Growth-focused portfolio with high exposure to large-cap US stocks and low diversification

Report created on Jul 18, 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 large-cap U.S. equities, with a significant emphasis on the technology sector. The inclusion of four ETFs that track major US indices (NASDAQ 100, S&P 500, and large-cap growth stocks) alongside a single stock position in Berkshire Hathaway indicates a strong bias towards growth-oriented investments. However, this composition results in low diversification, both in terms of asset classes and geographic exposure, as it is almost entirely allocated to North American stocks.

Growth Info

The portfolio has demonstrated a robust Compound Annual Growth Rate (CAGR) of 16.36%, with a maximum drawdown of -26.75%. This performance, characterized by high growth, also comes with significant volatility, as indicated by the drawdown figure. The days contributing to 90% of returns being concentrated in just 21.0 days highlight the portfolio's reliance on short periods of significant gains, which can be a double-edged sword, amplifying both potential returns and volatility.

Projection Info

Monte Carlo simulations, which forecast future performance by analyzing historical data, suggest a wide range of outcomes for this portfolio. With 995 out of 1,000 simulations predicting positive returns, the median projection indicates a potential increase of 643.9% in value. However, it's important to note that these simulations are based on past performance, which is not a reliable indicator of future results. The broad range between the 5th and 67th percentiles underscores the uncertainty inherent in these projections.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no representation from other asset classes like bonds, real estate, or commodities. This singular focus enhances the portfolio's growth potential but also increases its susceptibility to market volatility. Diversifying across different asset classes can reduce risk by spreading exposure across investments that react differently to the same economic events.

Sectors Info

  • Technology
    38%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Industrials
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation is heavily tilted towards technology, financial services, and consumer cyclicals, which are sectors often associated with higher growth but also higher volatility. This concentration enhances the portfolio's growth prospects but also exposes it to sector-specific risks. Diversifying across a broader range of sectors could mitigate this risk while still capturing growth opportunities in other areas of the economy.

Regions Info

  • North America
    99%

The geographic allocation is almost exclusively focused on North America, with 99% of assets based in this region. This concentration in a single geographic area can limit exposure to global growth opportunities and increase vulnerability to region-specific economic downturns. Expanding geographic exposure could provide a buffer against North American market volatility and offer access to growth in emerging markets and other developed economies.

Market capitalization Info

  • Mega-cap
    55%
  • Large-cap
    28%
  • Mid-cap
    11%
  • Small-cap
    3%
  • Micro-cap
    3%

The portfolio's market capitalization breakdown shows a strong preference for mega and large-cap stocks, which are typically more stable but may offer lower growth potential compared to smaller companies. While this aligns with the portfolio's growth profile, incorporating a greater mix of medium, small, and micro-cap stocks could enhance diversification and potential for higher returns, albeit with increased risk.

Redundant positions Info

  • Invesco S&P 500® Top 50 ETF
    Invesco NASDAQ 100 ETF
    Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the four major ETFs in the portfolio suggests redundancy, limiting the benefits of diversification. These ETFs' overlapping holdings, particularly in large-cap and technology stocks, mean that the portfolio may not be as diversified as its composition suggests. Reducing overlap by reallocating assets among less correlated investments could improve diversification and reduce risk without significantly compromising growth 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.

Optimizing the portfolio using the Efficient Frontier could improve the risk-return profile by adjusting the allocation among the current assets. This process involves finding the optimal balance to achieve the highest possible returns for a given level of risk. However, given the portfolio's high correlation among major holdings, diversification beyond these assets should be considered to truly optimize performance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard S&P 500 ETF 1.20%
  • Invesco S&P 500® Top 50 ETF 0.70%
  • Weighted yield (per year) 0.92%

The portfolio's overall dividend yield is relatively low at 0.92%, reflecting its focus on growth over income. While this aligns with the portfolio's growth orientation, incorporating higher-yielding assets could provide a steady income stream, which can be particularly beneficial during market downturns or for investors seeking regular income.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Invesco S&P 500® Top 50 ETF 0.20%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) of 0.10% is impressively low, which supports better long-term performance by minimizing the drag on returns caused by fees. Keeping costs low is crucial for enhancing net returns, especially in a growth-focused portfolio where compounding plays a significant role in wealth accumulation.

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