Balanced portfolio with a strong focus on technology and a strategic gold hedge
Report created on Sep 3, 2025Risk profile
4/7
Diversification profile
2/5
Positions
-
VT Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 50.00% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 40.00% -
ZK ZKB Gold ETF
ZKBGF 10.00%
This portfolio is heavily weighted towards equities, with a 50% allocation in a global stock ETF and a 40% allocation in a tech-centric ETF, complemented by a 10% investment in a gold ETF. Such a composition suggests a growth-oriented strategy with a tech emphasis, though it's marked by low diversity across asset classes and sectors. The significant tilt towards technology, while potentially lucrative, introduces sector-specific risk, and the inclusion of gold indicates a hedge against market volatility.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 14.35%, with a maximum drawdown of -28.60%. These figures suggest a robust performance, albeit with periods of significant volatility. The reliance on a few high-performing days for returns highlights the portfolio's susceptibility to market swings. Benchmarking this performance against a diversified index could provide further insight into its risk-adjusted returns.
Projection
Monte Carlo simulations, using historical data to project future outcomes, suggest a wide range of potential portfolio values, with a median increase of 519.8%. While encouraging, it's crucial to remember these projections are based on past trends, which may not predict future results accurately. This method helps visualize potential outcomes but should be one of many tools in decision-making.
Asset classes
- Stocks 89%
- Cash 1%
The portfolio's asset allocation leans heavily on stocks (89%), with minimal cash holdings and no significant investments in other asset classes. This concentration enhances growth potential but also increases risk, particularly in market downturns. Diversifying across more asset classes could provide a buffer against volatility without drastically compromising growth prospects.
Sectors
- Technology 34%
- Consumer Discretionary 11%
- Telecommunications 11%
- Financials 9%
- Industrials 7%
- Health Care 6%
- Consumer Staples 5%
- Basic Materials 2%
- Energy 2%
- Utilities 2%
- Real Estate 1%
With 34% in technology, followed by consumer cyclicals and communication services, the portfolio is positioned to benefit from growth in these dynamic sectors. However, this concentration also makes it vulnerable to sector-specific downturns. Balancing with sectors that have different economic sensitivities, like utilities or healthcare, could mitigate this risk.
Regions
- North America 39%
The geographic distribution is heavily skewed towards North America (39%), with no exposure to emerging markets or developed markets outside of North America. This geographic concentration limits diversification benefits and exposure to global growth opportunities. Increasing allocations to other regions could enhance returns and reduce region-specific risks.
Market capitalization
- Mega-cap 44%
- Large-cap 28%
- Mid-cap 13%
- Small-cap 3%
The portfolio's emphasis on mega (44%) and big-cap (28%) companies suggests a preference for established, potentially less volatile stocks. While this can offer stability, incorporating more medium, small, or micro-cap stocks could increase diversification and potential for higher returns, albeit with higher 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.
Optimizing this portfolio using the Efficient Frontier could identify a mix of assets that offers the best possible risk-return ratio based on historical data. While this approach provides a theoretical optimum, it's essential to consider personal risk tolerance, investment horizon, and market changes. Diversification beyond the current asset classes and sectors could improve the portfolio's efficiency.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard Total World Stock Index Fund ETF Shares 1.70%
- Weighted yield (per year) 1.05%
The portfolio's average dividend yield of 1.05% contributes to its total returns. While not the primary focus, dividends offer a passive income stream and a potential buffer during market downturns. Considering higher-yielding investments or dividend growth stocks could enhance income without significantly increasing risk.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.10%
The portfolio benefits from relatively low costs, with a total expense ratio (TER) of 0.10%. Keeping costs low is crucial for enhancing long-term returns, as even small differences in fees can compound significantly over time. This aspect of the portfolio is well-optimized, supporting better performance.
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