A growth-focused portfolio with a strong tech tilt and limited geographic diversification

Report created on Mar 29, 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 ETFs, with the Vanguard S&P 500 ETF making up 50%, Invesco QQQ Trust at 30%, and Schwab U.S. Dividend Equity ETF at 20%. This composition leans heavily on U.S. equities, with a focus on large-cap stocks. The lack of diversification across asset classes may increase vulnerability to U.S. market fluctuations. Balancing the portfolio with a broader range of asset types could enhance risk management and potentially improve returns, especially during market downturns.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.58%, which is impressive compared to many benchmarks. However, it also experienced a maximum drawdown of -31.58%, indicating significant volatility during market downturns. This performance suggests a high-risk, high-reward profile. While past performance is not indicative of future results, maintaining a balance between growth and risk is crucial. Consider diversifying further to mitigate potential drawdowns in the future.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a median growth of 551.4% and a high probability of positive returns. With 995 out of 1,000 simulations showing gains, the portfolio appears robust. However, projections are inherently uncertain and should be interpreted cautiously. This optimistic outlook supports the portfolio's growth focus, but continued monitoring and adjustment to market conditions are advisable to sustain performance.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking exposure to other asset classes like bonds or commodities. This singular focus may amplify returns during bull markets but also increases risk during downturns. Diversification across asset classes is a key strategy for spreading risk and smoothing returns over time. Introducing additional asset types could provide more stability and reduce the impact of market volatility on overall performance.

Sectors Info

  • Technology
    33%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Health Care
    11%
  • Financials
    10%
  • Consumer Staples
    8%
  • Industrials
    7%
  • Energy
    4%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

With a 33% allocation to technology, the portfolio is heavily concentrated in this sector, which may lead to increased volatility, especially during periods of interest rate hikes. The remaining sectors are more evenly distributed, but the heavy tech focus may overshadow other sectors' contributions. Aligning sector allocations with broader market benchmarks could enhance diversification and reduce sector-specific risks, particularly if technology experiences a downturn.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio's geographic allocation is overwhelmingly focused on North America, with 99% exposure, leaving it vulnerable to regional economic and political risks. This lack of international diversification may limit growth opportunities in emerging markets. Expanding geographic exposure could provide access to new growth areas and reduce dependence on the U.S. economy. Consider incorporating international equities to balance regional risks and opportunities.

Market capitalization Info

  • Large-cap
    41%
  • Mega-cap
    39%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio is predominantly invested in large-cap stocks, with 41% in big caps and 39% in mega caps. This focus on larger companies may offer stability but limits exposure to the growth potential of smaller companies. Medium and small-cap stocks can provide diversification and opportunities for higher returns, albeit with increased risk. A more balanced market capitalization approach could enhance growth prospects and overall portfolio resilience.

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's current allocation could potentially be optimized using the Efficient Frontier, a concept that seeks the best possible risk-return ratio given existing assets. While already growth-focused, minor adjustments in asset allocation could enhance efficiency. This approach won't necessarily diversify the portfolio but aims to maximize returns for a given level of risk. Periodic reviews and adjustments can ensure the portfolio remains aligned with this strategy.

Dividends Info

  • Invesco QQQ Trust 0.50%
  • Schwab U.S. Dividend Equity ETF 2.90%
  • Vanguard S&P 500 ETF 1.00%
  • Weighted yield (per year) 1.23%

The portfolio's total dividend yield stands at 1.23%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield of 2.90%. While dividends provide a steady income stream, this portfolio primarily focuses on growth rather than income. For investors seeking regular income, increasing exposure to high-dividend stocks or funds could enhance yield. However, balancing growth and income is essential to meet long-term investment goals.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is 0.09%, which is impressively low. This cost efficiency supports better long-term performance by minimizing fees that can erode returns. Maintaining low costs is a critical factor in optimizing portfolio returns over time. Continue monitoring expense ratios to ensure they remain competitive and consider cost-effective options when rebalancing or adjusting the portfolio.

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