A tech-heavy growth portfolio with a strong emphasis on US equities and low diversification
Report created on Aug 9, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 50.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00%
The portfolio is split evenly between the Vanguard Information Technology Index Fund ETF Shares and the Vanguard S&P 500 ETF, allocating 50% to each. This structure indicates a heavy emphasis on technology and large-cap stocks, given the significant weight of tech companies within the S&P 500. While this concentration in tech and large-cap stocks aligns with a growth-oriented strategy, it also reflects low diversification, particularly across sectors and geographies.
Growth
With a Compound Annual Growth Rate (CAGR) of 18.78% and a maximum drawdown of -32.71%, the portfolio has demonstrated strong historical performance, albeit with significant volatility. The days contributing to 90% of returns being concentrated in just 39.0 days highlight the portfolio's reliance on short, sharp gains, typical of growth-focused investments. This performance is impressive but should be viewed with caution, as past success does not guarantee future results.
Projection
Monte Carlo simulations, a method for estimating future outcomes by running multiple scenarios based on historical data, suggest a wide range of possible future performances for this portfolio. With a median projected increase of 1,019.9% and 998 out of 1,000 simulations showing positive returns, the forward outlook appears optimistic. However, it's important to remember that these projections are speculative and depend heavily on past market conditions persisting.
Asset classes
- Stocks 100%
The portfolio's assets are entirely in stocks, with no allocation to bonds, real estate, or other asset classes. This allocation supports a high-growth strategy but comes with increased risk, especially in market downturns. Diversifying across different asset classes can help mitigate this risk without necessarily compromising on growth potential.
Sectors
- Technology 66%
- Financials 7%
- Consumer Discretionary 5%
- Telecommunications 5%
- Health Care 5%
- Industrials 4%
- Consumer Staples 3%
- Energy 2%
- Utilities 1%
- Real Estate 1%
- Basic Materials 1%
Technology dominates the portfolio at 66%, with the remaining sectors such as Financial Services and Consumer Cyclicals making up a smaller proportion. This sector concentration enhances exposure to tech industry growth but also increases vulnerability to sector-specific downturns. Diversifying across more sectors could reduce this risk.
Regions
- North America 99%
The portfolio's geographic allocation is almost entirely in North America (99%), which suggests a strong home bias. While this can offer familiarity and potentially lower costs, it also exposes the portfolio to regional economic and political risks. Expanding geographic exposure could provide a buffer against local market fluctuations.
Market capitalization
- Mega-cap 49%
- Large-cap 30%
- Mid-cap 15%
- Small-cap 4%
- Micro-cap 1%
With 49% in mega-cap stocks and a total of 79% in mega and big-cap stocks, the portfolio is positioned to benefit from the stability and growth potential of the largest companies. However, this focus may limit exposure to the higher growth potential of smaller companies. Considering a more balanced market cap allocation could enhance returns and diversification.
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 portfolio demonstrates a strong risk-return profile based on historical data. However, its efficiency could be enhanced by diversifying across more asset classes, sectors, and geographies. While the Efficient Frontier suggests optimization within the existing assets, real-world application should consider broader diversification to manage risk better.
Dividends
- Vanguard Information Technology Index Fund ETF Shares 0.50%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 0.85%
The portfolio's dividend yield stands at 0.85%, combining a lower yield from the tech ETF and a higher yield from the S&P 500 ETF. While dividends are not the primary focus of this growth-oriented strategy, they can provide a steady income stream and contribute to total returns, especially in volatile or down markets.
Ongoing product costs
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.06%
The total expense ratio (TER) of 0.06% is impressively low, minimizing the drag on returns due to costs. Keeping costs low is crucial for long-term investment success, especially in growth strategies where compound interest plays a significant role. This aspect of the portfolio is well-optimized.
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