Growth-oriented portfolio with a strong focus on technology and US markets
Report created on Jul 22, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 40.00% -
QQ Invesco QQQ Trust
QQQ - US46090E1038 30.00% -
VT Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 20.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 10.00%
This portfolio is heavily weighted towards equity ETFs, with significant allocations to the Vanguard S&P 500 ETF, Invesco QQQ Trust, and Vanguard Total World Stock Index Fund ETF Shares, followed by the Schwab U.S. Dividend Equity ETF. This composition suggests a growth-focused strategy, leveraging the broad market exposure of the S&P 500 and the tech-heavy QQQ Trust. The inclusion of a global stock index fund and a dividend equity ETF adds a layer of diversification, though the overall portfolio is still predominantly US-centric and tech-oriented.
Growth
Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 15.30%, with a maximum drawdown of -31.71%. This performance indicates a high growth potential but also underscores the risk of significant value fluctuations. The days contributing to 90% of returns being concentrated in just 34 days highlight the portfolio's vulnerability to market volatility, typical of growth-focused investments.
Projection
Forward-looking projections, based on Monte Carlo simulations, suggest a wide range of outcomes, with the 50th percentile at a 549.3% return. However, it's important to note that such projections rely on historical data and cannot predict future market conditions accurately. The high number of simulations with positive returns (992 out of 1,000) does indicate a strong likelihood of positive future performance but should be approached with caution.
Asset classes
- Stocks 100%
The portfolio's asset class composition is exclusively stocks, which aligns with its growth profile but exposes it to higher market risk compared to portfolios with a mix of asset classes like bonds or real estate. This concentration in stocks, particularly in technology and US markets, may lead to higher volatility, underscoring the need for careful risk management.
Sectors
- Technology 35%
- Consumer Discretionary 12%
- Telecommunications 11%
- Financials 10%
- Health Care 9%
- Industrials 8%
- Consumer Staples 7%
- Energy 4%
- Basic Materials 2%
- Utilities 2%
- Real Estate 1%
Sector allocation reveals a heavy emphasis on technology, followed by consumer cyclicals, communication services, and financial services. This sector concentration enhances the portfolio's growth prospects but also increases its sensitivity to sector-specific risks. Diversifying into more defensive sectors or broadening exposure to underrepresented sectors could mitigate this risk.
Regions
- North America 92%
- Europe Developed 4%
- Asia Emerging 1%
- Japan 1%
- Asia Developed 1%
Geographic exposure is predominantly in North America (92%), with minimal exposure to international markets. This concentration benefits from the robust performance of US markets but limits global diversification. Increasing allocations to developed European and emerging Asian markets could provide broader exposure to global growth opportunities and reduce geographic risk.
Market capitalization
- Mega-cap 44%
- Large-cap 36%
- Mid-cap 18%
- Small-cap 2%
The portfolio's market capitalization breakdown shows a strong preference for mega and big-cap stocks, which typically offer stability and steady growth. However, the relatively small allocation to small and micro-cap stocks limits potential exposure to high-growth opportunities in these segments. Consideration could be given to slightly increasing the small-cap allocation to enhance growth potential.
Redundant positions
-
High correlationVanguard Total World Stock Index Fund ETF SharesVanguard S&P 500 ETF
The high correlation between the Vanguard Total World Stock Index Fund ETF Shares and the Vanguard S&P 500 ETF suggests redundancy, as both funds cover many of the same large-cap, US-based companies. Reducing overlap by reallocating from one to more specialized or geographically diverse funds could improve diversification benefits.
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.
Optimization efforts should initially focus on addressing the high correlation between certain assets to enhance diversification without significantly altering the portfolio's growth orientation. Exploring less correlated, yet growth-oriented assets or those offering exposure to different sectors or geographies could improve the portfolio's risk-return profile.
Dividends
- Invesco QQQ Trust 0.40%
- Schwab U.S. Dividend Equity ETF 3.80%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total World Stock Index Fund ETF Shares 1.70%
- Weighted yield (per year) 1.32%
The portfolio's dividend yield, averaging 1.32%, contributes to its total return, with the Schwab U.S. Dividend Equity ETF providing the highest yield. While the focus is clearly on growth, dividends offer a source of steady income, which can be particularly beneficial during market downturns or for reinvestment purposes.
Ongoing product costs
- Invesco QQQ Trust 0.20%
- Schwab U.S. Dividend Equity ETF 0.06%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.09%
The portfolio's total expense ratio (TER) of 0.09% is impressively low, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, especially in growth-oriented portfolios where compound interest plays a significant role.
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