Growth-focused portfolio with heavy tech exposure and low diversification

Report created on Aug 17, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is primarily invested in the stock market, with a significant concentration in technology through specific ETFs and a broad market index fund. This composition suggests a strategy leaning heavily towards growth, particularly within the tech sector. The allocation includes 50% in a total market index fund, providing some level of broad market exposure, but the remaining 50% is heavily skewed towards technology and momentum strategies. This setup indicates a preference for high-growth potential but comes with increased sector-specific risk.

Growth Info

Historically, the portfolio has exhibited strong performance, with a Compound Annual Growth Rate (CAGR) of 19.05%. However, this high return rate is accompanied by significant volatility, as evidenced by a maximum drawdown of -33.12%. These figures suggest that while the portfolio has the potential to generate substantial gains, it also poses a high risk of substantial losses. The days contributing to 90% of returns being concentrated in such a short period further underscores the volatility and the risk of timing the market incorrectly.

Projection Info

Monte Carlo simulations, which use historical data to project future performance under various scenarios, show a wide range of outcomes for this portfolio. With the majority of simulations indicating positive returns and a median projected increase of 1,361.6%, the potential for growth is evident. However, the broad spread between the 5th and 67th percentiles highlights the uncertainty and risk involved. These projections are useful for understanding potential volatility but remember, they cannot guarantee future results.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no diversification into other asset classes like bonds or real estate. This allocation supports the portfolio's growth orientation but increases sensitivity to market fluctuations. Diversifying across different asset classes can mitigate risk by spreading exposure beyond stocks, which can be particularly volatile. Considering the portfolio's growth goals, integrating a small percentage of alternative assets might balance risk without significantly dampening potential returns.

Sectors Info

  • Technology
    40%
  • Financials
    11%
  • Telecommunications
    8%
  • Industrials
    6%
  • Consumer Discretionary
    5%
  • Health Care
    5%
  • Consumer Staples
    5%
  • Consumer Discretionary
    3%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

With 40% of the portfolio invested in technology, there's a pronounced sector concentration. Other sectors like financial services and communication services have much smaller representations. This heavy tech focus can amplify returns during bull markets in the tech industry but also exposes the portfolio to significant downturns during tech slumps. Diversifying more evenly across sectors could reduce volatility and improve the portfolio's resilience to sector-specific downturns.

Regions Info

  • North America
    98%
  • Asia Developed
    1%
  • Europe Developed
    1%

The geographic allocation is overwhelmingly in North America (98%), with minimal exposure to developed markets in Asia and Europe, and no presence in emerging markets. This concentration enhances exposure to the economic and political risks specific to North America. Broadening geographic diversification could reduce risk by capturing growth in diverse economies and mitigating region-specific downturns.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    31%
  • Mid-cap
    15%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a tilt towards larger companies, with 47% in mega-cap stocks. This bias towards larger companies can provide stability but may limit growth potential compared to small or mid-cap stocks. Considering the portfolio's growth orientation, increasing exposure to smaller companies could introduce higher growth potential, albeit with increased volatility.

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.

While the portfolio demonstrates strong growth potential, its risk-return profile could be optimized. Utilizing the Efficient Frontier concept could identify a mix of investments that achieves the highest expected return for a given level of risk. However, given the current heavy tilt towards technology and large-cap stocks, diversifying across more sectors, asset classes, and market caps could move the portfolio closer to an optimal risk-return balance.

Dividends Info

  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND 1.10%
  • VanEck Semiconductor ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 0.79%

The portfolio's overall dividend yield is relatively modest at 0.79%, reflecting its growth-focused strategy over income generation. For investors prioritizing capital appreciation, this yield level is acceptable, but those seeking income might consider rebalancing towards assets with higher dividend yields. Balancing growth and income can provide a steady cash flow while still participating in market appreciation.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • VanEck Semiconductor ETF 0.35%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.08%

The portfolio benefits from low management costs, with a total expense ratio (TER) averaging 0.08% across the funds. These low costs are advantageous for long-term growth, as they minimize the drag on returns. Maintaining a focus on cost efficiency is crucial, especially in a growth-oriented portfolio where compound returns can significantly enhance performance over time.

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