Growth-oriented portfolio with a strong tech focus and low diversification

Report created on Jun 9, 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 technology, comprising 50% in a broad market ETF and 50% in tech-specific and large-cap growth ETFs. This composition indicates a growth-oriented strategy with a significant emphasis on the technology sector. The concentration in a single asset class (stocks) and a notable sector focus raises questions about diversification.

Growth Info

Historically, this portfolio has shown an impressive Compound Annual Growth Rate (CAGR) of 16.72%, with a maximum drawdown of -32.91%. These figures suggest a high-reward but also high-risk profile, characteristic of growth-focused investments. The days contributing to 90% of returns highlight the volatility and the potential for significant short-term gains.

Projection Info

Monte Carlo simulations, which use historical data to forecast potential future outcomes, suggest a wide range of possible performances for this portfolio. With a median projected increase of 813.8% and 994 out of 1,000 simulations showing positive returns, the forward-looking perspective remains optimistic. However, it's critical to remember that such simulations cannot predict future market conditions with certainty.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, offering no buffer against stock market volatility through diversification into other asset classes like bonds or real estate. This allocation suits a high-risk, high-reward investment strategy but may not be appropriate for investors seeking stability or income.

Sectors Info

  • Technology
    54%
  • Financials
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    8%
  • Health Care
    7%
  • Industrials
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

With over half of the portfolio in technology, its performance is closely tied to the fortunes of this sector. While tech has been a strong performer, this concentration increases risk, as sector-specific downturns can heavily impact the portfolio. The presence of other sectors, although in much smaller proportions, does little to mitigate this risk.

Regions Info

  • North America
    100%

The exclusive focus on North American assets limits geographic diversification. This concentration in a single region can expose the portfolio to localized economic downturns or geopolitical risks, missing out on potential opportunities in developed or emerging markets elsewhere.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    29%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The emphasis on mega and big-cap stocks aligns with the portfolio's growth and technology focus, as these companies often dominate the tech sector. However, the limited exposure to smaller companies may restrict potential for outsized gains from high-growth small-cap stocks.

Redundant positions Info

  • Fidelity® MSCI Information Technology Index ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The high correlation between the tech-focused ETFs suggests redundancy, limiting the portfolio's diversification benefits. In downturns, these assets are likely to move in tandem, increasing the risk of significant losses.

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.

To optimize risk versus return, diversification should be improved by reducing overlap in highly correlated assets and considering broader sector and geographic exposure. This approach could help achieve a more balanced risk-return profile, potentially enhancing long-term performance.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.88%

The portfolio's dividend yield stands at 0.88%, which is relatively modest. This yield reflects the growth orientation of the portfolio, as growth stocks typically reinvest earnings rather than pay out dividends. For income-focused investors, this may be a limiting factor.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low total expense ratios (TER), averaging 0.04%. This cost efficiency supports better net returns over the long term, an important consideration for maintaining portfolio growth.

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