Concentrated US stock portfolio mixing tech growth with dependable dividend payers in a simple structure
Report created on May 5, 2024Risk profile
4/7
Diversification profile
2/5
Positions
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QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 50.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 50.00%
The portfolio is extremely straightforward, split 50/50 between a Nasdaq 100 ETF and a US dividend equity ETF, with 100% in stocks. This creates a barbell between growth-oriented companies and more mature dividend payers. Structure like this is easy to understand and maintain, which is valuable over the long run. The trade-off is that with only two funds, diversification across styles and regions is naturally limited. A key takeaway here is that simplicity is a strength, but it works best when the chosen building blocks are intentionally combined to balance risk, growth potential, and income in a way that matches long-term goals.
Growth
From late 2020 to early 2026, $1,000 grew to about $1,940, implying a compound annual growth rate (CAGR) of 12.96%. CAGR is the “average speed” of growth per year over the whole period. This result slightly lagged the US market by 0.15% per year but beat the global market by 1.79% per year, which is a solid outcome. The max drawdown of about -24% was similar to both benchmarks, showing comparable downside risk. Only 22 days drove 90% of total returns, underlining how a few strong days matter a lot. Staying invested through ups and downs is crucial, because missing those rare big up days can seriously hurt long-term results.
Asset classes
- Stocks 100%
All capital is in stocks, with no bonds, cash, or alternative assets. That keeps the growth potential high but means portfolio value will move closely with equity markets, including during sharp downturns. Most “balanced” setups mix stocks with bonds to smooth out volatility; here, risk control comes instead from the blend of growth and dividend styles within equities. For someone comfortable riding through sizable drawdowns, this can be perfectly acceptable. The main practical implication is that short‑term spending needs or emergency funds should usually sit outside this portfolio, because this setup is designed for long-term growth rather than capital stability.
Sectors
- Technology 33%
- Consumer Staples 14%
- Health Care 12%
- Telecommunications 12%
- Consumer Discretionary 10%
- Energy 9%
- Industrials 6%
- Financials 5%
- Utilities 1%
- Basic Materials 1%
Sector exposure is tilted toward technology at 33%, with meaningful allocations to consumer staples, health care, and telecom, plus smaller slices in energy, industrials, and financials. This mix combines growth-sensitive areas with more defensive, cash-generative businesses, which is a good structural balance. However, the tech tilt means results may be more sensitive to interest rate changes and sentiment around high-growth companies. When rates rise or tech falls out of favor, volatility can spike. On the positive side, the strong presence of defensive sectors like consumer staples and health care helps cushion drawdowns somewhat, providing a useful counterweight to the tech-heavy component.
Regions
- North America 99%
- Europe Developed 1%
Geographic exposure is overwhelmingly in North America at 99%, with only a token allocation to developed Europe. This is very different from global benchmarks, which typically spread more across Europe, Asia, and emerging markets. The benefit of this tilt is alignment with the world’s deepest and most innovative equity market, which has historically performed well. The trade-off is sensitivity to US-specific risks, such as domestic policy changes, currency moves, or prolonged underperformance versus other regions. For many investors, a clear home bias is comfortable and familiar, but it does mean that global diversification benefits — especially when non-US markets outperform — are largely left on the table.
Market capitalization
- Large-cap 53%
- Mega-cap 27%
- Mid-cap 17%
- Small-cap 2%
- Micro-cap 1%
The portfolio leans heavily toward mega-cap and large-cap stocks at about 80% combined, with modest allocations to mid- and small-caps. Large and mega companies typically have more stable earnings, deeper liquidity, and greater analyst coverage, which can reduce company-specific surprises. However, smaller companies often drive a significant portion of long-term equity market growth, albeit with bumpier rides. This cap profile keeps overall volatility reasonable for an all‑equity portfolio and aligns broadly with standard market-cap-weighted indices. The trade-off is somewhat less exposure to the potential long-term growth premium historically associated with smaller companies, in exchange for more stability and familiarity.
True holdings
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NV NVIDIA Corporation 4.28%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
AA Apple Inc 3.70%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
MS Microsoft Corporation 2.85%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
CV Chevron Corp 2.26%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
AM Amazon.com Inc 2.26%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
CO ConocoPhillips 2.06%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
VZ Verizon Communications Inc 2.02%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
MR Merck & Company Inc 1.97%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
KO The Coca-Cola Company 1.97%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
TX Texas Instruments Incorporated 1.91%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- Top 10 total 25.27%
Looking through the top holdings, there is meaningful exposure to mega-cap names like NVIDIA, Apple, Microsoft, Amazon, and large dividend payers such as Chevron, Coca-Cola, and Merck. Several of these appear in both ETFs, creating “hidden” concentration even though only top-10 ETF holdings are shown. Overlap data likely understates true duplication because most underlying positions are outside the top 10. When the same big names show up repeatedly, returns can be driven by a relatively small group of companies. The key takeaway is that headline diversification across two funds can still mask a heavy reliance on a handful of market leaders for both upside and risk.
Factors
Factor exposure is broadly balanced, with most traits near neutral, but there is a noticeable tilt toward quality at 61%. Factor exposure describes how much a portfolio leans into characteristics like value, momentum, or quality that research links to long-term returns. A quality tilt usually means stronger balance sheets, more consistent earnings, and higher profitability. That tends to help in market stress and can smooth the ride compared with lower-quality companies. Neutral exposures to value, size, momentum, yield, and low volatility suggest behavior similar to a broad market, rather than strong style bets. Overall, this factor profile is reassuring and supports the “balanced” risk classification.
Risk contribution
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Invesco NASDAQ 100 ETF
Weight: 50.00% 62.4% -
Schwab U.S. Dividend Equity ETF
Weight: 50.00% 37.6%
Risk contribution shows how much each holding adds to overall ups and downs, which can differ from its weight. Here, the Nasdaq 100 ETF is 50% of capital but contributes about 62% of total risk, while the dividend ETF, also 50% by weight, contributes only 38%. This tells us the growth-heavy side of the barbell is the main driver of volatility, as you’d expect. A risk/weight ratio above 1.0 for the Nasdaq ETF and below 1.0 for the dividend ETF makes this very clear. If a smoother ride were desired, slightly increasing the dividend portion or adding stabilizing assets could reduce overall swings without changing the core idea.
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 portfolio sits right on or very close to the efficient frontier, meaning the mix of the two ETFs is already using them in a highly efficient way. The Sharpe ratio of 0.72 is slightly below that of the optimal and minimum-variance mixes (around 0.82–0.83), but those alternatives involve only modest reductions in risk for slightly lower expected return. Because the portfolio is effectively on the frontier, there is no obvious “free lunch” from a simple reweighting. That’s reassuring: the existing allocation delivers solid risk-adjusted returns given the chosen building blocks, leaving any changes to be driven by comfort with volatility or income needs.
Dividends
- Invesco NASDAQ 100 ETF 0.50%
- Schwab U.S. Dividend Equity ETF 2.60%
- Weighted yield (per year) 1.55%
The combined estimated dividend yield is about 1.55%, blending a low‑yield growth ETF at 0.50% with a higher-yield dividend ETF at 2.60%. This provides some cash return, but the portfolio is still primarily growth-focused rather than income-focused. Dividends are useful for reinvesting and compounding over time, and they can help soften the impact of flat or slightly negative markets. The dividend ETF pulls more than its weight in delivering this cash flow, which fits nicely with the overall barbell design. For an investor who wants some income but does not need high, steady payouts, this level of yield is a reasonable middle ground.
Ongoing product costs
- Invesco NASDAQ 100 ETF 0.15%
- Schwab U.S. Dividend Equity ETF 0.06%
- Weighted costs total (per year) 0.10%
Total ongoing costs (TER) sit around 0.10%, with 0.15% for the Nasdaq 100 ETF and a very low 0.06% for the dividend ETF. These are impressively low costs, especially given the concentration in well-known, liquid funds. Fees are one of the few things investors can control directly, and even small differences compound significantly over long periods. Keeping costs at this level supports better long-term performance and leaves more of the return in the investor’s pocket. From a cost perspective, this setup is already in excellent shape, and there is little pressure to change anything purely to reduce fees further.
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