Growth-focused portfolio with heavy reliance on technology and US markets

Report created on Sep 10, 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 highly concentrated in US equities, with 80% in a Vanguard S&P 500 ETF, 10% in a Vanguard Information Technology Index Fund ETF, and 10% in a Vanguard Total World Stock Index Fund ETF. The heavy weighting towards the S&P 500 and technology sectors indicates a growth-oriented strategy but with low diversification. The portfolio's asset class is exclusively stocks, with no allocation to bonds, cash, or alternative investments, which could increase volatility and risk.

Growth Info

The portfolio has demonstrated a strong historical performance with a Compound Annual Growth Rate (CAGR) of 15.96%. However, it's important to note that past performance is not indicative of future results. The maximum drawdown of -33.66% suggests significant volatility, which aligns with the portfolio's growth profile and high-risk score of 5 out of 7. The days contributing to 90% of returns being concentrated in 37.0 days highlights the portfolio's dependency on short-term gains.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median end portfolio value increase of 834.3%, indicating potential for substantial growth. However, the simulations also underscore the high risk, with a 5th percentile outcome at 180.9% growth, suggesting a significant downside risk. These projections, while useful, are based on historical data and cannot guarantee future performance.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is 100% in stocks, which is typical for growth-focused investors but exposes the portfolio to higher market volatility. This allocation lacks the balance of bonds or other asset classes that could provide income and reduce volatility during market downturns. The absence of cash or alternative investments further limits the portfolio's flexibility and risk mitigation capabilities.

Sectors Info

  • Technology
    40%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

With 40% in technology, the portfolio is heavily tilted towards one sector, increasing its vulnerability to sector-specific risks. Financial services, consumer cyclicals, and other sectors have smaller allocations, which may not sufficiently balance the portfolio's risk. This sector concentration can lead to higher volatility, especially in response to tech industry fluctuations or regulatory changes.

Regions Info

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

The geographic allocation is overwhelmingly North American (96%), with minimal exposure to developed Europe (2%), Asia Emerging (1%), and Japan (1%). This geographic concentration in the US market limits global diversification benefits and increases exposure to US-specific economic and political risks. Expanding into other regions could reduce risk and tap into growth opportunities in emerging and developed markets outside the US.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's market capitalization breakdown shows a strong preference for mega (47%) and big (33%) cap stocks, which tend to be less volatile than smaller companies. However, the low allocation to small (2%) and micro (0%) cap stocks misses out on the higher growth potential these companies may offer. Adjusting this allocation could enhance diversification and potential returns, albeit with increased risk.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard S&P 500 ETF and Vanguard Total World Stock Index Fund ETF indicates overlapping holdings that may not provide the intended diversification benefits. This redundancy can amplify risks during market downturns, as these assets are likely to move in the same direction. Diversifying into non-correlated assets could improve the portfolio's resilience against market 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.

The portfolio's risk-return profile could be optimized by addressing the high correlation between assets and the lack of diversification across asset classes, sectors, and geographies. Utilizing the Efficient Frontier concept could help in finding an allocation that offers the best possible risk-return ratio by adjusting the current asset mix to reduce overlap and enhance diversification without significantly increasing costs.

Dividends Info

  • Vanguard Information Technology Index Fund ETF Shares 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.17%

The portfolio's dividend yield, averaging 1.17%, contributes to its total return. While the focus on growth stocks typically results in lower dividend yields, these payments provide a source of income, which can be particularly valuable during market downturns. Reinvesting dividends can also compound growth over time, enhancing long-term returns.

Ongoing product costs Info

  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.04%. Low costs are crucial for maximizing long-term returns, as they directly reduce the amount taken from the portfolio's performance. The Vanguard funds selected are known for their efficiency and low expense ratios, which is a positive aspect of this portfolio.

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