Balanced yet tech-heavy portfolio with a strong emphasis on US equities and bonds

Report created on May 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is heavily weighted towards the Invesco QQQ Trust, constituting 65% of the allocation, which significantly tilts it towards technology and large-cap stocks. The remaining portions are allocated to bond ETFs, with 25% in the Vanguard Total Bond Market Index Fund ETF Shares and 10% in the iShares® 0-3 Month Treasury Bond ETF. This composition suggests a blend of growth orientation through equities and stability through bonds, albeit with a single-focused diversification strategy.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.92%, with a maximum drawdown of -29.56%. This performance indicates a strong growth potential, albeit with notable volatility. The days contributing to 90% of the returns being limited to 20 suggests significant performance spikes, characteristic of tech-heavy portfolios.

Projection Info

Using Monte Carlo simulations, which forecast future performance based on historical data, the portfolio's median expected growth is 146.4% with a wide range of outcomes. While these simulations provide valuable insights, it's crucial to remember that they are based on past trends and cannot guarantee future results.

Asset classes Info

  • Stocks
    65%
  • Bonds
    25%
  • Cash
    10%

The asset class distribution—65% stocks, 25% bonds, and 10% cash equivalents—demonstrates a balanced approach, blending growth and income. However, the heavy emphasis on technology stocks via the QQQ ETF may increase volatility and risk, underscoring the importance of understanding sector-specific dynamics.

Sectors Info

  • Technology
    33%
  • Telecommunications
    11%
  • Consumer Discretionary
    8%
  • Consumer Staples
    4%
  • Health Care
    4%
  • Industrials
    2%
  • Utilities
    1%
  • Basic Materials
    1%

The sector allocation heavily favors technology, followed by communication services and consumer cyclicals, reflecting a growth-oriented strategy. This concentration in high-growth sectors can offer significant upside but also increases susceptibility to market fluctuations, particularly in the tech sector.

Regions Info

  • North America
    63%
  • Europe Developed
    1%

With 63% allocated to North America, the portfolio has a strong domestic focus, limiting exposure to international markets and potentially missing out on global diversification benefits. This geographic concentration can amplify risks associated with the US market.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    23%
  • Mid-cap
    7%

The market capitalization breakdown shows a preference for mega and large-cap stocks, which typically offer stability and less volatility compared to smaller caps. However, this focus may limit exposure to high-growth opportunities in the mid and small-cap segments.

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 current portfolio's expected return, based on the Efficient Frontier analysis, is below the optimal portfolio's expected return of 2.76% at a similar risk level. This suggests there is room for improvement in balancing risk and return, potentially by diversifying across more sectors and geographies.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Invesco QQQ Trust 0.60%
  • iShares® 0-3 Month Treasury Bond ETF 4.70%
  • Weighted yield (per year) 1.81%

The dividend yields from the bond ETFs add an income component to the portfolio, with the Total Bond Market Index Fund and the iShares® 0-3 Month Treasury Bond ETF contributing to a total portfolio yield of 1.81%. This income can provide a buffer during market volatility, though the overall yield is modest due to the low yield from the QQQ ETF.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Invesco QQQ Trust 0.20%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) of 0.14% is relatively low, which is beneficial for long-term growth as it minimizes the drag on performance. Keeping costs low is a critical component of maximizing net returns over time.

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