A growth-focused portfolio with a strong tilt towards technology and large-cap stocks
Report created on Aug 21, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SP SPDR S&P 500 ETF Trust
SPY - US78462F1030 70.00% -
QQ Invesco QQQ Trust
QQQ - US46090E1038 30.00%
The portfolio is highly concentrated in two ETFs: the SPDR S&P 500 ETF Trust and the Invesco QQQ Trust, with a 70/30 split respectively. This composition indicates a strong preference for U.S. equities, particularly in the technology sector, which constitutes 41% of the portfolio. The diversification is low, with all investments in stocks and a significant portion in large-cap companies. This strategy aligns with a growth-oriented profile but carries the risk of volatility due to its heavy reliance on a single country and sector.
Growth
Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 17.15%, with a maximum drawdown of -31.65%. These figures suggest robust growth but also significant volatility, as evidenced by the substantial drawdown. The performance has been driven by a few key days, with 39 days accounting for 90% of the returns. This highlights the portfolio's sensitivity to short-term market movements, particularly in the tech sector, which can be more volatile than broader markets.
Projection
Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential performances, with the 50th percentile indicating an 895.1% increase. However, it's important to remember that these projections are based on past performance, which is not a reliable indicator of future results. The simulations show a high likelihood of positive returns, but the actual future performance could vary widely, especially given the portfolio's narrow focus.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no exposure to other asset classes like bonds or real estate. This allocation supports the portfolio's growth objectives but increases its risk profile. Diversifying across different asset classes can reduce volatility and provide a buffer against stock market downturns. Considering the portfolio's aggressive growth stance, the current allocation is fitting, but it might benefit from a small allocation to other asset classes for risk management.
Sectors
- Technology 41%
- Telecommunications 12%
- Consumer Discretionary 11%
- Financials 9%
- Health Care 7%
- Industrials 7%
- Consumer Staples 5%
- Energy 2%
- Utilities 2%
- Basic Materials 2%
- Real Estate 1%
Sector allocation is heavily skewed towards technology, followed by communication services and consumer cyclicals. This concentration in high-growth sectors can amplify returns but also increases the portfolio's susceptibility to sector-specific risks. The underrepresentation of traditionally defensive sectors like utilities and consumer defensive indicates a deliberate choice to prioritize growth over stability.
Regions
- North America 99%
- Europe Developed 1%
Geographically, the portfolio is almost entirely invested in North America (99%), with minimal exposure to developed Europe (1%) and no exposure to emerging markets. This concentration enhances the portfolio's risk from region-specific economic downturns or policy changes. Diversifying internationally, especially into emerging markets, could offer growth opportunities and reduce geographical risk.
Market capitalization
- Mega-cap 50%
- Large-cap 33%
- Mid-cap 16%
- Small-cap 1%
The portfolio's market capitalization breakdown shows a strong emphasis on mega (50%) and big (33%) cap stocks, with minimal exposure to medium and small caps. This bias towards larger companies is consistent with the portfolio's growth and risk profile, as larger companies often provide more stability than their smaller counterparts. However, incorporating more medium and small-cap stocks could enhance diversification and potential for higher returns.
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.
Considering the Efficient Frontier, which aims to optimize the portfolio for the best possible risk-return ratio, there might be room for improvement in diversification without significantly sacrificing returns. While the current allocation has performed well historically, adjusting the asset allocation to include a broader mix of sectors, geographies, and asset classes could potentially offer a more favorable risk-return profile.
Dividends
- Invesco QQQ Trust 0.50%
- SPDR S&P 500 ETF Trust 1.10%
- Weighted yield (per year) 0.92%
The dividend yields from the Invesco QQQ Trust and SPDR S&P 500 ETF Trust contribute to the portfolio's total yield of 0.92%. While the focus is clearly on capital appreciation rather than income, dividends can provide a steady income stream and help mitigate losses during market downturns. Considering the portfolio's growth orientation, the current dividend yield is reasonable but could be optimized for investors seeking a balance between growth and income.
Ongoing product costs
- Invesco QQQ Trust 0.20%
- SPDR S&P 500 ETF Trust 0.10%
- Weighted costs total (per year) 0.13%
The portfolio's total expense ratio (TER) of 0.13% is impressively low, which is beneficial for long-term performance as lower costs translate to higher net returns. This cost efficiency is a strong aspect of the portfolio, allowing more of the investment returns to compound over time. Maintaining low costs while possibly diversifying further could enhance the portfolio's attractiveness.
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