A tech-heavy growth portfolio with a strong focus on US equities and limited diversification
Report created on Aug 20, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
VG Vanguard Information Technology Index Fund ETF Shares
VGT - US92204A7028 30.00%
This portfolio is heavily weighted towards US equities, with a significant emphasis on the technology sector, represented by a 70% allocation to the Vanguard S&P 500 ETF and a 30% allocation to the Vanguard Information Technology Index Fund ETF Shares. This composition suggests a growth-oriented strategy, leveraging the performance of large-cap and tech companies within the S&P 500. However, the portfolio's diversification is low, focusing almost entirely on a single asset class (stocks) and predominantly on a single geographic region (North America).
Growth
Historically, the portfolio has shown impressive performance with a Compound Annual Growth Rate (CAGR) of 18.10%. This high return rate is reflective of the strong growth in the technology sector and the overall US stock market in recent years. However, the maximum drawdown of -33.16% indicates significant volatility and risk, particularly during market downturns. This level of risk is consistent with the portfolio's growth profile but requires a high risk tolerance from the investor.
Projection
Using Monte Carlo simulations, the portfolio's forward projection suggests a wide range of potential outcomes, with a median increase of 1,196.5% in value. While these simulations provide a broad sense of possible future performance based on historical data, it's important to remember that they cannot predict future market movements with certainty. The high degree of variability in projected outcomes underscores the portfolio's risk level.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely in stocks, with no presence in other asset classes such as bonds or real estate. This singular focus on equities enhances growth potential but also increases susceptibility to market volatility. Diversifying across different asset classes could provide a buffer during stock market downturns and reduce overall portfolio volatility.
Sectors
- Technology 53%
- Financials 10%
- Consumer Discretionary 8%
- Telecommunications 7%
- Health Care 7%
- Industrials 6%
- Consumer Staples 4%
- Energy 2%
- Utilities 2%
- Real Estate 1%
- Basic Materials 1%
The technology sector dominates this portfolio, comprising 53% of the total allocation. While the tech sector has been a strong performer, this concentration increases exposure to sector-specific risks. The remaining sectors, including financial services and consumer cyclicals, provide some diversification, but the heavy tech weighting remains a defining characteristic and a potential vulnerability in the face of tech industry downturns.
Regions
- North America 99%
The geographic allocation is heavily skewed towards North America, with 99% of the portfolio invested in this region. This concentration in the US market limits exposure to potential growth in other regions and increases vulnerability to US-specific economic events. Expanding geographic diversification could mitigate some of this risk and tap into growth opportunities in other markets.
Market capitalization
- Mega-cap 48%
- Large-cap 32%
- Mid-cap 16%
- Small-cap 3%
- Micro-cap 1%
The portfolio's emphasis on mega and big-cap stocks, which make up 80% of the allocation, aligns with its growth and risk profile. These companies generally offer more stability than their smaller counterparts but might also limit the portfolio's upside potential compared to more aggressive allocations that include a higher percentage of medium, small, or micro-cap stocks.
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 portfolio's current risk-return profile, there may be opportunities to optimize its performance using the Efficient Frontier concept. This could involve adjusting the asset allocation to achieve a better balance between risk and return, potentially by diversifying into other asset classes or sectors. However, any adjustments should be carefully considered in the context of the investor's risk tolerance and investment goals.
Dividends
- Vanguard Information Technology Index Fund ETF Shares 0.50%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 0.99%
The portfolio's dividend yield of 0.99% contributes to its total return but is not the primary focus of this growth-oriented strategy. The yield is a mix of higher dividends from the broader S&P 500 ETF and lower dividends from the tech-focused ETF. For investors seeking income, a reevaluation of the allocation to increase yield might be considered, though it could alter the growth profile.
Ongoing product costs
- Vanguard Information Technology Index Fund ETF Shares 0.10%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.05%
With a total expense ratio (TER) of 0.05%, the portfolio benefits from low costs, which is advantageous for long-term growth. Lower costs mean more of the portfolio's returns are retained by the investor, a critical factor in compounding growth over time. The portfolio's cost efficiency is a positive aspect, supporting better performance net of fees.
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