A speculative portfolio with high concentration in aerospace and tech sectors

Report created on Aug 8, 2025

Risk profile Info

7/7
Speculative
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio exhibits a high concentration in a few select companies, with 40% allocated to a diversified ETF and the remaining 60% equally divided among three common stocks in the aerospace and technology sectors. Such a structure is indicative of a speculative strategy, aiming for high returns at the expense of higher risk. The heavy reliance on specific industries and small number of holdings significantly limits diversification, increasing the portfolio's vulnerability to sector-specific downturns.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 50.78%, this portfolio has demonstrated exceptional returns. However, it's crucial to note the substantial maximum drawdown of -44.77%, reflecting the high-risk nature of this investment strategy. The performance is characterized by significant volatility, with a small number of days contributing to the majority of returns. This pattern underscores the speculative nature of the investments and the potential for wide fluctuations in value.

Projection Info

Monte Carlo simulations, which use historical data to project a range of possible outcomes, show a wide variance in potential future performance. While the median projected return is impressively high, the 5th percentile outcome indicates a substantial risk of loss. Such projections highlight the speculative nature of the portfolio, with a significant chance of both high returns and considerable losses.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks, with a nominal presence of cash. This composition aligns with the portfolio's speculative profile, seeking maximum growth potential. However, the absence of fixed-income assets or alternative investments limits its ability to hedge against market volatility and downturns in the equity market.

Sectors Info

  • Technology
    30%
  • Industrials
    25%
  • Utilities
    21%
  • Financials
    7%
  • Consumer Discretionary
    4%
  • Health Care
    4%
  • Telecommunications
    3%
  • Consumer Staples
    2%
  • Basic Materials
    1%
  • Energy
    1%
  • Real Estate
    1%

The sector allocation further emphasizes the portfolio's speculative approach, with a heavy focus on technology and industrials, notably within the aerospace industry. While such sectors can offer substantial growth, they are also prone to high volatility. The limited exposure to more stable sectors like consumer defensive or healthcare does little to mitigate overall risk.

Regions Info

  • North America
    60%

Geographic exposure is predominantly North American, which may concentrate risk further, especially in light of global economic uncertainties. Diversifying across more regions could help spread risk and tap into growth opportunities in other markets, potentially stabilizing returns over time.

Market capitalization Info

  • Large-cap
    52%
  • Mid-cap
    27%
  • Mega-cap
    17%
  • Small-cap
    2%

The portfolio's market capitalization exposure leans heavily towards big and mega-cap stocks, which typically offer more stability than smaller companies. However, the significant investments in smaller, potentially more volatile companies underscore the portfolio's high-risk, high-reward strategy.

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 configuration, while optimized for high returns, sits at the extreme end of the risk spectrum. Employing the Efficient Frontier concept could help in finding a more balanced asset allocation that potentially offers a better risk-return trade-off. Adjusting the allocation to include a broader mix of asset classes and sectors could improve the portfolio's resilience without drastically compromising growth potential.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 0.68%

The dividend yield from the Vanguard Total World Stock Index Fund ETF contributes to the portfolio's income, albeit modestly. Given the portfolio's speculative nature, dividends play a secondary role to capital appreciation. However, incorporating assets with higher dividend yields could provide a more balanced income-growth approach, offering periodic returns in addition to potential capital gains.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.03%

The overall portfolio costs are impressively low, which is beneficial for long-term growth as it minimizes the drag on returns. Keeping costs low is a sound strategy, particularly in speculative investing, where the potential for high returns can be offset by high expenses.

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