Growth-focused portfolio with heavy tech exposure and low diversification

Report created on Jul 6, 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 weighted towards technology, with 50% in the Vanguard S&P 500 ETF, 15% each in the Invesco NASDAQ 100 and Vanguard Growth Index Fund ETFs, 10% in the Fidelity® MSCI Information Technology Index ETF, and another 10% in the Invesco S&P 500® Momentum ETF. This composition reflects a strong growth orientation but exhibits low diversity, concentrating risk in the technology sector and large-cap stocks.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.50%, with a maximum drawdown of -28.11%. This performance, while impressive, is tied to a relatively narrow range of sectors, primarily technology, which can lead to volatility during market downturns or sector-specific shocks.

Projection Info

Monte Carlo simulations suggest a wide range of potential future outcomes, with the median projection indicating a 760% increase over an unspecified timeframe. While these projections are based on historical data, they highlight the portfolio's growth potential but also underscore the inherent uncertainty and risk in such a concentrated investment strategy.

Asset classes Info

  • Stocks
    100%

With 100% of the portfolio allocated to stocks, there's a clear emphasis on capital appreciation over income or stability. This asset class allocation supports the portfolio's growth objectives but lacks the balance that fixed income or alternative investments could provide, potentially increasing volatility and risk.

Sectors Info

  • Technology
    44%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Financials
    10%
  • Health Care
    7%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

The technology sector dominates this portfolio at 44%, followed by consumer cyclicals and communication services. While this sectoral focus aligns with growth objectives, it also exposes the portfolio to sector-specific risks, such as regulatory changes or technology shifts, which could disproportionately impact overall performance.

Regions Info

  • North America
    99%

The geographic allocation is almost exclusively North American (99%), offering limited exposure to international markets. This concentration enhances exposure to US market performance but misses potential opportunities and risk mitigation benefits from global diversification.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    32%
  • Mid-cap
    15%
  • Small-cap
    1%

The portfolio leans heavily towards mega (52%) and large-cap (32%) companies, which typically offer stability and consistent growth. However, the minimal exposure to small and micro-cap stocks limits potential high-growth opportunities that these segments may offer.

Redundant positions Info

  • Vanguard Growth Index Fund ETF Shares
    Fidelity® MSCI Information Technology Index ETF
    Invesco NASDAQ 100 ETF
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the portfolio's assets, particularly within the technology sector, limits its diversification benefits. In periods of market stress, especially within the tech sector, this could lead to significant portfolio volatility, as these assets are likely to move in the same direction.

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 current portfolio could be optimized for a slightly higher expected return of 19.32% with the same level of risk. This suggests that by addressing the high correlation among assets, particularly by reducing overlap in technology exposure, the portfolio could achieve better diversification without sacrificing growth potential.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • Invesco NASDAQ 100 ETF 0.50%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 0.85%

The overall dividend yield of the portfolio stands at 0.85%, reflecting a focus on growth over income. While dividends contribute to total returns, the primary objective here appears to be capital appreciation, which aligns with the growth profile of the portfolio.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • Invesco NASDAQ 100 ETF 0.15%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) of 0.06% is impressively low, which is beneficial for long-term performance. Keeping costs low is crucial in maximizing returns, especially in growth-oriented portfolios where the compounding effect can significantly enhance gains over time.

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