A tech tilted low cost growth portfolio with strong historic returns and limited diversification

Report created on Nov 4, 2024

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 built mainly around one broad stock ETF, with a big tilt toward a tech-focused ETF and a small aggressive allocation ETF on top. That means three positions control everything, and they’re all broadly growth-tilted. Structurally, this is simple and easy to follow, but it’s also why the diversification score is low. A more typical “growth” benchmark usually mixes in more bonds and more variety across styles. Keeping the core holding but trimming overlapping funds and introducing one or two genuinely different building blocks could help smooth the ride without abandoning the overall growth focus.

Growth Info

Historically, a 16.6% compound annual growth rate (CAGR) is excellent. CAGR is like your average speed on a road trip, showing how fast money grew per year on average. Starting with $10,000, that pace would have grown to around $46,000 in 10 years, far ahead of many broad growth benchmarks. The tradeoff shows up in the max drawdown of about -33%, meaning at one point you’d have seen a roughly one‑third drop. That kind of swing is normal for a growth profile. Keeping expectations realistic means being prepared for similar temporary drops in future markets.

Projection Info

The Monte Carlo analysis ran 1,000 simulated futures using past return and volatility patterns to create many possible paths. At the 50th percentile, the simulation ends at about 741% of the starting value, while the pessimistic 5th percentile still ends around 146%. Monte Carlo is useful because it shows a range of outcomes, not a single forecast, but it leans heavily on historical behavior, which can change. With an annualized return across simulations near 17.9%, expectations are clearly optimistic. A sensible next step is to mentally anchor on a lower long‑term return and treat the strong projections as an upside scenario rather than a guarantee.

Asset classes Info

  • Stocks
    98%
  • Bonds
    2%

The asset mix is overwhelmingly stocks at 98%, with only about 2% in bonds and effectively nothing in cash or alternatives. That’s much more aggressive than a typical growth benchmark, which usually includes a noticeably higher bond slice to cushion downturns. Stocks drive long‑term growth, but heavy stock exposure also means deeper dips when markets fall. This allocation is consistent with a high growth mindset, but the tiny bond share barely helps with stability. Increasing the steady, defensive components slightly could meaningfully reduce volatility while still keeping the portfolio clearly in the growth camp.

Sectors Info

  • Technology
    48%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Telecommunications
    8%
  • Health Care
    7%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

Sector-wise, the picture is tech-dominated: about 48% in technology, with the rest spread across financials, consumer areas, communication services, healthcare, and smaller slices of others. This tech emphasis explains both the strong historical gains and the potential for higher volatility, especially when interest rates rise or investors rotate away from growth themes. The core broad ETF keeps the structure reasonably aligned with common benchmarks, which is a positive. However, layering a dedicated tech ETF on top amplifies the tilt. Dialing back that extra tech slice would bring sector weights closer to mainstream indices and reduce single-theme risk.

Regions Info

  • North America
    96%
  • Europe Developed
    2%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    1%

Geographically, this portfolio is almost entirely tied to North America at about 96%, with tiny allocations to developed Europe, Japan, and emerging Asia. Many global benchmarks are still US-heavy, but usually allow a larger non-US share for broader diversification. The upside is alignment with the US market, which has been a strong performer in recent decades. The downside is that returns and risk are tightly linked to one region’s economy, currency, and policy shifts. Gradually adding more non-US exposure while keeping the US as the anchor could spread out that regional risk without changing the growth orientation.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    32%
  • Mid-cap
    16%
  • Small-cap
    3%
  • Micro-cap
    1%

By market cap, the exposure leans heavily into mega and big companies, with modest allocations to mid, small, and micro caps. Large firms tend to be more stable, widely followed, and often dominate benchmark indices, which helps explain why the portfolio behaves much like mainstream large-cap markets. Including some smaller companies can add growth potential and diversification because they often react differently to economic cycles. In this case, the small and micro slices are present but minor. Slightly boosting the mid and small cap share within diversified funds could improve long-term growth potential while still keeping risk within a growth profile.

Redundant positions Info

  • Vanguard S&P 500 ETF
    iShares Core Aggressive Allocation ETF
    High correlation

Correlation measures how often investments move together; a value near 1 means they usually go in the same direction. Here, the core S&P 500 ETF and the aggressive allocation ETF are highly correlated, so they tend to rise and fall together. When holdings are tightly linked like this, they offer little extra diversification during market stress, even if they look different on paper. The tech ETF also overlaps a lot with the core US stock market. Streamlining these overlapping funds into fewer, broader positions or adding holdings that behave differently could improve the portfolio’s ability to handle sharp market swings.

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.

Risk versus return can be tuned using the Efficient Frontier, which is a curve showing the best possible risk-return mix using only the current building blocks and different weightings between them. Efficiency here means the highest expected return for a given level of volatility, not necessarily the most diversified or tax-friendly setup. Because the funds in this portfolio are highly correlated, the Efficient Frontier is fairly narrow; shifting weights alone won’t dramatically change the risk pattern. The biggest improvement in efficiency would likely come from removing redundant exposures and then, if desired, blending in at least one meaningfully different asset type.

Dividends Info

  • iShares Core Aggressive Allocation ETF 2.00%
  • Vanguard Information Technology Index Fund ETF Shares 0.40%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 1.05%

The overall dividend yield is about 1.05%, driven mainly by the broad ETF and the aggressive allocation fund, while the tech ETF pays relatively little. Dividends are the cash payouts companies send to shareholders, and they can help smooth total returns, especially when prices move sideways. For a growth-leaning investor, a lower yield is normal because the focus is on companies reinvesting profits for expansion. This payout level fits that approach. If a future goal includes more income, gradually shifting a portion toward funds with higher and more stable yields could balance growth with a stronger cash-flow component.

Ongoing product costs Info

  • iShares Core Aggressive Allocation ETF 0.15%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

The total expense ratio (TER) across the portfolio is impressively low at about 0.06%. TER is like a management fee taken each year; even small differences compound over time. These numbers are better than many active or high-fee options and align strongly with index-investing best practices. Keeping costs this low supports better long-term performance, because less money is lost to fees every year. At this stage, there’s little to improve on the cost front. The bigger opportunity is simplifying overlapping holdings while preserving or even lowering the blended TER through broad, low-cost funds.

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