A tech-heavy growth-oriented portfolio with a strong US focus and moderate diversification

Report created on May 10, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is predominantly invested in US equities, with a significant emphasis on technology through its large allocations to the Vanguard Information Technology Index Fund ETF Shares and the Schwab U.S. Large-Cap Growth ETF. The Schwab U.S. Broad Market ETF provides broader market exposure, while the Schwab International Equity ETF offers a modest international presence. This composition indicates a growth-oriented strategy with a tech-heavy focus, aligning with the portfolio's risk classification as "Profile_Growth."

Growth Info

Historically, the portfolio has exhibited a Compound Annual Growth Rate (CAGR) of 16.17%, with a maximum drawdown of -33.08%. These figures suggest a high growth potential at the expense of significant volatility. The days contributing to 90% of returns being concentrated in just 32.0 days highlight the portfolio's susceptibility to short-term market movements, underscoring the importance of a long-term investment horizon for weathering volatility.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a wide dispersion of possible returns for this portfolio. With a median projected growth of 483.4% and 988 out of 1,000 simulations showing positive returns, the analysis supports optimism for future growth. However, the significant spread between the 5th and 67th percentiles (58.5% to 735.9%) underscores the inherent uncertainty and risk.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is exclusively in stocks, with no presence in bonds, cash, or other asset classes. This singular focus on equities maximizes growth potential but also increases risk, particularly in market downturns. Diversifying across different asset classes could provide a buffer against volatility and offer a more stable return profile.

Sectors Info

  • Technology
    58%
  • Financials
    8%
  • Consumer Discretionary
    7%
  • Health Care
    7%
  • Telecommunications
    6%
  • Industrials
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

With 58% of the portfolio in technology, it is highly susceptible to sector-specific risks. While the tech sector can offer substantial growth, it's also prone to significant fluctuations. The remaining sectors, such as Financial Services, Consumer Cyclicals, and Healthcare, provide some diversification, but the overwhelming emphasis on technology limits the portfolio's ability to hedge against tech downturns.

Regions Info

  • North America
    94%
  • Europe Developed
    4%
  • Japan
    1%
  • Asia Developed
    1%

The portfolio's geographic allocation is heavily skewed towards North America (94%), with minimal exposure to developed Europe, Japan, and Asia. This concentration in the US market enhances exposure to domestic growth but also increases vulnerability to US-specific economic risks. Expanding international exposure could mitigate some of this risk and tap into growth opportunities in other regions.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    27%
  • Mid-cap
    15%
  • Small-cap
    5%
  • Micro-cap
    2%

The focus on Mega (50%) and Big (27%) cap stocks suggests a preference for established, large companies, likely contributing to the portfolio's growth profile. However, the limited exposure to Medium, Small, and Micro cap stocks restricts opportunities for higher returns that smaller companies might offer, albeit with increased risk.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Information Technology Index Fund ETF Shares
    Schwab U.S. Broad Market ETF
    High correlation

The high correlation among the Schwab U.S. Large-Cap Growth ETF, Vanguard Information Technology Index Fund ETF Shares, and Schwab U.S. Broad Market ETF limits the portfolio's diversification benefits. This overlap means that market downturns affecting the US or technology sectors could impact a significant portion of the portfolio simultaneously, highlighting a need for strategic rebalancing.

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.

Given the high correlation among key assets, the portfolio could be optimized by reducing overlap and introducing assets that offer diversification benefits without sacrificing growth potential. This approach would aim to improve the portfolio's risk-return profile, moving it closer to the Efficient Frontier, where the optimal balance of risk and return is achieved.

Dividends Info

  • Schwab U.S. Broad Market ETF 1.30%
  • Schwab International Equity ETF 2.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Weighted yield (per year) 0.98%

The portfolio's overall dividend yield of 0.98% reflects a moderate income component, with the highest yield from the Schwab International Equity ETF at 2.90%. Given the growth orientation, dividends play a secondary role to capital appreciation. However, for investors seeking income, increasing allocations to higher-yielding assets could enhance the income stream without drastically altering the growth focus.

Ongoing product costs Info

  • Schwab U.S. Broad Market ETF 0.03%
  • Schwab International Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Weighted costs total (per year) 0.06%

With a Total Expense Ratio (TER) of 0.06%, the portfolio benefits from low costs, supporting better long-term performance. Keeping costs low is crucial for maximizing returns, especially in growth-oriented portfolios where the compounding effect can significantly enhance wealth accumulation over time.

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