A tech-heavy growth-focused portfolio with significant exposure to large-cap U.S. equities

Report created on Jan 26, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is largely composed of ETFs and a single stock, with a heavy emphasis on technology. The iShares Core S&P 500 ETF dominates at nearly 44%, providing broad market exposure. VanEck Semiconductor ETF and NVIDIA Corporation together account for a significant tech tilt, making up almost 40% of the portfolio. The Schwab U.S. Dividend Equity ETF adds a focus on dividend yield. This composition leans towards growth, reflecting a moderately diversified strategy. Balancing such a portfolio often involves assessing the concentration in tech and considering additional diversification to mitigate sector-specific risks.

Growth Info

The portfolio has demonstrated a remarkable historic performance with a CAGR of 27.04%. However, it also experienced a significant max drawdown of nearly 60%, indicating high volatility. Such performance suggests strong growth potential but also highlights the risk of substantial losses. Comparing this to a benchmark like the S&P 500, which historically returns around 10% annually, underscores the aggressive nature of this portfolio. Investors might consider maintaining a cash reserve or diversifying further to cushion against potential downturns.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, indicate a wide range of potential returns. The median outcome suggests a substantial growth of over 4,000%, with all simulations showing positive returns. However, it's crucial to remember that these projections are not guarantees, as they rely on past performance. The optimistic projections reflect the portfolio's growth potential, but investors should be prepared for variability and consider regular reviews to adjust to changing market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, lacking exposure to other asset classes like bonds or real estate. While this can drive higher returns during bull markets, it also increases risk, especially during downturns. Diversifying across asset classes can reduce volatility and provide more stable returns. Adding bonds, for example, could offer a hedge against stock market declines. Investors focused on growth might accept this risk, but those seeking stability should consider a more balanced asset allocation.

Sectors Info

  • Technology
    56%
  • Financials
    9%
  • Health Care
    7%
  • Consumer Discretionary
    7%
  • Industrials
    5%
  • Telecommunications
    5%
  • Consumer Staples
    5%
  • Energy
    4%
  • Utilities
    1%
  • Basic Materials
    1%
  • Real Estate
    1%

With 56% of the portfolio in technology, there's a notable sector concentration. This can lead to higher volatility, particularly if the tech sector faces downturns. Other sectors like financial services and healthcare provide some diversification but are significantly underrepresented. Comparing this to a benchmark like the S&P 500, which has a more balanced sector distribution, suggests a need for diversification. Investors might explore increasing exposure to underrepresented sectors to reduce risk and enhance stability.

Regions Info

  • North America
    95%
  • Asia Developed
    3%
  • Europe Developed
    2%

The portfolio's geographic allocation is heavily skewed towards North America, with 95% exposure. This limits international diversification, which can be crucial for mitigating regional risks and capturing global growth opportunities. Common benchmarks often have more balanced geographic exposure. Considering investments in developed and emerging markets outside North America could enhance diversification and potentially improve risk-adjusted returns. This could be particularly beneficial if U.S. markets face headwinds.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    36%
  • Mid-cap
    14%
  • Small-cap
    1%

The portfolio is predominantly invested in mega and big-cap stocks, making up 84% of the allocation. This focus provides stability and liquidity but may limit exposure to higher-growth opportunities typically found in smaller-cap stocks. Including more medium and small-cap stocks could enhance growth potential, albeit with increased risk. Balancing market capitalization exposure can help achieve a mix of stability and growth, aligning with long-term investment goals.

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 portfolio could benefit from optimization using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with the existing assets. This involves adjusting allocations to maximize returns for a given level of risk. While the portfolio is growth-focused, fine-tuning asset weights could enhance efficiency. This doesn't necessarily mean adding new assets but rather optimizing the current mix to improve risk-adjusted returns. Investors might consider consulting with a financial advisor for personalized optimization strategies.

Dividends Info

  • iShares Core S&P 500 ETF 1.30%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • VanEck Semiconductor ETF 0.40%
  • Weighted yield (per year) 1.25%

Dividend yields in this portfolio are moderate, with the Schwab U.S. Dividend Equity ETF contributing the most at 3.5%. Overall, the portfolio's yield is 1.25%, which is relatively low for income-focused strategies. Dividends can provide a steady income stream, especially during volatile markets. Investors seeking income might consider increasing their allocation to dividend-paying stocks or ETFs. However, for those prioritizing growth, the current focus remains appropriate, albeit with potential for increased income diversification.

Ongoing product costs Info

  • iShares Core S&P 500 ETF 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • VanEck Semiconductor ETF 0.35%
  • Weighted costs total (per year) 0.10%

The portfolio boasts impressively low costs, with a total expense ratio (TER) of 0.10%. This is advantageous for long-term performance, as lower costs mean more of the portfolio's returns are retained. The iShares Core S&P 500 ETF and Schwab U.S. Dividend Equity ETF contribute to this low-cost structure. Investors should continue to monitor costs, as they can significantly impact net returns over time. Keeping costs low is a smart strategy that aligns with best practices for maximizing investment efficiency.

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