Growth-focused portfolio with high reliance on US equities and technology sector
Report created on Jul 28, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VU Vanguard Growth Index Fund ETF Shares
VUG - US9229087369 60.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 40.00%
This portfolio is heavily weighted towards US equities, with a 60% allocation in the Vanguard Growth Index Fund ETF Shares and a 40% allocation in the Vanguard Total Stock Market Index Fund ETF Shares. This composition indicates a strong growth orientation but exhibits low diversity, concentrating heavily on the stock asset class and, within that, predominantly in the technology sector. Such a structure is typical for investors aiming for high growth but comes with increased volatility and risk, particularly given the lack of geographic and sectoral diversification.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 16.09%, with a maximum drawdown of -33.01%. These figures suggest that while the portfolio has offered robust growth, it has also experienced significant volatility, as evidenced by the substantial drawdown. This performance is reflective of the high-growth, high-risk strategy inherent to portfolios heavily invested in the technology sector and growth stocks.
Projection
Monte Carlo simulations, projecting future performance based on historical data, indicate a wide range of outcomes, with the 50th percentile suggesting a 666.7% increase. However, it's crucial to remember that these simulations are inherently uncertain and depend heavily on past market behavior, which may not predict future movements accurately. Such projections should be used as one of many tools in evaluating potential portfolio performance.
Asset classes
- Stocks 100%
The portfolio's asset allocation is entirely in stocks, with no exposure to other asset classes like bonds or real estate. This allocation supports a high-growth strategy but also increases risk, as stocks are generally more volatile than other asset classes. Diversifying across different asset classes can help mitigate risk while still allowing for growth.
Sectors
- Technology 43%
- Consumer Discretionary 13%
- Telecommunications 12%
- Financials 10%
- Health Care 7%
- Industrials 6%
- Consumer Staples 3%
- Real Estate 2%
- Energy 2%
- Basic Materials 1%
- Utilities 1%
The heavy emphasis on the technology sector (43%) aligns with the portfolio's growth strategy but also increases susceptibility to sector-specific risks. The next largest allocations are to consumer cyclicals and communication services, which can offer growth but also contribute to volatility. A more balanced sector allocation could reduce risk without significantly compromising growth potential.
Regions
- North America 100%
With 100% of assets allocated to North America, the portfolio lacks international diversification. This concentration increases exposure to region-specific economic and political risks. Incorporating investments from other regions could reduce risk and potentially tap into growth opportunities in emerging and developed markets outside the US.
Market capitalization
- Mega-cap 55%
- Large-cap 26%
- Mid-cap 15%
- Small-cap 3%
- Micro-cap 1%
The focus on mega (55%) and big (26%) cap stocks supports the portfolio's growth and stability objectives, as these companies tend to be more established and less volatile than smaller companies. However, the inclusion of medium, small, and micro-cap stocks, albeit in smaller proportions, introduces additional growth potential along with increased risk.
Redundant positions
-
High correlationVanguard Growth Index Fund ETF SharesVanguard Total Stock Market Index Fund ETF Shares
The high correlation between the Vanguard Growth Index Fund ETF Shares and the Vanguard Total Stock Market Index Fund ETF Shares indicates overlapping holdings, which diminishes the benefits of diversification. Reducing overlap by reallocating assets can enhance the portfolio's risk-adjusted returns by ensuring that each investment contributes uniquely to the portfolio's performance.
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 structure, with its high correlation between holdings and concentration in the technology sector, suggests room for optimization. By diversifying across more sectors, asset classes, and geographies, the portfolio could achieve a more favorable risk-return profile. The Efficient Frontier analysis could help identify an optimal allocation that maximizes returns for a given level of risk, though it's important to remember that such optimizations are based on historical data and assumptions about future performance.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Growth Index Fund ETF Shares 0.40%
- Weighted yield (per year) 0.72%
The portfolio's average dividend yield of 0.72% is relatively low, reflecting its growth-oriented strategy, which typically prioritizes capital appreciation over income. While dividends are not the focus, they can provide a steady income stream and contribute to total return, especially in volatile or declining markets.
Ongoing product costs
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Growth Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.04%
The portfolio's total expense ratio (TER) of 0.04% is impressively low, which is beneficial for long-term growth as it minimizes the drag on performance caused by fees. Keeping costs low is a key component of maximizing returns, especially important in a growth-focused strategy where compound growth plays a significant role.
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