Tech-focused growth portfolio with high exposure to US markets and low diversification

Report created on Aug 3, 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 is heavily weighted towards technology ETFs, comprising 60% of its total allocation, with the rest spread across a mix of broad-market US equity ETFs. Such concentration in a single sector, while potentially lucrative during tech booms, introduces significant volatility and risk. The inclusion of broad-market ETFs does offer some diversification, but the overall portfolio remains highly exposed to the performance of the tech sector and the US market.

Growth Info

Historically, this portfolio has demonstrated a strong Compound Annual Growth Rate (CAGR) of 18.64%, outpacing many traditional growth portfolios. However, it's essential to note the maximum drawdown of -36.47%, indicating substantial volatility. The days contributing to 90% of returns being concentrated in just 36 days further underscores this volatility, suggesting that while returns can be high, they come with considerable risk.

Projection Info

Monte Carlo simulations, which use historical data to forecast future performance, show a wide range of outcomes for this portfolio, with a median projected growth of 877.4%. While the simulations predict high growth potential, they also reflect the portfolio's high risk, with a significant spread between the 5th and 67th percentiles. It's crucial to remember that these projections are not guarantees but tools to help visualize potential risk and reward.

Asset classes Info

  • Stocks
    100%

The portfolio's assets are exclusively in stocks, with no allocation to bonds, real estate, or other asset classes that could provide income or reduce volatility. This singular focus on equities, particularly within the tech sector, amplifies both the potential for high returns and the risk of significant losses, especially during market downturns.

Sectors Info

  • Technology
    57%
  • Telecommunications
    8%
  • Health Care
    7%
  • Financials
    7%
  • Consumer Discretionary
    7%
  • Industrials
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

The tech sector's 57% allocation far exceeds that of any other sector, with the nearest being communication services at 8%. This heavy concentration in technology stocks may lead to high returns during periods of tech industry growth but can also result in substantial losses when the sector faces downturns. Diversifying across more sectors could mitigate some of this risk.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

With 99% of the portfolio allocated to North American assets, there's a pronounced geographic concentration risk. Such a heavy focus on a single region can limit exposure to potential growth in other global markets and increase susceptibility to regional economic downturns. Expanding into international markets could provide a more balanced geographic exposure.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    4%
  • Micro-cap
    2%

The portfolio's emphasis on mega (43%) and big (33%) cap stocks provides a foundation of established, potentially less volatile companies. However, the limited exposure to small (4%) and micro (2%) cap stocks restricts opportunities for outsized growth from emerging companies. A more balanced allocation across market caps could offer a better risk-reward profile.

Redundant positions Info

  • Fidelity® MSCI Information Technology Index ETF
    Vanguard Information Technology Index Fund ETF Shares
    Invesco QQQ Trust
    Technology Select Sector SPDR® Fund
    iShares U.S. Technology ETF
    High correlation
  • Vanguard S&P 500 ETF
    iShares Core S&P Total U.S. Stock Market ETF
    SPDR S&P 500 ETF Trust
    High correlation

The high correlation among the tech-focused ETFs suggests redundancy, with little additional diversification benefit from holding multiple similar ETFs. Similarly, the broad-market ETFs also show significant overlap. Reducing holdings in highly correlated assets could streamline the portfolio and enhance its overall efficiency.

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.

Optimizing this portfolio involves reducing exposure to highly correlated tech ETFs and increasing diversification across sectors, geographies, and market capitalizations. Aligning the portfolio more closely with the Efficient Frontier could improve the risk-return ratio by maximizing returns for a given level of risk.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • iShares Core S&P Total U.S. Stock Market ETF 1.20%
  • iShares U.S. Technology ETF 0.20%
  • Invesco QQQ Trust 0.50%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • SPDR S&P 500 ETF Trust 1.10%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Technology Select Sector SPDR® Fund 0.60%
  • Weighted yield (per year) 0.96%

The portfolio's total dividend yield of 0.96% contributes to its total return but is modest due to the heavy emphasis on growth-oriented tech ETFs, which typically offer lower yields. For investors seeking income, reallocating a portion of the portfolio towards higher-yielding assets could provide a more balanced income-growth approach.

Ongoing product costs Info

  • ARK Innovation ETF 0.75%
  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • iShares Core S&P Total U.S. Stock Market ETF 0.03%
  • iShares U.S. Technology ETF 0.40%
  • Invesco QQQ Trust 0.20%
  • 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%
  • Technology Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.18%

The portfolio's average Total Expense Ratio (TER) of 0.18% is relatively low, which is beneficial for long-term growth as lower costs translate to higher net returns. However, the ARK Innovation ETF's higher fee of 0.75% stands out. Regularly reviewing costs, especially for funds with higher fees, can ensure they are justified by performance.

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