A growth-focused portfolio with a strong tech tilt and U.S. market concentration

Report created on Mar 9, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio comprises three ETFs: Vanguard S&P 500 ETF (65%), Vanguard Information Technology Index Fund ETF Shares (25%), and Vanguard Total International Stock Index Fund ETF Shares (10%). The portfolio leans heavily on U.S. equities, reflecting a growth-oriented strategy. Comparatively, a typical diversified portfolio might feature a broader range of asset classes, such as bonds or real estate. By focusing primarily on equities, the portfolio aims for higher returns but also assumes greater risk. It’s essential to review whether this equity-heavy approach aligns with your financial goals and risk tolerance, especially during market downturns.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.79%, outperforming many benchmarks. A hypothetical $10,000 investment would have grown significantly over time, illustrating strong past performance. However, the maximum drawdown of -33.22% highlights potential volatility. This underscores the importance of aligning your risk tolerance with the portfolio’s historical behavior. While past performance is not indicative of future results, understanding these trends can guide expectations and risk management strategies moving forward.

Projection Info

Monte Carlo simulations project a range of potential outcomes based on historical data, offering a glimpse into future possibilities. With 1,000 simulations, the portfolio shows a 5th percentile return of 58.4% and a 50th percentile return of 474.6%. While these projections provide insights, they rely on historical data, which may not predict future market conditions. Consider using these simulations as a guide for understanding potential risks and returns, rather than guarantees. Regularly revisiting projections can help adjust strategies in response to changing market dynamics.

Asset classes Info

  • Stocks
    100%

The portfolio is 100% allocated to stocks, which can drive growth but also introduces higher volatility. Diversifying across asset classes, such as adding bonds or real estate, can mitigate risk and provide stability during market downturns. By comparing to benchmark norms, which often include a mix of asset classes, consider whether introducing additional asset types aligns with your risk tolerance and investment goals. A more balanced approach might enhance long-term returns while reducing potential drawdowns.

Sectors Info

  • Technology
    48%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Telecommunications
    7%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

With a significant 48% allocation to technology, the portfolio is heavily weighted towards this sector. While tech has driven strong returns historically, it also comes with volatility, especially during interest rate hikes. Other sectors like Financial Services (11%) and Consumer Cyclicals (9%) provide some diversification, but the tech concentration could pose risks. Consider whether this sectoral tilt aligns with your risk appetite and if a more balanced sector distribution might enhance stability and resilience against sector-specific downturns.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

The portfolio is predominantly exposed to North America (90%), with minimal allocation to other regions. This geographic concentration can limit diversification and increase vulnerability to U.S. market fluctuations. In contrast, global benchmarks often feature a more balanced regional distribution, offering exposure to diverse economic conditions. Consider whether increasing international exposure could enhance diversification, potentially reducing risk and capturing growth opportunities in emerging markets.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is heavily skewed towards mega (47%) and big (32%) companies, which are typically more stable and less volatile. However, medium (17%) and small (3%) companies, though riskier, can offer higher growth potential. This allocation aligns with a focus on stability and established companies, but consider if increasing exposure to smaller companies might provide additional growth opportunities, balancing risk and return more effectively.

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 portfolio could potentially be optimized using the Efficient Frontier, focusing on achieving the best risk-return ratio with the current assets. This involves adjusting allocations to maximize returns for a given level of risk, not necessarily diversifying across more asset classes. While the current structure is growth-oriented, consider whether slight adjustments in asset weights could enhance efficiency, aligning returns more closely with risk tolerance and investment goals.

Dividends Info

  • Vanguard Information Technology Index Fund ETF Shares 0.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.33%

The portfolio's dividend yield is 1.33%, with contributions from Vanguard S&P 500 ETF (1.30%), Vanguard Information Technology Index Fund ETF Shares (0.70%), and Vanguard Total International Stock Index Fund ETF Shares (3.10%). Dividends provide a steady income stream, which can be particularly beneficial during volatile markets. While growth-focused, consider whether increasing dividend-yielding investments aligns with your financial goals, potentially enhancing income stability and total returns over time.

Ongoing product costs Info

  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, supporting better long-term performance by minimizing costs. With Vanguard S&P 500 ETF at 0.03%, Vanguard Information Technology Index Fund ETF Shares at 0.10%, and Vanguard Total International Stock Index Fund ETF Shares at 0.08%, the portfolio benefits from cost efficiency. Maintaining low costs is crucial for maximizing net returns. Regularly reviewing and managing expenses can enhance overall performance, ensuring costs remain aligned with investment strategies.

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