An analysis of a growth-focused portfolio with high exposure to US equities and low diversification

Report created on Jul 12, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

Your portfolio is heavily concentrated in US equities, split evenly across four ETFs: Invesco QQQ Trust, SPDR S&P 500 ETF Trust, Vanguard S&P 500 ETF, and Vanguard Total Stock Market Index Fund ETF Shares. This composition suggests a strong focus on growth, leveraging the performance of the largest US companies. However, it also indicates low diversification, both geographically and across asset classes, with a complete allocation to stocks.

Growth Info

Historically, your portfolio has shown a Compound Annual Growth Rate (CAGR) of 15.50%, with a maximum drawdown of -32.35%. These figures highlight the portfolio's growth orientation but also underline its susceptibility to significant market downturns. The days contributing to 90% of returns are notably few, emphasizing the impact of short-term, high-gain periods on overall performance.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median increase of 600.3% in portfolio value. This suggests a strong potential for growth, albeit with inherent volatility. The high percentage of simulations resulting in positive returns underscores the robustness of your strategy in diverse market conditions, though it's important to note that such simulations rely on historical data, which doesn't guarantee future performance.

Asset classes Info

  • Stocks
    100%

Your portfolio's allocation is singularly focused on stocks, providing no cushion against stock market volatility through bonds or other asset classes. While this aligns with a growth-oriented strategy, it lacks the balance that might protect against downturns, making it more susceptible to market fluctuations.

Sectors Info

  • Technology
    38%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Financials
    11%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The sectoral allocation heavily favors technology, followed by consumer cyclicals, communication services, and financial services. This concentration in high-growth sectors can enhance returns but also increases the portfolio's risk profile, particularly in market corrections or when these sectors underperform.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

With 99% of assets in North America, your portfolio's geographic exposure is highly concentrated. This focus has historically provided strong returns but also exposes you to regional economic and political risks. Expanding into other developed or emerging markets could provide better diversification and risk management.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%
  • Micro-cap
    1%

The emphasis on mega and big-cap stocks bolsters the portfolio's growth potential, given these companies' established market positions. However, the minimal exposure to small and micro-cap stocks limits opportunities for outsized returns from smaller, faster-growing companies.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    SPDR S&P 500 ETF Trust
    Vanguard S&P 500 ETF
    High correlation

The high correlation among your ETFs means your portfolio might not be as diversified as it appears. While each ETF tracks a slightly different index, their overlaps significantly reduce the diversification benefits, making your portfolio more vulnerable to market swings affecting the largest US stocks.

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.

Optimizing your portfolio involves addressing the high correlation among your holdings. By diversifying across different asset classes, sectors, and geographies, you can achieve a more balanced risk-return profile. The current efficiency is based on growth within a narrow focus, which could be broadened for better risk management.

Dividends Info

  • Invesco QQQ Trust 0.40%
  • SPDR S&P 500 ETF Trust 0.90%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 0.92%

The overall dividend yield of your portfolio stands at 0.92%, contributing to total returns. While not the primary focus of a growth-oriented strategy, these dividends offer a modest income stream and a potential buffer during market dips.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.09%

Your portfolio benefits from low overall costs, with a Total Expense Ratio (TER) of just 0.09%. This efficient cost structure is commendable, as it helps maximize net returns over time, a crucial factor in long-term investment success.

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