration has likely contributed to the portfolio's strong historical performance, it also increases susceptibility to sector-specific risks. Diversifying across a broader range of sectors could mitigate these risks and potentially smooth out returns over time.

Regions Info

  • North America
    92%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

Geographic exposure is predominantly North American (92%), with minimal allocations to developed Europe, Asia, and no exposure to emerging markets or Australasia. This concentration in North American markets, particularly the US, enhances exposure to US economic conditions and currency fluctuations, limiting global diversification benefits.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Small-cap
    2%

The portfolio's market capitalization breakdown shows a preference for mega (51%) and large-cap (31%) companies, with minimal exposure to medium, small, and micro-cap stocks. This bias towards larger companies is consistent with the portfolio's growth orientation but may limit opportunities for higher returns that smaller companies could offer.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation
  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation observed between the Invesco NASDAQ 100 ETF and Schwab U.S. Large-Cap Growth ETF, as well as between the Vanguard Total World Stock Index Fund ETF Shares and Vanguard S&P 500 ETF, suggests redundancy in the portfolio. These overlapping positions may not provide the intended diversification benefits, potentially increasing the portfolio's risk profile during market downturns.

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.

Before optimizing, the portfolio could benefit from addressing the high correlation among its holdings to improve diversification. Reducing overlap by reallocating from highly correlated assets to underrepresented sectors or geographies could enhance the risk-return profile. This approach aligns with principles of portfolio optimization, aiming for a more efficient frontier by maximizing returns for the given level of risk.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.00%

The dividend yields across the ETFs contribute to the portfolio's total yield of 1.00%, which can offer a steady income stream and potentially reduce volatility. However, the focus on growth equities typically results in lower dividend yields. Investors prioritizing income might consider diversifying into assets or sectors with higher dividend yields.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) of 0.06% is impressively low, which is beneficial for long-term growth as it minimizes the drag on returns caused by fees. Keeping costs low is crucial for enhancing net investment returns, especially in a growth-focused portfolio where compound growth plays a significant role.

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