Tech-heavy growth-oriented portfolio with low diversity and high sector concentration

Report created on Aug 2, 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 stocks and ETFs, comprising a significant portion of the overall investment. The presence of major tech companies like Microsoft, Amazon, and NVIDIA, alongside specialized ETFs in semiconductors, cybersecurity, and information technology, indicates a strong focus on the tech sector. While this sectoral concentration can offer substantial growth opportunities, it also introduces a higher level of risk and volatility, especially during market downturns or sector-specific disruptions.

Growth Info

The portfolio has demonstrated a robust Compound Annual Growth Rate (CAGR) of 22.25%, outperforming many traditional benchmarks. This high performance is partly due to the tech sector's significant gains in recent years. However, the maximum drawdown of -34.31% highlights the potential risk and volatility associated with this concentration. It's crucial to balance the pursuit of high returns with the understanding that past performance is not always indicative of future results.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes, with the 50th percentile suggesting a 903.7% return. While this tool provides a broad spectrum of possible future scenarios, it's important to note that these projections are based on historical data and cannot account for unforeseen market changes. Investors should use these simulations as one of many tools in decision-making, keeping in mind the inherent limitations.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no allocation to bonds, real estate, or alternative investments. This singular focus on equities, particularly within the tech sector, maximizes growth potential but also increases susceptibility to market volatility. Diversifying across different asset classes can help mitigate risk and smooth out returns over time.

Sectors Info

  • Technology
    64%
  • Consumer Discretionary
    11%
  • Telecommunications
    5%
  • Financials
    4%
  • Industrials
    4%
  • Health Care
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Consumer Discretionary
    1%
  • Utilities
    1%
  • Basic Materials
    1%

With 64% of the portfolio in technology, followed by smaller allocations to consumer cyclicals and other sectors, there's a clear emphasis on growth-oriented industries. While tech stocks have historically provided excellent returns, this concentration can lead to significant fluctuations. Expanding into underrepresented sectors could provide a buffer during tech market corrections.

Regions Info

  • North America
    97%
  • Asia Developed
    1%
  • Europe Developed
    1%

The geographic allocation is heavily skewed towards North America, with minimal exposure to international markets. This focus on the US market, particularly in the tech sector, has been beneficial but also limits global diversification. Incorporating investments from developed and emerging markets outside of North America could enhance portfolio resilience.

Market capitalization Info

  • Mega-cap
    64%
  • Large-cap
    23%
  • Mid-cap
    11%
  • Small-cap
    2%

The portfolio's emphasis on mega and large-cap stocks contributes to its growth profile and relative stability within the tech sector. However, the limited exposure to medium, small, and micro-cap stocks may restrict potential for outsized gains from smaller, high-growth companies. Broadening the market cap range could introduce new growth avenues and diversification benefits.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Information Technology Index Fund ETF Shares
    Fidelity 500 Index Fund
    Invesco NASDAQ 100 ETF
    High correlation

The high correlation among certain ETFs and stocks, particularly within the tech sector, indicates overlapping exposures that may not provide the diversification benefits expected. This redundancy can amplify risk during tech-specific downturns. Identifying and reducing these overlaps can enhance portfolio efficiency and risk management.

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 current portfolio can be optimized by addressing the high correlation between assets and the sector concentration risk. Utilizing the Efficient Frontier concept could help in reallocating assets to achieve a more favorable risk-return profile. This involves adjusting the portfolio to include assets with lower correlation and exploring opportunities outside the tech sector for broader diversification.

Dividends Info

  • Apple Inc 0.50%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.60%
  • First Trust NASDAQ Cybersecurity ETF 0.30%
  • Fidelity 500 Index Fund 0.90%
  • Microsoft Corporation 0.60%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • VanEck Semiconductor ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 0.69%

The portfolio's overall dividend yield of 0.69% reflects its growth orientation, with reinvested earnings fueling capital appreciation rather than income generation. For investors seeking income, increasing exposure to higher-yielding assets or sectors outside of technology may be beneficial.

Ongoing product costs Info

  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • First Trust NASDAQ Cybersecurity ETF 0.59%
  • Fidelity 500 Index Fund 0.02%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) of 0.11% is relatively low, which is advantageous for long-term growth by minimizing the drag on returns. However, individual fund costs vary, and the higher TER of certain ETFs, like the First Trust NASDAQ Cybersecurity ETF at 0.59%, could be areas for cost optimization.

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