Highly concentrated high growth tech and semiconductor portfolio with strong historic returns and high risk
Report created on May 3, 2024Risk profile
5/7
Diversification profile
1/5
Positions
-
XS SPDR® S&P Semiconductor ETF
XSD - US78464A8624 23.58% -
SM VanEck Semiconductor ETF
SMH - US92189F6768 20.31% -
IG iShares Expanded Tech-Software Sector ETF
IGV - US4642875151 18.24% -
XL Technology Select Sector SPDR® Fund
XLK - US81369Y8030 16.35% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 16.18% -
MS Microsoft Corporation
MSFT - US5949181045 5.34%
The portfolio is extremely focused: 100% stocks, almost entirely in technology, with a heavy tilt to semiconductors. Two semiconductor ETFs alone make up nearly half the allocation, supported by two broad tech funds, a large US equity ETF, and a single Microsoft position. This creates a clear “high conviction in tech” structure rather than a balanced, core portfolio. That kind of focus can amplify both gains and losses. For someone using this as a full investment solution, the lack of diversification is a key consideration. As a satellite or “side bet” around a more balanced core, it makes much more sense and the concentrated structure is easier to justify.
Growth
Historically, performance has been outstanding: $1,000 grew to about $7,591 over ten years, with a compound annual growth rate (CAGR) of 22.52%. CAGR is like your average yearly speed on a long road trip, smoothing out bumps along the way. This easily beat both the US market and global market by wide margins. The trade-off is clear: the portfolio saw a max drawdown of about -39.11%, worse than the benchmarks. Max drawdown measures the worst peak-to-trough fall. So far, investors have been very well rewarded for taking on extra pain, but there’s no guarantee the next decade looks the same.
Asset classes
- Stocks 100%
Every dollar is in equities, with no bonds, cash-like assets, or other diversifiers. That pure-stock structure is a textbook “growth” posture, maximizing long-term upside potential but also exposing the portfolio to full equity market swings. In big selloffs, there’s no built-in safety buffer. Many broad market portfolios mix in bonds or defensive assets to soften the ride and provide dry powder to buy dips. Here, risk is intentionally dialed high, which is fine if it’s part of a wider plan that includes safer holdings elsewhere. On its own, though, this asset mix is aggressive and best suited to long horizons.
Sectors
- Technology 87%
- Telecommunications 3%
- Financials 2%
- Consumer Discretionary 2%
- Health Care 2%
- Industrials 1%
- Consumer Staples 1%
- Energy 1%
Sector exposure is dominated by technology at about 87%, with tiny slivers in other sectors mostly via the S&P 500 ETF. This tech-heavy profile is the main driver of both the strong historic returns and the elevated volatility. Tech tends to be sensitive to things like interest rates, innovation cycles, and investor sentiment around growth stories. During booms, this concentration can be a big advantage. During rate spikes or tech-specific downturns, it can magnify losses versus a more sector-balanced portfolio. The positive here is that the sector tilt is very clear and intentional, which makes it easier to monitor and judge over time.
Regions
- North America 94%
- Asia Developed 3%
- Europe Developed 2%
Geographically, the portfolio is overwhelmingly focused on North America at about 94%, with only a small allocation to developed Asia and Europe through global chip exposure. That means results will track closely with the fortunes of US and Canadian markets, especially US tech. This kind of home-region tilt has worked well recently, given US market leadership, especially in technology. However, it does leave the portfolio more exposed to region-specific risks like changes in US regulation, tax policy, or valuations. A more globally spread equity mix can sometimes offer smoother returns when different regions take turns leading.
Market capitalization
- Mega-cap 36%
- Large-cap 33%
- Mid-cap 16%
- Small-cap 10%
- Micro-cap 5%
Market cap exposure is skewed toward larger companies, with roughly 69% in mega- and large-caps, then a meaningful chunk in mid-caps and still some small and micro exposure. Larger names often bring more liquidity, established business models, and slightly more resilience in downturns. Smaller firms, however, can add growth potential and extra volatility. This mix offers a good spread across company sizes while still keeping the core in big, well-known businesses. The key nuance is that even though size buckets are varied, many of these companies swim in the same tech and chip pond, so diversification by size doesn’t fully offset sector concentration.
True holdings
-
Part of fund(s):
- Technology Select Sector SPDR® Fund
- Vanguard S&P 500 ETF
- iShares Expanded Tech-Software Sector ETF
-
NV NVIDIA Corporation 7.56%
Part of fund(s):- Technology Select Sector SPDR® Fund
- VanEck Semiconductor ETF
- Vanguard S&P 500 ETF
-
AA Apple Inc 3.23%
Part of fund(s):- Technology Select Sector SPDR® Fund
- Vanguard S&P 500 ETF
-
AV Broadcom Inc 2.88%
Part of fund(s):- Technology Select Sector SPDR® Fund
- VanEck Semiconductor ETF
- Vanguard S&P 500 ETF
-
TS Taiwan Semiconductor Manufacturing 2.37%
Part of fund(s):- VanEck Semiconductor ETF
-
PL Palantir Technologies Inc. 2.19%
Part of fund(s):- Technology Select Sector SPDR® Fund
- iShares Expanded Tech-Software Sector ETF
-
MU Micron Technology Inc 1.61%
Part of fund(s):- Technology Select Sector SPDR® Fund
- VanEck Semiconductor ETF
-
OR Oracle Corporation 1.49%
Part of fund(s):- iShares Expanded Tech-Software Sector ETF
-
LR Lam Research Corp 1.44%
Part of fund(s):- Technology Select Sector SPDR® Fund
- VanEck Semiconductor ETF
-
AM Applied Materials Inc 1.41%
Part of fund(s):- Technology Select Sector SPDR® Fund
- VanEck Semiconductor ETF
- Top 10 total 33.44%
Looking through the ETFs, Microsoft shows up twice: as a direct stock and inside funds, for a total exposure of about 9.27%. Major chip names like NVIDIA, TSMC, Broadcom, and Micron also appear across multiple ETFs, which quietly concentrates risk in a handful of big tech leaders. Because only ETF top-10 holdings are captured, this overlap is actually understated. Hidden concentration matters because if these few companies stumble together, the whole portfolio feels it. The structure is essentially a leveraged view on the same group of tech and semiconductor giants, not a broad mix of unrelated businesses.
Factors
Factor exposures show a very low tilt to value and a low tilt to yield and low volatility. Factors are like investment “ingredients” such as cheapness (value), stability (low volatility), or income (yield) that research has tied to long-term returns. A very low value score means holdings are generally expensive growth names rather than bargain-priced stocks. Low yield and low volatility tilts confirm the focus on fast-growing, more volatile companies that reinvest profits instead of paying high dividends. This setup tends to shine when growth is in favor and rates are supportive, but it can suffer when markets rotate toward cheaper, more defensive, or income-oriented areas.
Risk contribution
-
SPDR® S&P Semiconductor ETF
Weight: 23.58% 29.8% -
VanEck Semiconductor ETF
Weight: 20.31% 24.3% -
iShares Expanded Tech-Software Sector ETF
Weight: 18.24% 16.3% -
Technology Select Sector SPDR® Fund
Weight: 16.35% 14.9% -
Vanguard S&P 500 ETF
Weight: 16.18% 10.3% - Top 5 risk contribution 95.6%
Risk contribution stats show that the two semiconductor ETFs together account for over half of total portfolio risk, more than their already large combined weight would suggest. Risk contribution measures how much each holding adds to overall volatility, not just how big it is. Here, the most volatile positions dominate the portfolio’s ups and downs. The S&P 500 ETF, despite a sizable allocation, contributes relatively less risk, acting as a stabilizer. If the goal is to dial down swings without changing the overall theme, one approach is trimming the highest risk/weight positions and slightly boosting steadier ones while keeping the same building blocks.
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.
On the risk–return chart, the current portfolio sits below the efficient frontier by about 3.48 percentage points at its risk level. The efficient frontier shows the best possible return for each risk level using the same set of holdings but different weights. The optimal mix here has a higher Sharpe ratio (1.0 vs. 0.82), meaning better return per unit of risk. Since the gap is meaningful, reweighting the existing ETFs and stock—without adding anything new—could improve the tradeoff. This might involve leaning a bit more toward the S&P 500 and slightly less on the most volatile semiconductor exposure while keeping the same overall theme.
Dividends
- Microsoft Corporation 1.00%
- VanEck Semiconductor ETF 0.30%
- Vanguard S&P 500 ETF 1.20%
- Technology Select Sector SPDR® Fund 0.60%
- SPDR® S&P Semiconductor ETF 0.30%
- Weighted yield (per year) 0.48%
Income is a small part of the story, with an overall dividend yield around 0.48%. That’s well below broad market averages and reflects the growth-oriented nature of the holdings. Many tech and semiconductor companies prefer to reinvest cash in research, capacity, and acquisitions instead of paying high dividends. For investors focused on total return rather than current income, this can be perfectly fine, especially in tax-sensitive accounts. However, anyone who needs regular cash flow would typically pair a portfolio like this with higher-yielding investments elsewhere, since this mix is designed more for capital appreciation than for steady payouts.
Ongoing product costs
- iShares Expanded Tech-Software Sector ETF 0.41%
- VanEck Semiconductor ETF 0.35%
- Vanguard S&P 500 ETF 0.03%
- Technology Select Sector SPDR® Fund 0.09%
- SPDR® S&P Semiconductor ETF 0.35%
- Weighted costs total (per year) 0.25%
Costs are impressively low for such a specialized lineup, with a blended total expense ratio (TER) of about 0.25%. TER is the ongoing fee charged by funds, quietly deducted inside the ETF; lower fees mean more of the return stays in your pocket and compounds over time. The presence of the ultra-low-cost S&P 500 ETF and modest fees on the tech and semiconductor funds keeps overall costs competitive, especially compared with many active strategies targeting similar themes. From a cost perspective, this setup is well-aligned with best practices and supports stronger long-term performance if high returns continue.
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