A growth-focused portfolio with significant tech exposure and limited geographic diversification

Report created on Apr 17, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio consists of two ETFs: Vanguard Total Stock Market Index Fund ETF Shares at 70% and Invesco NASDAQ 100 ETF at 30%. This allocation emphasizes a focus on U.S. equities, with a strong inclination towards large-cap stocks. Compared to a typical benchmark, this portfolio is less diversified, concentrating heavily on U.S. markets and large-cap stocks. This composition suggests a preference for growth and capital appreciation. For a more balanced approach, consider including other asset types like bonds or international equities, which can help reduce volatility and enhance diversification.

Growth Info

Historically, the portfolio has performed well with a CAGR of 11.64%, indicating strong growth over time. However, it has also experienced a max drawdown of -28.19%, suggesting significant volatility during market downturns. Compared to standard benchmarks, this performance is impressive, particularly for growth-oriented portfolios. It's important to note that past performance does not guarantee future results. To mitigate potential losses in future downturns, consider diversifying the portfolio further or incorporating defensive assets.

Projection Info

Forward projections using Monte Carlo simulations show a positive outlook, with 963 out of 1,000 simulations resulting in gains. The median expected return is 320.4%, with an annualized return of 12.74%. However, these projections are based on historical data, which may not accurately predict future market conditions. Monte Carlo simulations use historical data to simulate a range of possible outcomes, offering a glimpse into potential future performance. To enhance the robustness of these projections, regularly update the portfolio and consider varying market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no exposure to other asset classes like bonds or real estate. This lack of diversification can lead to increased volatility and risk. In comparison to a balanced portfolio, this allocation is heavily weighted towards equities, which may be suitable for growth but can be risky in turbulent markets. To improve diversification and potentially stabilize returns, consider adding other asset classes that may perform differently under various market conditions.

Sectors Info

  • Technology
    37%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Financials
    10%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

There is a notable concentration in technology, which makes up 37% of the portfolio. Other sectors like consumer cyclicals and communication services also have significant representations. Compared to common benchmarks, this sector allocation is tech-heavy, which can lead to higher volatility, especially during periods of interest rate hikes. To mitigate sector-specific risks, consider diversifying across more sectors, reducing reliance on technology, and spreading exposure to defensive sectors like utilities or consumer staples.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio's geographic allocation is heavily skewed towards North America, with 99% exposure. This limited geographic diversification can increase susceptibility to regional economic downturns. Compared to global benchmarks, the portfolio lacks exposure to international markets, which can provide growth opportunities and risk diversification. To enhance geographic diversification, consider adding international equities, particularly from emerging markets, which may offer higher growth potential and reduce reliance on the U.S. market.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio is predominantly invested in large-cap stocks, with 45% in mega caps and 32% in big caps. This concentration in large companies can offer stability and lower volatility but may limit growth potential compared to smaller companies. Compared to a more balanced market capitalization distribution, this portfolio leans towards established companies. To capture growth from smaller, potentially high-growth companies, consider increasing exposure to mid-cap or small-cap stocks, which can provide diversification and enhance long-term 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.

The portfolio's current allocation may not be optimized along the Efficient Frontier, which seeks the best possible risk-return ratio. The Efficient Frontier is a concept that helps investors maximize returns for a given level of risk. By adjusting the weights of the existing assets, it may be possible to achieve a more efficient portfolio. Consider using optimization tools to explore potential rebalancing strategies that could improve the portfolio's risk-return profile without compromising growth objectives.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Weighted yield (per year) 1.26%

The portfolio has a total dividend yield of 1.26%, with the Vanguard ETF contributing 1.50% and the Invesco ETF 0.70%. While dividends provide a steady income stream, the yield is relatively modest for a growth-focused portfolio. Dividends can be an important component of total returns, especially during periods of market volatility. To enhance income, consider reallocating a portion of the portfolio to higher-yielding assets or dividend-focused funds, while balancing the need for growth.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.07%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.07%. The Vanguard ETF has a TER of 0.03%, while the Invesco ETF is at 0.15%. These low costs are beneficial for long-term performance, as they minimize the drag on returns. Compared to industry averages, the portfolio's expenses are well-managed. Maintaining this cost efficiency is crucial, so continue to monitor expenses and consider lower-cost alternatives if the current costs increase.

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