Two index funds enter a bar then forget what diversification looks like
Report created on Apr 26, 2026Risk profile
5/7
Diversification profile
2/5
Positions
-
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 60.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 40.00%
This “portfolio” is basically one idea wearing two different brand-name T‑shirts. Sixty percent in a NASDAQ 100 tracker and forty percent in an S&P 500 tracker is more costume change than strategy shift. The holdings overlap heavily in the same mega-cap darlings, so the second ETF mostly repeats what the first one already does, with a tiny sprinkling of extra names. It looks diversified on the surface, but under the hood it’s just a growth-heavy US equity bet with training wheels. Structurally, this is less a thoughtfully built portfolio and more a “what are the two most popular tickers on the brokerage app” setup.
Growth
Historically, the portfolio actually crushed it: turning $1,000 into $2,253 with a 15.89% CAGR. CAGR (Compound Annual Growth Rate) is the “average speed” of the portfolio over the trip, potholes included. It even edged out the US market and comfortably beat the global market, so the rearview mirror looks great. The price for that: a -30.66% max drawdown, which is a polite way of saying “watch 30% vanish and wait over a year to feel whole again.” Past data is yesterday’s weather — helpful, but it doesn’t promise the next storm will behave the same way.
Projection
The Monte Carlo projection basically says “this might work out fine… or not, shrug.” Monte Carlo just means running thousands of random what-if market paths to see a spread of possible futures. Median outcome of $2,771 from $1,000 in 15 years is nice, but the p5–p95 range from $949 to $8,008 is wild. Translation: anywhere from “barely broke even” to “hero story at dinner parties.” The 71.8% chance of a positive return is decent, but not lottery-winning odds. The simulation quietly reminds that a concentrated growth-tilted portfolio can make the graph go up fast or down hard, and the dice don’t care what the backtest did.
Asset classes
- Stocks 100%
Asset class breakdown: 100% stocks, 0% everything else. That’s not an allocation; that’s a personality trait. No bonds, no cash buffer, no alternatives — just pure equity beta with an energy drink. This can be fun when markets are friendly and feels like genius in bull runs, but when volatility spikes, there’s nothing here to cushion the hit. Asset classes are like different instruments in a band; this portfolio is an all-electric-guitar solo played at full volume. It’s coherent, sure, but if markets start screaming, there’s nowhere inside this setup that quietly hums instead of yells.
Sectors
- Technology 45%
- Telecommunications 14%
- Consumer Discretionary 12%
- Consumer Staples 7%
- Health Care 7%
- Industrials 5%
- Financials 5%
- Energy 2%
- Utilities 2%
- Basic Materials 1%
- Real Estate 1%
Sector-wise, this thing has a full-blown tech crush: 45% in technology, plus extra risk-on flavor from telecom and consumer discretionary. Defensive sectors like utilities, real estate, and basic materials are basically background extras with one line each. That means the portfolio is heavily tied to growth, innovation, and market optimism cycles, with very little ballast when sentiment turns sour. Compared with broad indexes, this is like taking the core index and then pressing the “more excitement, less stability” button. When the growth engines are roaring, this feels brilliant; when they cough, everything coughs at once.
Regions
- North America 98%
- Europe Developed 1%
Geography is simple: North America 98%, everyone else can fight over the crumbs. This is home bias on steroids. It ignores the awkward fact that a big chunk of global economic activity and listed companies live outside the US zip code. It does ride the dominance of US large caps, but it also means the portfolio’s fate is welded to one macro, one currency, and one political and regulatory regime. Global diversification is like having multiple escape routes; this setup is more “one door, hope it never catches fire.”
Market capitalization
- Mega-cap 49%
- Large-cap 36%
- Mid-cap 14%
Market cap tilt is aggressively top-heavy: 49% mega-cap, 36% large-cap, and a token 14% mid-cap. There’s basically no meaningful exposure to small caps, which are completely missing from the party. This is very much a “bet on the current winners staying winners” structure. Mega-caps can be stable in the sense that they’re established, but when sentiment shifts against them, they all tend to move together. It’s like a team of all-star players who also all play the same position — impressive, but not exactly flexible when the game changes.
True holdings
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NV NVIDIA Corporation 8.34%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
AA Apple Inc 6.93%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 5.41%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 4.39%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 3.31%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
AV Broadcom Inc 3.13%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 3.05%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 2.92%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard S&P 500 ETF
-
TS Tesla Inc 2.86%
Part of fund(s):- Invesco NASDAQ 100 ETF
- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
-
WM Walmart Inc. 1.91%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Top 10 total 42.26%
The look-through view is a greatest hits playlist on brutal repeat. NVIDIA, Apple, Microsoft, Amazon, Alphabet (twice), Meta, Tesla — all front and center, and often held via both ETFs. That overlap means the portfolio is more concentrated than the simple “two funds” structure suggests. Overlap is likely even higher than shown, since only ETF top tens are counted. Hidden concentration like this is sneaky: it pretends to be diversified because there are many line items, but performance is really driven by a tiny handful of superstar stocks that already dominate every headline.
Factors
Factor exposure is classic large-cap growth glam. Value is low at 32%, so cheap and unloved names barely get invited. Size is also low, confirming the near-total absence of smaller companies. Momentum and quality are roughly neutral, so there’s no clear tilt toward either “recent winners” or “highly profitable and stable” names beyond what the market already has. Yield is low, so income is basically an afterthought. Think of factors as the flavor profile; this one is heavily “expensive, big, and growthy” with very little “cheap, small, or steady paycheck” in the mix. Works great in boom times, sulks in value or small-cap comebacks.
Risk contribution
-
Invesco NASDAQ 100 ETF
Weight: 60.00% 67.1% -
Vanguard S&P 500 ETF
Weight: 40.00% 32.9%
Risk contribution tells you who’s actually rocking the boat, not just who’s sitting in it. The NASDAQ 100 ETF is 60% of the weight but contributes 67.08% of total risk — it’s the loud one in the room. The S&P 500 ETF, at 40% weight, contributes only 32.92%, so it’s basically the slightly calmer twin dragged along for the ride. Risk/weight of 1.12 versus 0.82 shows the NASDAQ sleeve is doing more than its share of drama. This means the portfolio’s mood swings are overwhelmingly dictated by that one position; everything else is more or less backup dancers.
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.
The efficient frontier section is the one place this portfolio avoids embarrassment. With a Sharpe ratio of 0.65 versus 0.88 for the optimal and minimum-variance portfolios, it’s not perfect, but it’s near the efficient frontier using just these two funds. The Sharpe ratio is basically return per unit of stress; higher is better. The optimization says the same two ingredients could be arranged slightly better, but honestly, the existing mix isn’t doing anything outrageously dumb given the constraint set. It’s like someone built a very narrow, very focused portfolio and then, accidentally, didn’t waste the risk they were taking.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard S&P 500 ETF 1.10%
- Weighted yield (per year) 0.74%
Dividend yield at 0.74% is pocket change territory. That’s what happens when most of the exposure is in growth-heavy mega-caps that prefer buybacks and reinvestment over mailing out cash. If dividends are the portfolio’s “salary,” this one is basically living off capital gains and vibes. That’s fine in a market that keeps bidding growth names higher, but it means there’s little built-in cushion from regular income when prices stall or slide. The yield profile confirms this is a capital appreciation engine, not an income machine, which matches the high-growth, tech-tilted style a little too perfectly.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.10%
On costs, the portfolio actually behaves like it knows what it’s doing. A blended TER of 0.10% is impressively low — the kind of number that suggests someone at least glanced at an expense ratio table once. Fees are the silent tax that compounds against you, so keeping them this tight is one of the few unambiguously sensible choices here. It’s a bit ironic: the structure is basically “two overlapping US stock funds and vibes,” but at least it isn’t paying luxury pricing for that simplicity. Think economy ticket, same plane, not overpaying for the turbulence.
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