A tech-focused high-growth portfolio with limited diversification and significant U.S. exposure

Report created on Apr 29, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards the Schwab S&P 500 Index Fund at 64.03%, with significant holdings in NVIDIA Corporation at 22.18%. This composition indicates a strong focus on large-cap U.S. equities, particularly in the technology sector. Compared to a typical diversified portfolio, this one is concentrated, increasing potential returns but also risk. The limited exposure to other asset classes and sectors suggests a need for diversification to manage risk better. Consider diversifying across asset classes and sectors to balance potential risks and returns.

Growth Info

Historically, the portfolio has performed exceptionally well, with a CAGR of 28.21%. This impressive growth rate reflects the strong performance of U.S. large-cap stocks, particularly in the technology sector. However, the max drawdown of -47.43% highlights significant volatility, which is typical for growth-focused portfolios. While past performance is not indicative of future results, this data suggests that the portfolio has been well-suited for high-risk, high-reward investors. To manage volatility, consider gradually rebalancing towards more stable assets.

Projection Info

Monte Carlo simulations, which project potential outcomes based on historical data, indicate a wide range of future returns. The 50th percentile projection shows a potential growth of 3,052%, with the 5th percentile still offering a 258.3% increase. This suggests a high likelihood of positive returns, but also significant variability. While simulations provide valuable insights, they rely on historical trends and assumptions, which may not hold true in the future. Regularly review and adjust the portfolio to align with changing market conditions and personal goals.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, with no allocation to cash or bonds. This 100% equity exposure aligns with a high-risk, high-return strategy, suitable for aggressive investors. However, the lack of asset class diversification increases vulnerability to market downturns. Diversifying into bonds or other asset classes could reduce risk and provide more stable returns over time. Consider adding fixed-income securities or alternative investments to enhance diversification and manage risk.

Sectors Info

  • Technology
    53%
  • Financials
    10%
  • Health Care
    7%
  • Consumer Discretionary
    7%
  • Industrials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

The portfolio is heavily concentrated in the technology sector, comprising 53% of the total allocation. While this has driven strong historical returns, it also exposes the portfolio to sector-specific risks. Other sectors like financial services and healthcare have minimal representation. A tech-heavy focus can lead to higher volatility, especially during market corrections or interest rate hikes. To mitigate sector risk, consider diversifying into underrepresented sectors like industrials or consumer goods to achieve a more balanced sector allocation.

Regions Info

  • North America
    97%
  • Europe Developed
    1%
  • Asia Emerging
    1%

With 97% exposure to North American markets, the portfolio has limited geographic diversification. This concentration could increase vulnerability to regional economic downturns. Expanding exposure to international markets, particularly in Europe or emerging Asia, could enhance diversification and reduce reliance on the U.S. economy. Consider introducing international equities or funds to capture growth opportunities outside North America and balance regional risks.

Market capitalization Info

  • Mega-cap
    54%
  • Large-cap
    26%
  • Mid-cap
    16%
  • Small-cap
    2%
  • Micro-cap
    1%

The portfolio is predominantly invested in mega-cap and large-cap stocks, accounting for 80% of the allocation. This focus on larger companies provides stability but limits exposure to the potentially higher growth of mid-cap and small-cap stocks. While large-cap stocks offer reliability, diversifying into smaller market capitalizations can enhance growth potential. Consider increasing the allocation to mid-cap or small-cap stocks for a more balanced market capitalization exposure.

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 could benefit from optimization using the Efficient Frontier, which identifies the best possible risk-return ratio for a given set of assets. This process involves adjusting the allocation to achieve maximum returns for the level of risk taken. While the current portfolio is growth-focused, optimizing it could enhance returns without significantly increasing risk. Regularly review and adjust allocations to maintain an optimal risk-return balance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.90%
  • First Trust NASDAQ Cybersecurity ETF 0.20%
  • Schwab S&P 500 Index Fund 1.30%
  • Weighted yield (per year) 0.90%

The portfolio's dividend yield is relatively low at 0.90%, reflecting its growth-oriented nature. Dividends can provide a steady income stream and cushion against market volatility. While this portfolio focuses on capital appreciation, incorporating higher dividend-yielding assets could enhance income and reduce overall risk. Consider adding dividend-focused funds or stocks to balance growth with income generation.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • First Trust NASDAQ Cybersecurity ETF 0.59%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is low at 0.07%, indicating cost efficiency. This low-cost structure supports better long-term performance by minimizing fees that can erode returns. Keeping costs low is a significant advantage, as it allows more of the portfolio's returns to be reinvested. Continue monitoring and maintaining low expenses, and consider cost-effective investment options to maximize net returns over time.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey