Growth-oriented portfolio with high concentration in technology and financial services

Report created on Jun 10, 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 showcases a strong emphasis on equities, particularly within the technology and financial services sectors. The significant allocations to ETFs tracking major indexes like the S&P 500 and NASDAQ 100, alongside direct investments in heavyweight companies such as Berkshire Hathaway and BlackRock, indicate a growth-focused strategy. However, the portfolio's low diversity score raises concerns about concentration risk, especially given the overlap among technology-oriented ETFs and stocks.

Growth Info

Historically, this portfolio has delivered a compelling Compound Annual Growth Rate (CAGR) of 19.12%, with a maximum drawdown of -26.54%. These figures suggest that while the portfolio has experienced substantial growth, it has also faced significant volatility, likely due to its concentrated positions. The days contributing to 90% of returns being so few highlights the impact of short-term gains, underscoring the portfolio's risk profile.

Projection Info

Monte Carlo simulations, projecting future performance based on historical data, suggest a wide range of outcomes, with the median scenario offering an impressive 1,900.5% return. While these simulations provide a broad spectrum of possible futures, it's crucial to remember that they rely on past trends, which may not always predict future movements accurately. Such projections should be viewed as one of many tools in assessing potential risks and rewards.

Asset classes Info

  • Stocks
    100%

The portfolio's assets are entirely in stocks, with no allocation to bonds, cash, or alternative investments. This allocation maximizes growth potential but also increases volatility and risk, particularly in market downturns. Diversification across asset classes could provide a buffer against stock market fluctuations and contribute to a more stable performance over time.

Sectors Info

  • Technology
    36%
  • Financials
    28%
  • Consumer Discretionary
    7%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Health Care
    6%
  • Industrials
    4%
  • Energy
    3%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

With a heavy tilt towards technology and financial services, the portfolio may be more sensitive to sector-specific trends and regulatory changes affecting these industries. While these sectors have historically driven strong returns, they can also be prone to rapid shifts in investor sentiment and market dynamics. A more balanced sector allocation could mitigate risk while still capturing growth opportunities.

Regions Info

  • North America
    99%

The geographic concentration in North America, particularly the United States, reflects confidence in the US market's growth potential. However, this focus also exposes the portfolio to regional economic and political risks. Expanding geographic diversification could reduce exposure to these risks and tap into growth opportunities in other regions.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    33%
  • Mid-cap
    13%
  • Small-cap
    2%

The portfolio's emphasis on mega and large-cap stocks is consistent with its growth and risk profile, offering stability and potential for appreciation. However, the limited exposure to mid, small, and micro-cap stocks restricts opportunities for outsized gains from smaller companies, which can sometimes offer higher growth potential.

Redundant positions Info

  • Vanguard Information Technology Index Fund ETF Shares
    Invesco NASDAQ 100 ETF
    Invesco QQQ Trust
    High correlation
  • SPDR S&P 500 ETF Trust
    Vanguard S&P 500 ETF
    High correlation

The high correlation observed between several ETFs and technology stocks within the portfolio indicates redundancy, limiting diversification benefits. This overlap suggests that the portfolio's risk could be reduced without sacrificing potential returns by reallocating some assets to less correlated investments.

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.

Considering the portfolio's high correlation among certain assets, there's an opportunity for optimization. Removing or reducing overlapping positions could enhance diversification without compromising the growth objective. The potential for an optimized portfolio to achieve a higher expected return with a similar risk level underscores the value of diversification and strategic asset allocation.

Dividends Info

  • Ares Capital Corporation 8.60%
  • BlackRock Inc 1.60%
  • Altria Group 6.80%
  • Invesco QQQ Trust 0.60%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • SPDR S&P 500 ETF Trust 1.20%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.35%

The portfolio's dividend yield stands at 1.35%, contributed by both high-yield stocks like Ares Capital Corporation and Altria Group, and lower-yield ETFs. While the focus is clearly on growth, dividends provide a secondary income stream and potential for reinvestment, enhancing compounding effects. However, the overall yield could be optimized to balance income and growth objectives better.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.07%

The Total Expense Ratio (TER) of 0.07% is impressively low, especially for a portfolio with significant ETF exposure. This efficiency supports better long-term performance by minimizing the drag on returns due to fees. Keeping costs low is a commendable strategy that can significantly impact net returns over time.

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