A tech-heavy portfolio with a strong bond foundation aiming for growth with moderate risk

Report created on May 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards the Invesco QQQ Trust, constituting 65% of the total, signaling a strong inclination towards technology stocks. The remaining 35% is divided between the Vanguard Total Bond Market Index Fund ETF and the iShares® 0-3 Month Treasury Bond ETF, providing a bond foundation. This composition suggests a strategy that seeks growth through equity investments in the technology sector while using bonds to mitigate overall portfolio volatility. The high allocation to a single ETF raises questions about diversification, despite the balanced risk profile.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.92%, with a maximum drawdown of -29.56%. These figures indicate a strong performance, particularly given the significant exposure to the volatile tech sector. However, the concentration in technology also contributes to the risk, as evidenced by the substantial drawdown. The days contributing to 90% of returns being few in number highlight the portfolio's susceptibility to market swings, especially in the tech domain.

Projection Info

Monte Carlo simulations, based on historical data, suggest a wide range of potential future outcomes, with a median projected increase of 149.5%. While the majority of simulations (956 out of 1000) predict positive returns, this method's reliance on past performance as an indicator of future results has limitations. Investors should remain cautious, as these projections cannot guarantee future performance, especially in the face of market volatility and economic changes.

Asset classes Info

  • Stocks
    65%
  • Bonds
    25%
  • Cash
    10%

The portfolio's asset class allocation—65% in stocks, 25% in bonds, and 10% in cash equivalents—strikes a balance between growth and stability. This mix supports the portfolio's moderate risk profile, with equities offering growth potential and bonds providing a buffer against market downturns. However, the heavy emphasis on technology stocks within the equity portion increases sector-specific risk, which might not be fully mitigated by the bonds and cash equivalents.

Sectors Info

  • Technology
    33%
  • Telecommunications
    11%
  • Consumer Discretionary
    8%
  • Consumer Staples
    4%
  • Health Care
    4%
  • Industrials
    2%
  • Utilities
    1%
  • Basic Materials
    1%

With 33% of the portfolio in technology, followed by smaller allocations to communication services and consumer cyclicals, the sectoral allocation underscores a growth-oriented strategy. However, this concentration also increases vulnerability to sector-specific risks, such as regulatory changes or market sentiment shifts. Diversifying across more sectors could reduce volatility and improve resilience against market fluctuations.

Regions Info

  • North America
    63%
  • Europe Developed
    1%

The geographic allocation is predominantly North American (63%), with minimal exposure to developed Europe (1%) and no investment in emerging markets or other regions. This concentration in a single region, while potentially capitalizing on the growth of the U.S. market, limits exposure to global growth opportunities and diversification benefits that international markets might offer.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    23%
  • Mid-cap
    7%

The portfolio's market capitalization breakdown—35% in mega-cap, 23% in large-cap, and 7% in mid-cap stocks—indicates a preference for established, large companies, particularly in the tech sector. While this may offer stability and lower volatility compared to smaller caps, it also limits exposure to the potentially higher growth rates of smaller, emerging companies.

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's expected return of 2.76%, based on optimization models, suggests room for improvement in achieving a more efficient risk-return balance. Adjusting asset allocation to include a wider range of sectors and geographic regions could enhance diversification and potentially increase expected returns for the same level of risk.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Invesco QQQ Trust 0.60%
  • iShares® 0-3 Month Treasury Bond ETF 4.70%
  • Weighted yield (per year) 1.81%

The portfolio's overall dividend yield of 1.81% reflects a balance between the higher yields from the bond ETFs and the lower yield from the tech-heavy QQQ ETF. While the yield contributes to the portfolio's income, the primary focus appears to be on capital appreciation, particularly through equity investments.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Invesco QQQ Trust 0.20%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Weighted costs total (per year) 0.14%

With a total expense ratio (TER) of 0.14%, the portfolio benefits from relatively low costs, which is commendable. Lower costs can significantly enhance long-term returns by reducing the drag on performance. This efficiency in cost management is a positive aspect of the portfolio, aligning with best practices for maximizing investor returns.

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