Balanced portfolio with a strong focus on US equities and technology sector exposure

Report created on Sep 10, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards US equities, with significant allocations in the Vanguard S&P 500 ETF, Vanguard Growth Index Fund ETF Shares, and Invesco QQQ Trust, comprising a large portion of the portfolio. This concentration suggests a focus on growth, particularly within the technology sector, as indicated by the substantial investment in Invesco QQQ Trust. The inclusion of the SPDR® S&P Aerospace & Defense ETF diversifies sector exposure slightly, while the SPDR® Gold Shares offer a hedge against market volatility. The portfolio's diversification is limited, primarily focused on single asset class (stocks) and heavily skewed towards a specific geographic region (North America).

Growth Info

Historically, the portfolio has demonstrated a strong performance with a Compound Annual Growth Rate (CAGR) of 16.85%. The maximum drawdown of -32.62% indicates a significant but not unusual level of risk for a stock-focused portfolio. The days contributing to 90% of returns being concentrated in just 41.0 days highlight the portfolio's reliance on specific high-growth periods. This performance, while impressive, should be viewed with caution as past success does not guarantee future results, especially considering the portfolio's concentrated risk profile.

Projection Info

Monte Carlo simulations, using historical data to forecast future outcomes, suggest a wide range of potential future performances for this portfolio. The simulations predict annualized returns of 18.14% on average, with a 95% chance of positive returns. However, these projections are inherently uncertain and should be considered as part of a broader decision-making framework. They highlight the portfolio's potential for high returns but also underscore the importance of understanding the associated risks.

Asset classes Info

  • Stocks
    91%
  • Other
    9%

The portfolio's asset allocation is heavily skewed towards stocks (91%), with a minor allocation to other assets (9%), and no cash holdings. This allocation underscores a growth-oriented strategy but comes with higher volatility and risk. The lack of diversification across asset classes could expose the portfolio to significant market fluctuations, particularly given the concentration in technology and defense sectors.

Sectors Info

  • Technology
    33%
  • Industrials
    19%
  • Telecommunications
    9%
  • Consumer Discretionary
    9%
  • Financials
    7%
  • Health Care
    6%
  • Consumer Staples
    3%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

Sector allocation reveals a heavy emphasis on technology, industrials, and communication services, aligning with the portfolio's growth investment strategy. However, this concentration increases susceptibility to sector-specific risks. For instance, technology stocks, while offering high growth potential, can be volatile in response to interest rate changes or economic downturns. Diversifying across more sectors could help mitigate these risks.

Regions Info

  • North America
    91%

The portfolio's geographic allocation is almost exclusively focused on North America (91%), with no exposure to developed Europe, Latin America, emerging Asia, or developed Asia. This lack of international diversification can limit growth opportunities in emerging markets and increase vulnerability to US market downturns. Expanding geographic exposure could provide a buffer against regional economic cycles and offer access to growth in other parts of the world.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    28%
  • Mid-cap
    17%
  • No data
    9%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega (41%) and big (28%) cap stocks, with lesser exposure to medium, small, and micro caps. This tilt towards larger companies is typical for investors seeking stability and lower volatility. However, incorporating more small and medium-cap stocks could enhance growth potential and diversification, albeit with increased risk.

Redundant positions Info

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

The high correlation among the Vanguard S&P 500 ETF, Vanguard Growth Index Fund ETF Shares, and Invesco QQQ Trust indicates overlapping holdings that contribute little to diversification. This redundancy not only limits the portfolio's ability to mitigate risks but also concentrates exposure to specific market movements. Reducing overlap by reallocating assets could enhance the portfolio's risk-adjusted returns.

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.

Considering the portfolio's high correlation among its largest holdings, optimization should begin with addressing the redundancy in asset selection. By diversifying across less correlated assets, the portfolio can achieve a more efficient risk-return profile. The Efficient Frontier concept suggests that an optimal mix of assets can achieve higher returns for a given level of risk. Rebalancing to include a broader range of sectors, asset classes, and geographies could move the portfolio closer to this ideal.

Dividends Info

  • Invesco QQQ Trust 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • SPDR® S&P Aerospace & Defense ETF 0.50%
  • Weighted yield (per year) 0.74%

The portfolio's dividend yield stands at an average of 0.74%, reflecting a moderate income component to complement its growth orientation. While dividends are not the primary focus of this investment strategy, they offer a stream of income that can provide a slight buffer during market downturns or be reinvested to compound growth.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • Invesco QQQ Trust 0.20%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • SPDR® S&P Aerospace & Defense ETF 0.35%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) of 0.13% is impressively low, enhancing its long-term return potential by minimizing the drag on performance due to fees. This cost efficiency is a strong point, particularly for a growth-focused portfolio, where keeping costs low is crucial to maximizing the compounding effect over time.

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