Growth-focused portfolio with heavy concentration in two stocks and limited global exposure

Report created on Aug 13, 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 highly concentrated, with 73% in Accor S.A., 21% in TotalEnergies SE, and only a 6% allocation to the EasyETF - BNP Paribas Easy S&P 500 UCITS ETF. Such concentration in two stocks, particularly within the consumer cyclicals and energy sectors, significantly limits diversification. While this approach can offer substantial returns if those sectors perform well, it also exposes the portfolio to higher volatility and sector-specific risks. Comparatively, a more diversified portfolio might include a broader range of sectors and asset classes to mitigate these risks.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.46%, with a maximum drawdown of -50.57%. This performance indicates periods of high returns but also significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns were notably few, suggesting that the portfolio's performance is highly reliant on short, exceptional market movements. Benchmarking this performance against a diversified index could provide perspective on the trade-offs between concentration risk and potential returns.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, indicate a wide range of potential outcomes for this portfolio. While 849 out of 1,000 simulations resulted in positive returns, the 5th percentile outcome shows a significant potential loss. This underscores the portfolio's high risk, attributed to its lack of diversification. It's important to note, however, that such simulations are based on past performance, which is not a reliable indicator of future results.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no presence in bonds, real estate, commodities, or cash equivalents. This allocation underscores a growth-oriented strategy but lacks the balance that other asset classes can provide, especially in terms of reducing volatility and offering potential income through dividends or interest. Incorporating a mix of asset classes could improve the portfolio's risk-adjusted returns over time.

Sectors Info

  • Consumer Discretionary
    74%
  • Energy
    21%
  • Technology
    2%
  • Financials
    1%
  • Telecommunications
    1%
  • Health Care
    1%

Sector allocation is heavily skewed towards consumer cyclicals and energy, with minimal exposure to other sectors. This concentration not only increases vulnerability to sector-specific downturns but also misses out on potential opportunities in other areas of the market. Diversifying across a broader range of sectors could reduce risk and improve the portfolio's resilience to market fluctuations.

Regions Info

  • Europe Developed
    94%
  • North America
    6%

Geographically, the portfolio is almost entirely invested in developed Europe, with a minor allocation to North America. This limited geographic exposure can be a double-edged sword; while it may capitalize on regional growth, it also increases susceptibility to regional economic downturns. Expanding geographic exposure, especially to emerging markets, could offer additional growth opportunities and further diversification benefits.

Market capitalization Info

  • Large-cap
    96%
  • Mega-cap
    3%
  • Mid-cap
    1%

The focus on big and mega-cap stocks suggests a preference for established, potentially less volatile companies. However, this approach may overlook the growth potential of mid and small-cap stocks. While larger companies are typically more stable, they often offer lower growth prospects compared to smaller companies, which can provide dynamic growth opportunities 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.

Efficient Frontier analysis suggests that the portfolio could achieve an expected return of 13.85% with the same level of risk, indicating room for optimization. By adjusting asset allocations, it's possible to enhance returns without increasing risk. This process involves diversifying across more sectors, asset classes, and geographies to improve the portfolio's risk-return profile.

Dividends Info

  • Accor S. A. 2.80%
  • TotalEnergies SE 6.10%
  • Weighted yield (per year) 3.32%

Dividend yields from Accor S.A. and TotalEnergies SE contribute to the portfolio's income, with an overall yield of 3.32%. While dividends can provide a steady income stream, relying solely on two companies for these payments increases risk. Broadening the dividend sources across more stocks and sectors could enhance income stability and reduce dependency on any single company's performance.

Ongoing product costs Info

  • EasyETF - BNP Paribas Easy S&P 500 UCITS ETF 0.12%
  • Weighted costs total (per year) 0.01%

The portfolio's overall costs are exceptionally low, with the EasyETF - BNP Paribas Easy S&P 500 UCITS ETF charging only 0.12% and a total expense ratio (TER) of 0.01%. This efficient cost structure supports better net returns over the long term. Maintaining low costs is crucial for investment success, especially in a concentrated portfolio where performance can be more unpredictable.

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