Growth-focused portfolio with a strong tilt towards technology and dividends

Report created on Jul 31, 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 invested in two ETFs: one focused on dividend appreciation and the other on the information technology sector. With 55% in the Vanguard Dividend Appreciation Index Fund ETF Shares and 45% in the Vanguard Information Technology Index Fund ETF Shares, it demonstrates a clear emphasis on growth through technology investments and income through dividends. The allocation reflects a growth-oriented strategy with a significant sector concentration, particularly in technology, which accounts for 59% of the sector allocation. This high concentration in a single sector, coupled with the portfolio's total stock allocation, indicates a lower level of diversification.

Growth Info

The portfolio has demonstrated a strong historical performance with a Compound Annual Growth Rate (CAGR) of 17.31%. However, it's important to note that it has also experienced a significant maximum drawdown of -31.72%. This indicates that while the portfolio has the potential for high returns, it also carries a substantial risk of large losses in adverse market conditions. The days that make up 90% of returns being concentrated in just 38.0 days suggests that the portfolio's performance is highly volatile and can be significantly affected by short-term market movements.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, suggests a wide range of possible returns for this portfolio. With key percentiles indicating that the portfolio could increase anywhere from 154.3% to over 1,178.7% in the best-case scenario, the simulation underscores the portfolio's high growth potential. However, it's crucial to remember that such simulations are based on past data, and future market conditions can vary greatly. This means that while the simulation provides a useful guide, it cannot guarantee future performance.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no allocation to other asset classes such as bonds or real estate. This singular focus on equities contributes to the portfolio's high growth potential but also increases its risk, as stocks are generally more volatile than other asset classes. Diversifying across different asset classes can help manage risk by reducing the impact of stock market volatility on the portfolio's overall performance.

Sectors Info

  • Technology
    59%
  • Financials
    13%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Industrials
    6%
  • Consumer Discretionary
    3%
  • Basic Materials
    2%
  • Energy
    2%
  • Utilities
    1%
  • Telecommunications
    1%

With a significant portion of the portfolio allocated to technology and financial services, there's a notable sector concentration risk. While the tech sector can offer substantial growth opportunities, it's also prone to high volatility. The financial services sector adds a bit of balance but doesn't sufficiently mitigate the risk associated with the heavy tech exposure. Diversifying across a broader range of sectors could help smooth out returns and reduce volatility.

Regions Info

  • North America
    99%

The portfolio's geographic allocation is almost entirely focused on North America, which limits its exposure to potential growth in other regions and increases its vulnerability to regional economic downturns. Expanding the geographic diversification to include developed and emerging markets outside of North America could provide access to new growth opportunities and reduce the portfolio's risk profile.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    35%
  • Mid-cap
    13%
  • Small-cap
    5%
  • Micro-cap
    2%

The allocation across market capitalizations shows a preference for mega and big-cap stocks, which tend to be more stable and less volatile than smaller companies. However, this focus may limit the portfolio's exposure to the higher growth potential often found in medium, small, and micro-cap stocks. Considering a more balanced approach across different market caps could enhance growth prospects while managing 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.

Considering the portfolio's current allocation and risk profile, there's room for optimization towards achieving a better risk-return ratio. Utilizing the Efficient Frontier concept could help in identifying an asset allocation that offers the highest expected return for a given level of risk. This might involve diversifying more broadly across asset classes, sectors, and geographies to enhance the portfolio's resilience and potential for growth.

Dividends Info

  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.16%

The portfolio's dividend yield, combining both ETFs, stands at 1.16%, which contributes to its total return. Dividends offer a source of income, which can be particularly valuable during periods of market volatility or downturns. For investors seeking growth with a side of income, maintaining a focus on dividend-yielding investments is beneficial, but it's also important to balance this with investments in non-dividend-paying growth sectors to maximize overall portfolio growth potential.

Ongoing product costs Info

  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.08%

With total portfolio costs averaging 0.08%, the portfolio benefits from relatively low expenses, which is commendable. Lower costs mean more of the investment returns are retained by the investor, enhancing long-term growth. It's crucial to continue monitoring these costs, as even small increases can significantly impact returns over time.

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