Growth-focused ETF portfolio with heavy tech exposure and low diversification

Report created on Sep 1, 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 heavily weighted towards ETFs, with a significant 60% allocation to the Vanguard Total Stock Market Index Fund ETF Shares, and a combined 40% in other ETFs focused on large-cap growth, NASDAQ 100, U.S. dividend equity, and S&P 500 momentum. This indicates a strong emphasis on growth-oriented U.S. equities, particularly within the technology sector, given the substantial allocation to tech-heavy ETFs. The portfolio's singular focus on stock ETFs, with no exposure to other asset classes like bonds or real estate, underlines its growth profile but also highlights a low level of diversification.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 15.35%, with a maximum drawdown of -26.12%. This performance suggests robust growth potential but comes with significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 20 days further underscores the portfolio's susceptibility to short-term market movements and the importance of timing in realizing gains.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of potential outcomes. The 50th percentile projection suggests a 684.4% return, indicating strong growth potential. However, it's crucial to note that such simulations assume past trends continue, which may not always be the case. The high positive return rate in 997 out of 1,000 simulations does, however, reinforce the portfolio's strong growth orientation.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is exclusively in stocks, with no diversification into other asset classes like bonds, commodities, or cash equivalents. This singular focus enhances growth potential but also increases risk, particularly in market downturns when non-equity assets might offer a buffer. Diversification across asset classes can mitigate risk and smooth out returns over time, making the portfolio's performance less dependent on the stock market's volatility.

Sectors Info

  • Technology
    35%
  • Financials
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

With 35% allocated to technology, followed by financial services and consumer cyclicals, the portfolio is positioned to benefit from growth in these dynamic sectors. However, this concentration also exposes it to sector-specific risks, such as regulatory changes or economic shifts affecting consumer behavior. The limited exposure to defensive sectors like utilities and consumer staples further emphasizes the portfolio's aggressive growth stance.

Regions Info

  • North America
    99%

The geographic allocation is almost entirely focused on North America (99%), with no exposure to developed European markets, Latin America, or Asia. This concentration on the U.S. market leverages its historical strength and innovation-driven growth sectors like technology. However, it also limits potential gains from global diversification, which can offer growth opportunities in emerging markets and reduce geographic risk.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    32%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega (42%) and big (32%) cap stocks, which are typically less volatile than smaller companies. However, the limited exposure to small (5%) and micro (1%) cap stocks restricts potential high-growth opportunities these segments can offer. Balancing market cap exposure can enhance diversification without significantly compromising growth potential.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Invesco NASDAQ 100 ETF
    High correlation

The high correlation between the Schwab U.S. Large-Cap Growth ETF and the Invesco NASDAQ 100 ETF suggests redundancy, as they likely hold many of the same stocks, particularly in the technology sector. This overlap does not contribute to diversification and may unnecessarily concentrate risk. Reducing exposure to correlated assets can improve the portfolio's risk-adjusted returns by ensuring that each investment contributes to diversification.

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's expected return is slightly below the optimal level suggested by Efficient Frontier analysis, indicating room for improvement in risk-return balance. By reducing overlapping assets and possibly integrating non-correlated investments, the portfolio could achieve a higher expected return for the same level of risk. This optimization process involves reallocating assets to enhance diversification and potentially increase returns without taking on additional risk.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.23%

The portfolio's dividend yield stands at 1.23%, with the Schwab U.S. Dividend Equity ETF contributing a significant 3.70%. While the overall yield is modest, it indicates a balance between growth and income, providing a slight cushion during market downturns. Given the growth focus, the emphasis on dividends is appropriate, but investors seeking higher income might consider increasing allocations to higher-yielding assets.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio's average Total Expense Ratio (TER) of 0.05% is impressively low, minimizing the drag on returns due to costs. This efficiency is crucial for long-term growth, as even small differences in costs can significantly impact compounded returns over time. The careful selection of low-cost ETFs demonstrates a strategic approach to maximizing net returns by minimizing expenses.

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