Growth-focused portfolio with high concentration in healthcare and technology sectors
Report created on Jul 23, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 62.84% -
LL Eli Lilly and Company
LLY - US5324571083 24.02% -
VU Vanguard Growth Index Fund ETF Shares
VUG - US9229087369 13.14%
This portfolio predominantly consists of two ETFs and a single common stock, with a heavy emphasis on the Vanguard S&P 500 ETF. The Vanguard Growth Index Fund ETF Shares and Eli Lilly and Company, a healthcare giant, round out the portfolio. The allocation heavily favors large-cap stocks, with a significant tilt towards healthcare and technology sectors. This composition indicates a growth-oriented strategy but raises concerns about diversification due to its concentrated nature.
Growth
Historically, the portfolio has shown impressive performance, with a Compound Annual Growth Rate (CAGR) of 18.30%. The maximum drawdown of -29.15% suggests periods of significant volatility, likely due to the high concentration in specific sectors and stocks. The days contributing most to returns highlight the portfolio's dependency on short-term gains, which may not be sustainable long-term.
Projection
Forward-looking projections, based on a Monte Carlo simulation, suggest a wide range of outcomes but lean towards positive growth, with a median projected increase of 1,101.8%. While encouraging, it's important to remember that these simulations rely on historical data, which is not a guarantee of future performance. The high percentage of simulations with positive returns underscores potential growth but also emphasizes the need for caution regarding volatility and risk.
Asset classes
- Stocks 100%
The portfolio is entirely invested in stocks, with no allocation to other asset classes like bonds or real estate. This singular focus enhances growth potential but also increases risk, particularly in market downturns. Diversifying across different asset classes can provide a buffer against stock market volatility and reduce overall portfolio risk.
Sectors
- Health Care 31%
- Technology 27%
- Financials 10%
- Consumer Discretionary 9%
- Telecommunications 8%
- Industrials 6%
- Consumer Staples 4%
- Energy 2%
- Utilities 2%
- Real Estate 2%
- Basic Materials 1%
The sectoral allocation shows a strong preference for healthcare and technology, which can be both a strength and a vulnerability. While these sectors offer growth opportunities, especially in innovative and emerging technologies and healthcare advancements, they also expose the portfolio to sector-specific downturns. Diversifying across a broader range of sectors could mitigate this risk.
Regions
- North America 100%
Geographic exposure is solely to North America, missing out on potential growth opportunities in developed and emerging markets outside the U.S. This lack of international diversification can limit the portfolio's growth potential and increase its susceptibility to region-specific economic and political risks.
Market capitalization
- Mega-cap 62%
- Large-cap 25%
- Mid-cap 13%
- Small-cap 1%
The focus on mega and large-cap stocks aligns with the portfolio's growth and risk profile, offering stability and potential for appreciation. However, the minimal exposure to mid and small-cap stocks means missing out on the potentially higher growth rates these companies can offer, albeit with increased volatility.
Redundant positions
-
High correlationVanguard S&P 500 ETFVanguard Growth Index Fund ETF Shares
The high correlation between the Vanguard S&P 500 ETF and Vanguard Growth Index Fund ETF Shares suggests redundancy, limiting the diversification benefits of holding both. Diversification across less correlated 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.
Optimizing the portfolio involves addressing the high correlation between assets and the lack of diversification across asset classes, sectors, and geographies. Utilizing the Efficient Frontier could identify an allocation that offers the best possible risk-return ratio, potentially improving both the portfolio's performance and its resilience against market fluctuations.
Dividends
- Eli Lilly and Company 0.70%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Growth Index Fund ETF Shares 0.40%
- Weighted yield (per year) 0.97%
The overall dividend yield of the portfolio is modest, reflecting its growth orientation. While dividends contribute to total returns, the primary focus here appears to be on capital appreciation. Investors seeking income in addition to growth might consider a more balanced approach, including higher-yielding assets.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Growth Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.02%
The portfolio's costs are impressively low, with total expense ratios (TER) well below industry averages. This cost efficiency supports better long-term performance by minimizing the drag on returns. Continuing to prioritize low-cost investments will be beneficial for maintaining and enhancing portfolio growth.
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