A growth-focused portfolio with high tech exposure and minimal international diversification
Report created on Jul 22, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
QQ Invesco QQQ Trust
QQQ - US46090E1038 50.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 50.00%
This portfolio is split evenly between the Invesco QQQ Trust and the Vanguard Total Stock Market Index Fund ETF Shares, indicating a strong focus on the stock market with a particularly heavy emphasis on technology and large-cap companies. The portfolio's lack of diversity across asset classes and limited geographical spread are notable, with an overwhelming concentration in North American equities. This structure suggests an aggressive growth strategy, leveraging the potential high returns of the tech sector and the broad market exposure provided by a total stock market index.
Growth
With a Compound Annual Growth Rate (CAGR) of 16.93% and a maximum drawdown of -31.16%, the portfolio has demonstrated significant growth potential albeit with notable volatility. The days that make up 90% of returns being concentrated in just 36.0 days highlights the portfolio's reliance on short, sharp gains, typical of growth-focused investments in volatile sectors like technology. This performance, while impressive, underscores the risk associated with such a concentrated strategy.
Projection
Monte Carlo simulations project a wide range of outcomes, with the median simulation suggesting an 809.3% increase in value. This optimistic median, alongside a high percentage of simulations showing positive returns, reflects the potential for substantial growth. However, the broad range between the 5th and 67th percentiles (138.4% to 1,142.1%) illustrates the high level of uncertainty and risk in the portfolio's future performance, emphasizing the importance of understanding and accepting the potential for wide fluctuations in returns.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely in stocks, providing no cushion against market downturns through diversification into other asset classes like bonds or real estate. This all-equity strategy maximizes growth potential but also increases susceptibility to market volatility. Diversifying across different asset classes can reduce risk without significantly compromising potential returns, making the portfolio more resilient during economic downturns.
Sectors
- Technology 42%
- Telecommunications 13%
- Consumer Discretionary 12%
- Health Care 7%
- Financials 7%
- Industrials 6%
- Consumer Staples 5%
- Utilities 2%
- Energy 2%
- Basic Materials 2%
- Real Estate 1%
Sector allocation is heavily weighted towards technology, with significant investments also in communication services and consumer cyclicals. This concentration in high-growth sectors aligns with the portfolio's aggressive growth strategy but increases vulnerability to sector-specific downturns. Diversifying more evenly across sectors could mitigate some of this risk while still capturing growth opportunities in other areas of the market.
Regions
- North America 99%
- Europe Developed 1%
Geographic exposure is almost exclusively in North America, with a negligible presence in developed European markets. This geographic concentration limits exposure to potential growth in emerging markets and other developed regions, which could offer diversification benefits and reduce the portfolio's overall volatility. Expanding geographic diversification could tap into growth opportunities outside of North America and hedge against region-specific economic downturns.
Market capitalization
- Mega-cap 48%
- Large-cap 32%
- Mid-cap 15%
- Small-cap 3%
- Micro-cap 1%
The focus on mega and big cap stocks (80% combined) suits the portfolio's growth and risk profile but limits exposure to the potentially higher growth rates of medium, small, and micro-cap stocks. Including a broader range of market capitalizations could enhance returns and diversification, as smaller companies often outperform larger ones in bull markets, albeit with increased risk.
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's current allocation places it on a higher end of the risk-return spectrum, potentially limiting its efficiency in terms of the Efficient Frontier, which seeks to maximize returns for a given level of risk. Adjusting the allocation to introduce assets with lower correlation and different risk-return profiles could move the portfolio closer to the Efficient Frontier, optimizing its performance by improving the balance between risk and return.
Dividends
- Invesco QQQ Trust 0.40%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Weighted yield (per year) 0.80%
The portfolio's dividend yield of 0.80% reflects a focus on capital appreciation over income generation, consistent with its growth orientation. While dividends contribute to total returns, the relatively low yield underscores the portfolio's reliance on stock price appreciation for growth. Investors seeking income alongside growth might consider assets with higher dividend yields or dividend growth potential.
Ongoing product costs
- Invesco QQQ Trust 0.20%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.12%
With a total expense ratio (TER) of 0.12%, the portfolio benefits from relatively low costs, supporting better long-term performance. Lower costs mean more of the portfolio's returns are retained by the investor, a crucial factor in compounding growth over time. This cost efficiency is a strong aspect of the portfolio's structure, aligning well with best practices for maximizing investment returns.
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