Growth-oriented portfolio with high concentration in tech and consumer cyclicals

Report created on Jul 28, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio exhibits a strong focus on growth, with significant allocations in individual tech and consumer cyclical stocks, alongside broad market ETFs. The heavy concentration in a few high-performing stocks, such as Apple and Netflix, combined with foundational ETFs like the Vanguard Total Stock Market Index Fund, suggests a strategy aiming for high growth. However, this approach inherently carries higher volatility and risk, given the portfolio's lack of diversification across sectors and asset classes.

Growth Info

Historical performance showcases a robust Compound Annual Growth Rate (CAGR) of 20.51%, though it's accompanied by a substantial maximum drawdown of -43.03%. This volatility is indicative of the portfolio's aggressive growth strategy, which, while yielding high returns, also exposes investors to significant market risk. The days contributing to 90% of returns being so few highlights the portfolio's dependency on short, sharp gains, underscoring the importance of timing in this investment approach.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, from a 5th percentile loss of -43.2% to a 67th percentile gain of over 1000%. These projections, while illustrating the potential for extraordinary gains, also underscore the high risk of significant losses. Investors should understand that such simulations are based on historical data, which cannot guarantee future performance, especially in a portfolio with high volatility.

Asset classes Info

  • Stocks
    88%
  • Cash
    11%

The portfolio's asset allocation leans heavily towards stocks (88%), with a minor cash component (11%) and no bond investments. This allocation supports the portfolio's growth-oriented strategy but lacks in providing a cushion against market downturns. Diversifying into bonds or other less volatile asset classes could offer better risk-adjusted returns, especially during periods of stock market volatility.

Sectors Info

  • Technology
    30%
  • Consumer Discretionary
    24%
  • Telecommunications
    15%
  • Financials
    5%
  • Health Care
    4%
  • Industrials
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Real Estate
    1%
  • Utilities
    1%
  • Basic Materials
    1%

Sector allocation reveals a strong tilt towards technology and consumer cyclicals, constituting over half of the portfolio. This concentration in high-growth sectors can lead to significant returns during bull markets but may also increase the portfolio's susceptibility to sector-specific downturns. Diversifying across a broader range of sectors could mitigate some of this risk while still allowing for substantial growth potential.

Regions Info

  • North America
    88%

Geographic exposure is heavily concentrated in North America (88%), with no investments in developed European or Asian markets, nor in emerging markets. This geographic concentration limits global diversification and exposes the portfolio to regional economic and political risks. Expanding into international markets could provide additional growth opportunities and reduce the portfolio's overall risk profile.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    32%
  • Mid-cap
    7%
  • Small-cap
    2%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega (46%) and big (32%) cap stocks, which is typical for growth-focused investors seeking stability and potential for significant returns. However, the minimal exposure to medium, small, and micro-cap stocks limits opportunities for outsized gains from smaller companies. Increasing diversification across different market caps could enhance returns and reduce volatility.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates redundancy within the portfolio, limiting its diversification benefits. Removing or reducing exposure to overlapping assets could improve the portfolio's overall efficiency by decreasing unnecessary exposure to similar market movements.

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 reducing the portfolio's redundancy by addressing the high correlation between certain ETF holdings. Adjusting the asset allocation for better diversification across sectors, geographies, and asset classes could also improve the portfolio's risk-return profile. Utilizing the Efficient Frontier concept could help in identifying the optimal balance between risk and return, though it's important to remember that this model is based on historical data and assumptions.

Dividends Info

  • Apple Inc 0.50%
  • iShares® 0-3 Month Treasury Bond ETF 4.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.08%

Dividend yields in this portfolio contribute modestly to total returns, with a combined yield of 1.08%. For growth-oriented investors, reinvesting these dividends could compound growth over time. However, those seeking income might consider reallocating towards assets with higher dividend yields or diversifying into dividend-focused funds.

Ongoing product costs Info

  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.02%

The portfolio's overall cost is impressively low, with a Total Expense Ratio (TER) of just 0.02%. This efficient cost structure maximizes net returns to the investor, which is crucial for long-term growth. Maintaining low costs while possibly diversifying further could continue to enhance the portfolio's performance.

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