Growth-oriented portfolio with high technology exposure and low diversification

Report created on Aug 6, 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 76% of the allocation, with the remainder spread thinly across a few other sectors. All investments are in ETFs focused on growth, particularly within the technology sector and large-cap stocks. The concentration in technology and growth stocks, while potentially lucrative, exposes the portfolio to sector-specific risks and volatility. The diversification is notably low, with a heavy reliance on the performance of a single sector and market cap size.

Growth Info

Historically, this portfolio has shown an impressive Compound Annual Growth Rate (CAGR) of 20.29%, with significant returns concentrated in a few days, indicating volatility and the impact of short-term, high-growth periods. The maximum drawdown of -34.87% highlights the high-risk nature of this investment strategy, where substantial declines are possible. These figures underline the portfolio's aggressive growth focus but also its susceptibility to sharp market movements.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a potential 1,037.9% return. However, the significant spread between the 5th and 67th percentiles indicates a high level of uncertainty and risk. While the simulations offer optimistic growth prospects, they also reflect the portfolio's volatility and the importance of considering a broad range of potential outcomes in planning.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no allocation to bonds, real estate, or other asset classes that could provide income or reduce volatility. This singular focus on growth stocks, particularly in the technology sector, amplifies both the potential for high returns and the risk of significant losses. Incorporating a mix of asset classes could help mitigate risk without necessarily compromising long-term growth potential.

Sectors Info

  • Technology
    76%
  • Consumer Discretionary
    8%
  • Telecommunications
    6%
  • Financials
    3%
  • Health Care
    3%
  • Industrials
    1%
  • Consumer Staples
    1%
  • Real Estate
    1%

With technology overwhelmingly dominant, the portfolio's performance is closely tied to the fortunes of one sector. While technology has been a strong performer, sector-specific risks, such as regulatory changes or shifts in consumer preferences, could disproportionately impact the portfolio. Diversifying across more sectors could reduce vulnerability to single-sector downturns.

Regions Info

  • North America
    100%

The exclusive focus on North America, particularly the U.S., limits exposure to potential growth in other regions, including emerging markets. This geographical concentration increases the portfolio's sensitivity to domestic market fluctuations and misses out on global diversification benefits that could reduce risk and tap into growth elsewhere.

Market capitalization Info

  • Mega-cap
    62%
  • Large-cap
    24%
  • Mid-cap
    8%
  • Small-cap
    4%
  • Micro-cap
    1%

The emphasis on mega and large-cap stocks aligns with the portfolio's growth and technology focus but limits exposure to the potentially higher growth rates of smaller companies. While smaller companies carry higher risk, they can also offer diversification benefits and opportunities for outsized gains.

Redundant positions Info

  • Vanguard Russell 1000 Growth Index Fund ETF Shares
    Vanguard Information Technology Index Fund ETF Shares
    Vanguard Mega Cap Growth Index Fund ETF Shares
    High correlation

The high correlation among the ETFs indicates overlapping exposures and a concentration of risk. This redundancy limits the effectiveness of diversification as a risk management tool. Reducing overlap by selecting ETFs with different focuses or incorporating assets with lower correlations could enhance portfolio resilience.

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's current configuration suggests room for optimization, particularly in reducing correlated assets to enhance diversification benefits. While the focus on growth stocks, especially in technology, aligns with aggressive growth objectives, incorporating a broader mix of sectors, geographies, and asset classes could improve the risk-return profile without drastically compromising growth potential.

Dividends Info

  • Vanguard Mega Cap Growth Index Fund ETF Shares 0.40%
  • Vanguard Information Technology Index Fund ETF Shares 0.50%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 0.46%

The dividend yield of around 0.46% is relatively low, reflecting the growth orientation of the portfolio. While reinvesting dividends from growth stocks can compound returns over time, the portfolio lacks higher-yielding investments that could provide income stability and reduce volatility.

Ongoing product costs Info

  • Vanguard Mega Cap Growth Index Fund ETF Shares 0.07%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The total expense ratio (TER) of 0.09% is impressively low, helping to maximize net returns. Keeping costs low is crucial for long-term growth, as even small differences in fees can significantly impact compounded returns over time. This aspect of the portfolio is well-optimized for cost efficiency.

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