Growth-focused portfolio with tech concentration and limited geographic diversification

Report created on Mar 31, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards U.S. equities, with a strong emphasis on growth-focused ETFs and funds. The Vanguard S&P 500 ETF and Vanguard Growth Index Fund Admiral Shares make up the bulk, accounting for nearly 70% of the portfolio. This structure suggests a focus on capital appreciation rather than income generation. While this composition aligns with a growth strategy, it lacks asset class diversity, with 100% allocation in stocks. Balancing with other asset types, such as bonds or international equities, could enhance diversification and mitigate risk.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 17.85%. This impressive figure reflects the strong performance of U.S. equities, particularly in the technology sector. However, it's important to note the portfolio's maximum drawdown of -33.14%, indicating significant volatility during market downturns. Comparing this to broader market benchmarks, the portfolio has outperformed, yet the high volatility suggests a need for caution. Diversifying across more sectors or including defensive assets could help stabilize returns during turbulent periods.

Projection Info

Forward projections using Monte Carlo simulations provide a range of potential outcomes based on historical data. With a median return of 704.4% and an annualized return of 19.38%, the portfolio shows promising growth potential. However, the 5th percentile outcome of 53.4% highlights potential risks. These projections, while insightful, are not guarantees. They rely on past performance, which may not predict future results. To navigate uncertainties, consider adjusting the portfolio to include assets that historically perform well in varied market conditions, potentially smoothing out future returns.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, offering no exposure to other asset classes like bonds or real estate. This concentration can lead to higher volatility, especially during market corrections. While stocks are typically associated with higher returns, the lack of diversification across asset classes increases risk. To align with best practices, consider introducing fixed income or alternative investments. This could provide a buffer against equity market downturns and offer more consistent returns, aligning with a comprehensive investment strategy.

Sectors Info

  • Technology
    54%
  • Financials
    9%
  • Telecommunications
    8%
  • Health Care
    6%
  • Consumer Discretionary
    5%
  • Consumer Discretionary
    5%
  • Industrials
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    1%
  • Real Estate
    1%
  • Utilities
    1%

With 54% of the portfolio in technology, there's a significant sector concentration that could lead to increased volatility, especially during interest rate hikes. Other sectors like financial services and communication services are present but underrepresented. This tech-heavy allocation has benefited from recent trends but may not be sustainable long-term. To mitigate sector-specific risks, consider reallocating some funds to underrepresented sectors such as healthcare or industrials. This approach can provide a more balanced exposure to different economic cycles, enhancing overall portfolio stability.

Regions Info

  • North America
    99%

Geographically, the portfolio is almost entirely focused on North America, with 99% of assets allocated there. This lack of international diversification exposes the portfolio to regional economic risks and limits potential growth opportunities in emerging markets. While U.S. equities have performed well, a more globally diversified approach could reduce regional risk and tap into growth in other parts of the world. Consider adding international equities, particularly from emerging markets, to achieve a more balanced geographic exposure and potentially enhance returns.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    4%
  • Micro-cap
    3%

The portfolio is primarily invested in large-cap stocks, with 52% in mega-cap and 26% in big-cap companies. This focus on larger companies offers stability and lower volatility compared to small-cap stocks. However, it may limit exposure to high-growth opportunities often found in smaller companies. While the portfolio includes a small allocation to small and micro-cap stocks, increasing this exposure could enhance growth potential. Balancing market capitalizations can provide a mix of stability and growth, aligning with a diversified investment strategy.

Redundant positions Info

  • Vanguard Information Technology Index Fund ETF Shares
    Vanguard S&P 500 ETF
    VANGUARD GROWTH INDEX FUND ADMIRAL SHARES
    High correlation

The portfolio's assets are highly correlated, particularly among the Vanguard Information Technology Index Fund ETF Shares, Vanguard S&P 500 ETF, and Vanguard Growth Index Fund Admiral Shares. High correlation means these assets tend to move together, reducing the diversification benefits. In market downturns, this could lead to amplified losses. To improve diversification, consider adding assets with low correlation to current holdings, such as international equities or fixed income. This can help manage risk and enhance the portfolio's resilience against market fluctuations.

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 portfolio has room for optimization, particularly in terms of risk versus return. Utilizing the Efficient Frontier concept, which identifies the best possible risk-return ratio, could enhance performance. This involves adjusting the current asset allocation to achieve a more efficient balance. By reducing overlap among highly correlated assets and introducing less correlated ones, the portfolio can achieve better diversification. This optimization doesn't necessarily mean adding new assets but reallocating existing ones to improve the overall risk-return profile, aligning with strategic investment objectives.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.40%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.80%

The portfolio's overall dividend yield is 0.80%, reflecting its growth-oriented focus. While dividends provide a steady income stream, this portfolio prioritizes capital appreciation over income generation. For investors seeking income, this yield may be insufficient. However, for a growth-focused strategy, it's in line with expectations. If income becomes a priority, consider incorporating higher-yielding assets or dividend-focused funds. This adjustment could provide a more balanced approach, offering both growth potential and income generation, aligning with evolving investment goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, supporting better long-term performance by minimizing costs. The Vanguard S&P 500 ETF, with a TER of 0.03%, is particularly cost-effective. Low costs are a significant advantage, as they enhance net returns over time. This aligns well with best practices for cost management in investment portfolios. Maintaining this low-cost structure while potentially diversifying the portfolio can provide a strong foundation for achieving long-term financial goals without sacrificing returns to fees.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey