A growth-focused portfolio with a strong tilt towards technology and large-cap stocks
Report created on Aug 7, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 50.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00%
This portfolio is composed exclusively of two ETFs: the Invesco NASDAQ 100 ETF and the Vanguard S&P 500 ETF, each constituting half of the portfolio. This allocation indicates a focus on US equities, particularly those within the technology sector and other large-cap companies. While this strategy simplifies the investment approach, it also limits diversification across asset classes and geographic regions. The heavy weighting towards technology and large-cap stocks suggests a growth-oriented approach but comes with the trade-off of higher volatility and sector concentration risk.
Growth
Historically, this portfolio has delivered a Compound Annual Growth Rate (CAGR) of 16.14%, with a maximum drawdown of -29.62%. The days contributing to 90% of the returns were notably few, highlighting the portfolio's performance is significantly influenced by short periods of high returns. This pattern is typical for growth-focused portfolios, especially those heavily weighted in tech stocks, which can experience rapid price movements. However, past performance is not a reliable indicator of future results, and the high growth observed may not necessarily continue at the same rate.
Projection
Monte Carlo simulations, which use historical data to project potential future outcomes, suggest a wide range of possible performances for this portfolio, with a median projected increase of 666.1%. While the simulation shows a strong likelihood of positive returns (994 out of 1,000 simulations), investors should understand that these projections are hypothetical and subject to significant uncertainty. The actual future performance will depend on numerous factors, including market movements and economic conditions.
Asset classes
- Stocks 100%
The portfolio is entirely invested in stocks, with no allocation to bonds, real estate, or alternative investments. This singular focus on equities enhances growth potential but also increases volatility and risk, particularly in market downturns. Diversifying across different asset classes can reduce risk and smooth out returns over time, potentially leading to a more stable investment experience, especially for investors with lower risk tolerance.
Sectors
- Technology 43%
- Telecommunications 13%
- Consumer Discretionary 12%
- Health Care 7%
- Financials 7%
- Industrials 6%
- Consumer Staples 5%
- Utilities 2%
- Energy 2%
- Basic Materials 1%
- Real Estate 1%
With 43% allocated to technology and significant investments in communication services and consumer cyclicals, the portfolio is heavily skewed towards sectors that can be highly volatile but offer substantial growth opportunities. While this sector concentration has likely contributed to the portfolio's high historical returns, it also increases susceptibility to sector-specific risks. Diversifying across a broader range of sectors could mitigate this risk while still providing growth opportunities.
Regions
- North America 99%
- Europe Developed 1%
The geographical allocation is overwhelmingly focused on North America (99%), with a minimal exposure to developed Europe (1%). This concentration in the US market limits international diversification, which could be a concern during periods when US markets underperform relative to other regions. Expanding geographic exposure could provide a buffer against US market volatility and offer access to growth opportunities in other economies.
Market capitalization
- Mega-cap 51%
- Large-cap 33%
- Mid-cap 14%
The portfolio's exposure is predominantly towards mega (51%) and large-cap (33%) stocks, with a smaller allocation to mid-cap stocks (14%). This focus on larger companies, which are typically less volatile than their smaller counterparts, aligns with the portfolio's growth orientation but limits exposure to the potentially higher returns of small-cap investments. Introducing a measured allocation to small-cap stocks could enhance diversification and return potential.
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 composition, there's an opportunity to optimize its risk-return profile using the Efficient Frontier concept. This optimization could involve adjusting the allocation between the two ETFs or introducing additional asset classes and sectors to achieve a more favorable balance of risk and return. However, any optimization should be aligned with the investor's risk tolerance, investment horizon, and financial goals.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 0.85%
The portfolio's dividend yield stands at 0.85%, with the Invesco NASDAQ 100 ETF and the Vanguard S&P 500 ETF yielding 0.50% and 1.20%, respectively. While not the primary focus of a growth-oriented portfolio, dividends contribute to total return and provide a source of income, which can be particularly valuable during market downturns or for investors seeking cash flow.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.09%
The portfolio benefits from relatively low costs, with a total expense ratio (TER) of 0.09%. Low costs are crucial for long-term investment success, as they directly enhance net returns. The choice of low-cost ETFs is commendable and aligns with best practices for efficient portfolio management.
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