Highly concentrated tech tilted portfolio with exceptional growth and very high potential volatility
Report created on May 31, 2024Risk profile
6/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 80.00% -
NV NVIDIA Corporation
NVDA - US67066G1040 15.00% -
MS Microsoft Corporation
MSFT - US5949181045 5.00%
The structure here is extremely focused: about four-fifths in a broad US large-cap ETF and the rest in just two mega-cap tech stocks. That means only three line items drive everything, with one single company holding a particularly large role. This kind of setup is simple to track and easy to manage, but leaves little room for other styles or regions to balance things out. In practical terms, this behaves like a leveraged bet on a handful of dominant US growth names. Anyone using a structure like this would want to be very comfortable with big swings and the possibility of long stretches of underperformance.
Growth
Historically, the results have been spectacular: $1,000 grew to about $32,306, with a compound annual growth rate (CAGR) of roughly 41.7%. CAGR is the “average yearly speed” of growth over the full period. That’s nearly triple the US market and even further ahead of the global market. The flip side is a max drawdown of around -54%, meaning the portfolio once fell by more than half from a prior peak. That level of downside is emotionally and financially demanding. This history shows how concentrated growth exposure can crush benchmarks when conditions align but also exposes you to deep gut-check declines.
Asset classes
- Stocks 100%
Everything here is in stocks, with no allocation to bonds, cash-like assets, or alternatives. That pure equity stance maximizes exposure to growth but offers almost no built-in cushion during equity bear markets. In more balanced setups, other asset classes can help smooth the ride, especially when stocks drop sharply. For someone with a long time horizon and high risk tolerance, an all-stock approach can make sense, but it requires sticking through deep drawdowns. If shorter-term needs or lower volatility are priorities, even a modest allocation to more stable assets can meaningfully reduce overall portfolio swings.
Sectors
- Technology 47%
- Financials 10%
- Telecommunications 9%
- Consumer Discretionary 8%
- Health Care 8%
- Industrials 7%
- Consumer Staples 4%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector exposure is heavily tilted toward technology, which makes up nearly half of the effective allocation. The rest is broadly spread across financials, telecom, consumer segments, health care, and other areas, but tech clearly dominates. Tech-heavy structures can do extremely well in periods of innovation, falling interest rates, or strong growth expectations, which has recently been the case. However, these same exposures tend to be more sensitive when rates rise or when optimism about future earnings cools. A key takeaway is that sector risk is effectively “stacked” in one area, so sector-specific downturns could have an outsized impact.
Regions
- North America 100%
Geographically, this is a pure North American play, effectively 100% in the US. That alignment with the home market is comfortable for many investors, and the US has been a global leader over the past decade. It also means currency risk is simple for a US-based person, since assets and spending currency match. The trade-off is missing potential diversification from other economies that may perform differently across cycles. If the US experiences a period of relative underperformance, a globally diversified approach often cushions returns. Here, geographic bets are clearly concentrated, which amplifies both the benefits and risks of the US market.
Market capitalization
- Mega-cap 57%
- Large-cap 28%
- Mid-cap 14%
- Small-cap 1%
Market cap exposure is dominated by mega-cap and large-cap companies, with only a tiny slice in mid- and small-caps. That mirrors the composition of a typical broad US large-cap index, but the added single-stock positions amplify the mega-cap tilt even further. Larger companies tend to be more stable and liquid than smaller ones, yet they can still be very volatile when they’re fast-growing tech names. This cap profile means the portfolio is tied closely to the fortunes of the very largest firms in the market. If leadership rotates to smaller companies, this kind of structure might lag more diversified size exposure.
True holdings
-
Part of fund(s):
- Vanguard S&P 500 ETF
-
Part of fund(s):
- Vanguard S&P 500 ETF
-
AA Apple Inc 5.31%
Part of fund(s):- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 2.78%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 2.46%
Part of fund(s):- Vanguard S&P 500 ETF
-
AV Broadcom Inc 2.06%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 1.97%
Part of fund(s):- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 1.92%
Part of fund(s):- Vanguard S&P 500 ETF
-
TS Tesla Inc 1.54%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
-
BR Berkshire Hathaway Inc 1.26%
Part of fund(s):- Vanguard S&P 500 ETF
- Top 10 total 49.11%
Looking through the ETF, there is strong hidden concentration in the same names held directly. NVIDIA is about 21% overall and Microsoft close to 9%, combining direct shares and the ETF’s positions. Other mega-cap giants like Apple, Amazon, Alphabet, and Meta also appear meaningfully via the ETF. This overlap is important because it means there is far less diversification than the number of holdings suggests. A sharp downturn in mega-cap US tech or in just one key stock could hit the entire structure at once. Anyone using overlapping holdings like this should confirm that this concentration is truly intentional.
Factors
Factor exposure looks surprisingly balanced. Most factors — value, size, momentum, quality, yield, and low volatility — sit near “neutral,” meaning they resemble broad market averages rather than strong tilts. Factor investing targets traits like cheapness (value) or stability (low volatility) that academic research links to returns. In this case, the portfolio’s distinctive behavior comes more from concentrated stock and sector choices than from systematic factor bets. That’s actually a quiet positive: it suggests returns are driven by a small group of companies rather than hidden style tilts. The main risk driver is concentration, not obscure factor exposures.
Risk contribution
-
Vanguard S&P 500 ETF
Weight: 80.00% 65.3% -
NVIDIA Corporation
Weight: 15.00% 29.5% -
Microsoft Corporation
Weight: 5.00% 5.2%
Risk contribution shows how much each holding adds to overall ups and downs. Here, the broad ETF is 80% of the weight but only about 65% of the risk, so it’s relatively stable per dollar invested. NVIDIA is just 15% by weight yet contributes nearly 30% of total risk, making it the dominant risk engine. Microsoft’s risk share roughly matches its weight. A position with almost double the risk share of its size is a clear concentration flag. Anyone using a setup like this might periodically ask whether that single-stock risk level still matches their comfort, especially after big price moves.
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.
On the risk–return chart, the current allocation sits right on or very close to the efficient frontier. The efficient frontier is the curve showing the best return you could historically get for each risk level using just these holdings. The Sharpe ratio — return per unit of risk — is solid at 0.98, and the optimal mix on this frontier is higher but comes with much more volatility. Since the present setup is already efficient for its chosen risk, improvements would come mainly from changing overall risk appetite or diversification goals, not from rearranging these same three holdings in search of a “free lunch.”
Dividends
- Microsoft Corporation 1.00%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.01%
Dividend yield is low, around 1% overall, which is typical for growth-driven, tech-heavy allocations. Dividends are the cash payouts from companies and can be useful for investors seeking steady income. In this case, almost all of the return historically has come from price appreciation rather than income. That’s perfectly fine for growth-focused goals, especially when reinvesting small dividends back into the market. However, an income-oriented person or someone approaching withdrawals might eventually want higher-yielding components to support regular cash needs. For now, the low yield aligns well with an emphasis on capital growth over current income.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.02%
Costs are impressively low, with an overall expense ratio around 0.02–0.03% driven by the very cheap ETF. Keeping fees down is one of the few things investors fully control, and even small differences compound significantly over decades. Low-cost structures like this leave more of the market’s return in the investor’s pocket rather than in fund expenses. From a cost-efficiency standpoint, this is extremely well-aligned with best practices and benchmark standards. There’s no meaningful drag here to fix; any future tweaks would likely center on diversification or risk management rather than squeezing out additional fee savings.
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