Balanced portfolio leaning heavily on technology and large-cap US equities with moderate diversification

Report created on Aug 18, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio exhibits a strong inclination towards US equities, particularly within the technology sector, as evidenced by its significant allocation to the Vanguard S&P 500 ETF and the Vanguard Information Technology Index Fund ETF Shares. The inclusion of Vanguard Total International Stock Index Fund ETF Shares and Vanguard Total World Stock Index Fund ETF Shares introduces some level of global diversification. However, the portfolio's concentration in large-cap stocks, with a notable emphasis on technology, suggests a potential for high volatility, especially in market downturns. The presence of specific stocks like Palantir Technologies Inc. and Oscar Health Inc. adds a speculative element to the portfolio.

Growth Info

The portfolio has demonstrated strong historical performance, with a Compound Annual Growth Rate (CAGR) of 14.72%. This high growth rate is commendable but comes with its own risks, as evidenced by a maximum drawdown of -26.33%. Such drawdowns indicate the portfolio's susceptibility to significant declines during market corrections, particularly in tech-heavy allocations. The days contributing to 90% of returns being limited to 18 suggests that the portfolio's performance is highly concentrated in specific periods, highlighting the importance of timing in this investment strategy.

Projection Info

Using Monte Carlo simulations, which forecast future performance based on historical data, the portfolio shows a wide range of outcomes. While the median projection suggests a substantial increase, the presence of a 5th percentile outcome at -59.8% underscores the risk of significant losses. These simulations, though useful for understanding potential volatility and reward, are inherently limited by their reliance on past trends, which may not predict future market movements accurately.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely composed of stocks (99%), with a minimal cash holding (1%). This allocation underscores a growth-oriented strategy but lacks diversification across different asset classes, such as bonds or real estate, which could provide stability during stock market declines. The absence of investments in alternative asset classes may increase the portfolio's volatility and risk, particularly in turbulent market conditions.

Sectors Info

  • Technology
    40%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Industrials
    8%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation reveals a heavy emphasis on technology, accounting for 40% of the portfolio. While this concentration has likely contributed to the portfolio's impressive historical performance, it also increases susceptibility to sector-specific risks. Diversifying across a broader range of sectors could mitigate some of this risk and potentially smooth out returns over time. The presence of financial services, consumer cyclicals, and healthcare offers some balance, but the technology sector's dominance remains a notable risk factor.

Regions Info

  • North America
    83%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

With 83% of the portfolio allocated to North America, the geographic exposure is heavily skewed towards the US market. This concentration benefits from the robust performance of US equities in recent years but also exposes the portfolio to regional economic and political risks. Expanding into more international and emerging markets could offer additional growth opportunities and reduce the portfolio's vulnerability to US-centric risks.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Small-cap
    4%
  • Micro-cap
    2%

The portfolio's focus on mega (46%) and big (31%) cap stocks aligns with its balanced risk profile, offering a foundation of stability and potential for growth. However, the limited exposure to medium, small, and micro-cap stocks suggests missed opportunities for higher growth rates these segments can offer, albeit with increased risk. A more varied market cap distribution could enhance the portfolio's growth potential while maintaining an acceptable level of risk.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and Vanguard Total World Stock Index Fund ETF Shares indicates overlapping investments, which may dilute the benefits of diversification. By holding highly correlated assets, the portfolio may not be fully leveraging the risk-reducing advantages of diversification, particularly during market downturns when different asset classes or less correlated investments might offer better protection against losses.

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 suggests room for optimization, particularly in reducing overlap and enhancing diversification. Employing the Efficient Frontier concept could identify an allocation that offers the highest expected return for a given level of risk. This optimization process might involve reallocating from highly correlated assets to those with lower correlations or different risk-return profiles, potentially improving the portfolio's overall efficiency.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard Information Technology Index Fund ETF Shares 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.29%

The portfolio's dividend yield, with a total yield of 1.29%, contributes to its total return, providing a steady income stream in addition to potential capital gains. The varying yields across ETFs, from the lower 0.40% of the Vanguard Information Technology Index Fund ETF Shares to the higher 2.70% of the Vanguard Total International Stock Index Fund ETF Shares, highlight the balance between growth and income. Considering dividend yields in future investment decisions could enhance the portfolio's income generation while supporting its growth objectives.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.05%

The portfolio's overall low cost, with a Total Expense Ratio (TER) of 0.05%, is a positive aspect, enhancing its long-term growth potential by minimizing the drag on performance due to fees. The individual costs of the ETFs, ranging from 0.03% to 0.25%, are competitively low, particularly important for long-term investors as even small differences in fees can have a significant impact on net returns over time.

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