A growth-focused portfolio with strong emphasis on US equities and technology sector

Report created on Aug 7, 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 US equities, particularly in the technology sector, with significant allocations in the Vanguard S&P 500 ETF and the Invesco S&P 500® Momentum ETF. The presence of specific technology stocks, Microsoft and NVIDIA, further accentuates this focus. The portfolio's diversification is low, as indicated by its diversification score, with all investments tied to the stock market and a heavy concentration in a few sectors.

Growth Info

Historically, the portfolio has shown impressive growth with a Compound Annual Growth Rate (CAGR) of 23.25%. However, it's essential to note the maximum drawdown of -43.58%, which underscores the volatility and risk associated with this high-growth approach. The days contributing to 90% of returns are relatively few, highlighting the portfolio's performance is driven by significant market movements on limited days.

Projection Info

Using Monte Carlo simulations, the forward projection offers a wide range of potential outcomes, with the median scenario suggesting substantial growth. However, the reliance on historical data for these projections means past performance is not a reliable indicator of future results. It's crucial to consider this uncertainty when planning long-term investment strategies.

Asset classes Info

  • Stocks
    100%

The portfolio's asset class is exclusively stocks, lacking in bonds or other asset types that could provide balance during market downturns. This singular focus on equities increases the portfolio's risk profile, especially considering its lean towards high-growth sectors.

Sectors Info

  • Technology
    37%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    6%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

With 37% allocated to technology, the portfolio is heavily exposed to the volatility of the tech sector. While this has historically offered high returns, it also increases risk, particularly in market corrections or shifts away from tech. The spread across other sectors like financial services and consumer cyclicals is less pronounced, which could limit diversification benefits.

Regions Info

  • North America
    100%

The geographic allocation is entirely within North America, missing out on potential growth and diversification opportunities in developed European or emerging Asian markets. This concentration in a single region can amplify risks related to local economic or political events.

Market capitalization Info

  • Mega-cap
    54%
  • Large-cap
    31%
  • Mid-cap
    14%
  • Small-cap
    1%

The focus on mega and big-cap stocks, while contributing to stability and potential for growth, limits exposure to the potentially higher growth rates of medium, small, or micro-cap stocks. This skew may reduce overall portfolio volatility but also caps the upside from smaller companies' growth.

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 suggests redundancy, as these investments often move in tandem, offering limited diversification benefits. Reducing overlap could help in achieving a more balanced risk-return profile.

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.

To optimize risk vs. return, the portfolio could benefit from diversifying beyond highly correlated assets and increasing its exposure to different asset classes, sectors, and geographies. This approach would aim to achieve a more efficient frontier, balancing risk and return more effectively.

Dividends Info

  • Microsoft Corporation 0.60%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 0.93%

The portfolio's dividend yield sits at 0.93%, which is relatively modest. Given the growth orientation, this is expected, as the focus is more on capital appreciation. However, incorporating assets with higher dividend yields could provide a steady income stream, adding a layer of stability.

Ongoing product costs Info

  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is notably low at 0.06%, which is beneficial for long-term growth as it minimizes the drag on returns. Keeping costs low is a crucial aspect of maximizing net returns, and this portfolio aligns well with this principle.

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