Growth-focused portfolio with heavy tech exposure and moderate global diversification

Report created on Jul 20, 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 is heavily weighted towards equity ETFs, emphasizing technology and growth sectors. With 30% in a broad market S&P 500 ETF, 15% in a tech-centric QQQ ETF, and another 10% each in innovation, semiconductor, and growth index ETFs, it leans significantly towards high-growth potential areas. The inclusion of a 10% allocation to an international stock ETF introduces some geographic diversification, though the portfolio remains predominantly US-centric. The diversification score suggests a moderate level of variety across assets, but the heavy concentration in tech-related ETFs indicates a specific sector focus.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 16.86%, with a significant maximum drawdown of -37.24%. This performance demonstrates strong growth potential but also underscores the risk of substantial volatility, as evidenced by the concentrated days contributing to most returns. The portfolio's high growth has come with periods of significant downturns, highlighting the importance of understanding one's risk tolerance when invested in growth-oriented ETFs.

Projection Info

Monte Carlo simulations, which use historical data to forecast potential future outcomes, suggest a wide range of possible performances for this portfolio. With the 50th percentile projection showing a 690.5% increase, there's a strong indication of growth potential. However, the spread from the 5th to the 67th percentile underscores the inherent uncertainty and risk, especially considering the portfolio's tech-heavy focus. These projections are useful for setting expectations but remember, they are not guarantees.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stock ETFs, reflecting a pure equity strategy with no allocation to bonds, cash, or alternative investments. This asset class concentration aligns with a growth-focused approach but lacks the balance that fixed income or other assets could provide, particularly in reducing volatility and risk. For investors seeking growth, this is expected, yet a consideration of diversification across asset classes could enhance risk-adjusted returns.

Sectors Info

  • Technology
    38%
  • Consumer Discretionary
    11%
  • Financials
    10%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

With 38% in technology and significant investments in consumer cyclicals, financial services, and communication services, the portfolio is positioned to benefit from growth in these dynamic sectors. However, this concentration also exposes it to sector-specific downturns, such as those that can occur with rapid interest rate changes affecting tech stocks. Balancing this with more defensive sectors or diversifying within technology sub-sectors could mitigate some volatility without drastically altering the growth trajectory.

Regions Info

  • North America
    88%
  • Europe Developed
    6%
  • Asia Developed
    2%
  • Asia Emerging
    2%
  • Japan
    2%

The geographic allocation heavily favors North America (88%), with minimal exposure to developed and emerging markets elsewhere. This US-centric approach has historically offered strong growth opportunities, especially in the tech sector, but limits potential gains from global economic growth. Increasing exposure to developed Europe, Asia, or emerging markets could offer broader diversification and access to non-US growth stories.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    37%
  • Mid-cap
    19%
  • Small-cap
    3%
  • Micro-cap
    1%

The focus on mega (40%) and big (37%) cap stocks provides a foundation of stability and growth potential, reflecting well-established companies. However, the relatively smaller allocation to medium, small, and micro caps means the portfolio may miss out on the higher growth potential these smaller companies can offer. Considering a slight increase in small or medium cap exposure could introduce more growth opportunities, albeit with increased risk.

Redundant positions Info

  • Invesco QQQ Trust
    Vanguard Growth Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation observed among the QQQ Trust, Vanguard Growth Index Fund, and S&P 500 ETF indicates overlapping exposures, particularly in large-cap tech stocks. This redundancy reduces the portfolio's diversification benefits, making it more susceptible to sector-specific downturns. Reallocating from highly correlated assets to less correlated ones within or outside the technology sector could improve diversification without significantly compromising growth objectives.

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 configuration suggests room for optimization, particularly by addressing the overlap in highly correlated assets. This redundancy limits diversification and exposes the portfolio to unnecessary risk. Shifting towards a more balanced allocation, possibly by incorporating assets with lower correlation or different growth drivers, could enhance the portfolio's risk-return profile. This strategic adjustment aims to maintain growth potential while mitigating volatility.

Dividends Info

  • Invesco QQQ Trust 0.40%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • VanEck Semiconductor ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.35%

The portfolio's total dividend yield of 1.35% contributes to its total returns, with the Schwab U.S. Dividend Equity ETF and Vanguard Total International Stock Index Fund ETF providing higher yields. While dividends are not the primary focus of this growth-oriented portfolio, they offer a passive income stream and potential for reinvestment. Balancing growth and income-generating assets could provide a more stable return profile, especially in volatile markets.

Ongoing product costs Info

  • ARK Innovation ETF 0.75%
  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.17%

With a Total Expense Ratio (TER) of 0.17%, the portfolio benefits from relatively low costs, enhancing long-term returns. The ARK Innovation ETF is an outlier with a higher expense ratio, which is common for actively managed, specialized ETFs. Monitoring and possibly minimizing costs where feasible, without compromising the strategic focus, can further improve net performance.

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