A tech-focused balanced portfolio with strong historical performance and low costs
Report created on Jul 28, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 25.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 25.00%
This portfolio is characterized by a significant allocation to technology through its 75% investment in the Vanguard S&P 500 ETF and Invesco NASDAQ 100 ETF, complemented by a 25% stake in the Vanguard Total International Stock Index Fund ETF for global diversification. This structure reflects a strategic emphasis on U.S. equities, particularly in the tech sector, while still maintaining a presence in international markets. The portfolio's diversification is broad, spanning various sectors and geographies, though it leans heavily towards North America and technology.
Growth
Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 14.54%, with a maximum drawdown of -27.74%. These figures indicate a strong performance relative to the risk taken, as evidenced by the portfolio's balanced risk score of 4 out of 7. It's important to remember, however, that past performance is not a reliable indicator of future results, and the relatively high concentration in tech sectors may introduce volatility.
Projection
Monte Carlo simulations, which project future performance based on historical data, show a median increase of 511.2% in portfolio value. While these simulations offer a broad range of potential outcomes, they inherently carry limitations and uncertainties, particularly in their ability to predict future market conditions. Thus, while encouraging, these projections should be viewed as one of many tools in investment decision-making.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's allocation is predominantly in stocks (99%), with a minimal cash position (1%). This heavy stock concentration aligns with the portfolio's growth-oriented strategy but also underscores its susceptibility to market volatility. Diversifying across more asset classes could provide additional stability during market downturns.
Sectors
- Technology 33%
- Financials 13%
- Consumer Discretionary 11%
- Telecommunications 10%
- Industrials 9%
- Health Care 8%
- Consumer Staples 6%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
- Real Estate 2%
With a third of the portfolio in technology, followed by financial services and consumer cyclicals, the sectoral allocation underscores a growth-focused strategy. This concentration in tech, while beneficial during bull markets, may increase volatility. Broadening the sectoral exposure could mitigate some risks associated with sector-specific downturns.
Regions
- North America 76%
- Europe Developed 10%
- Asia Emerging 4%
- Japan 4%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
The geographic allocation heavily favors North America (76%), with modest exposure to developed Europe and emerging Asian markets. This concentration enhances the portfolio's exposure to the robust U.S. economy but may limit potential gains from faster-growing international markets. Increasing exposure to underrepresented regions could enhance returns and reduce geographic risk.
Market capitalization
- Mega-cap 48%
- Large-cap 33%
- Mid-cap 16%
- Small-cap 1%
The portfolio's emphasis on mega (48%) and big (33%) cap stocks suggests a preference for established, less volatile companies. While this may offer stability, the limited exposure to small and micro-cap stocks could mean missing out on high-growth opportunities. A slight adjustment to include more medium, small, or micro-cap stocks could enhance growth potential.
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.
Given the current allocation, there's an opportunity to optimize the portfolio using the Efficient Frontier concept, aiming for the best possible risk-return ratio. Adjusting the asset allocation could improve the portfolio's efficiency, potentially offering higher returns for the same level of risk.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.42%
The portfolio's average dividend yield of 1.42% contributes to its total return, with the Vanguard Total International Stock Index Fund ETF Shares offering the highest yield at 2.80%. While dividends are a valuable income source, the focus should remain on total return, balancing growth and income generation according to individual financial goals.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.06%
With a total expense ratio (TER) of 0.06%, the portfolio is cost-efficient, enhancing long-term returns by minimizing fees. This low-cost approach is commendable and aligns with best practices for maximizing investment efficiency over time.
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