Growth-focused portfolio with heavy tech exposure and limited diversification

Report created on Aug 6, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards technology and growth, with 75% of its assets in tech-focused and growth ETFs. The remaining 25% is in a broad market ETF, providing some exposure to the overall market. However, this structure leads to a low diversification score, as it is heavily reliant on the performance of the tech sector and large-cap stocks. The portfolio's asset allocation shows a clear preference for growth over value, with no direct exposure to international markets, bonds, or alternative asset classes.

Growth Info

The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 17.79%, demonstrates strong past returns, significantly influenced by the tech sector's bull run in recent years. However, it's crucial to remember that past performance is not indicative of future results, especially in a portfolio with such concentrated exposure. The maximum drawdown of -33.49% also highlights the portfolio's vulnerability to market corrections, particularly in the tech sector.

Projection Info

Monte Carlo simulations suggest a wide range of potential outcomes, with a median projected increase of 861.6%. While these simulations offer a glimpse into possible future scenarios based on historical data, they come with limitations and cannot predict unexpected market shifts. Investors should consider the high degree of uncertainty and the portfolio's significant reliance on the continued success of the tech sector.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, with no allocation to bonds, real estate, commodities, or cash. This allocation aligns with a growth-oriented strategy but sacrifices diversification and risk mitigation. The absence of asset class diversification can expose the portfolio to higher volatility, especially during market downturns when non-correlated assets might otherwise offer a buffer.

Sectors Info

  • Technology
    58%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Financials
    7%
  • Health Care
    5%
  • Industrials
    4%
  • Consumer Staples
    2%
  • Real Estate
    1%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%

With 58% of the portfolio in technology, followed by consumer cyclicals and communication services, the sector allocation underscores the portfolio's growth focus. While this has historically delivered strong returns, it also increases susceptibility to sector-specific risks. Diversifying across a broader range of sectors could reduce volatility and improve long-term stability.

Regions Info

  • North America
    100%

The geographic allocation is exclusively North American, lacking exposure to developed international or emerging markets. This concentration in a single region can limit opportunities for global growth and increase the portfolio's sensitivity to US market fluctuations. Expanding into international markets could offer additional growth prospects and reduce geographic risk.

Market capitalization Info

  • Mega-cap
    56%
  • Large-cap
    25%
  • Mid-cap
    13%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's emphasis on mega and large-cap stocks (81%) aligns with its growth and technology focus but limits exposure to the potentially higher growth rates of mid and small-cap stocks. Including a broader mix of market capitalizations could enhance diversification and offer a balance between stability and growth.

Redundant positions Info

  • Vanguard Information Technology Index Fund ETF Shares
    Vanguard Growth Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation among the portfolio's assets, particularly the overlap between the tech-focused ETF and the broad market ETF, limits diversification benefits. This concentration increases the portfolio's risk profile, as it is more vulnerable to sector-specific downturns. Diversifying into less correlated assets could reduce risk and smooth out returns over time.

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 current allocation points to a need for optimization, particularly by reducing overlap and increasing diversification. Applying the Efficient Frontier concept could help identify an allocation that offers a better risk-return trade-off, potentially improving the portfolio's long-term performance without significantly increasing risk.

Dividends Info

  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Weighted yield (per year) 0.62%

The overall dividend yield of 0.62% reflects the portfolio's growth orientation, which typically prioritizes reinvestment over income distribution. While suitable for growth-focused investors, those seeking income or a more balanced approach might consider assets with higher dividend yields or incorporating income-focused investments.

Ongoing product costs Info

  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low total expense ratios (TER), averaging 0.05%, which is advantageous for long-term growth by minimizing the drag on returns. This cost efficiency is a positive aspect, especially important in a growth-focused strategy where maximizing compounding is key.

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