Growth-focused portfolio with heavy tech exposure and low diversification

Report created on Sep 20, 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 concentrated in the US stock market, with 100% of its assets in stock ETFs and a significant tilt towards technology. The four Vanguard ETFs share a high degree of overlap, particularly in the growth and S&P 500 sectors, which limits diversification. The portfolio's structure suggests a strong growth orientation but comes with the trade-off of increased volatility and risk due to its low diversification score.

Growth Info

The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 17.40%, is impressive. However, the maximum drawdown of -32.65% indicates significant volatility, which is typical for growth-oriented portfolios heavily invested in the stock market. It's important to note that while past performance is a useful indicator, it does not guarantee future results, especially in a portfolio with high sector concentration.

Projection Info

Monte Carlo simulations project a wide range of outcomes, emphasizing the portfolio's high risk and potential for substantial growth. With 998 out of 1,000 simulations showing positive returns, the portfolio appears to have a strong upside. However, the broad range between the 5th and 67th percentiles underscores the uncertainty inherent in stock-heavy, growth-focused portfolios. These projections are based on historical data and should be viewed as one of many tools in assessing future risk and return.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, eschewing bonds, real estate, or other asset classes that could provide income or reduce volatility. This singular focus enhances growth potential but also increases susceptibility to market downturns. Diversifying across different asset classes could offer a buffer during stock market volatility while still allowing for significant growth.

Sectors Info

  • Technology
    44%
  • Telecommunications
    12%
  • Consumer Discretionary
    12%
  • Financials
    10%
  • Health Care
    7%
  • Industrials
    7%
  • Consumer Staples
    3%
  • Real Estate
    2%
  • Energy
    1%
  • Utilities
    1%
  • Basic Materials
    1%

With 44% in technology and significant investments in communication 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 tech and consumer discretionary spending. Balancing with more defensive sectors could reduce volatility without significantly compromising growth potential.

Regions Info

  • North America
    100%

The exclusive focus on North American assets limits exposure to potential growth in other regions, particularly in emerging markets. While this concentration simplifies the portfolio, it misses out on diversification benefits and growth opportunities available internationally. Considering a more global allocation could enhance returns and reduce risk over the long term.

Market capitalization Info

  • Mega-cap
    58%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    2%

The portfolio's emphasis on mega and big cap stocks aligns with its growth and stability objectives, leveraging the potential of established companies. However, the minimal exposure to small and micro-cap stocks means missing out on higher growth potential these companies might offer. Incorporating a broader range of market capitalizations could enhance returns and diversification.

Redundant positions Info

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

The high correlation among the portfolio's assets indicates a redundancy that does not contribute to diversification. This overlap, particularly among the Vanguard ETFs, suggests that the portfolio could be streamlined without sacrificing performance. Reducing correlated assets could improve the portfolio's risk-adjusted returns by lowering volatility without significantly impacting growth potential.

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 composition, while strong in growth potential, is sub-optimal in terms of diversification and risk management. The Efficient Frontier analysis suggests that diversifying across less correlated assets, different sectors, and geographic regions could achieve a better risk-return balance. Prioritizing this optimization could enhance long-term performance by reducing volatility and improving overall returns.

Dividends Info

  • Vanguard S&P 500 ETF 1.10%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Weighted yield (per year) 0.68%

The portfolio's dividend yield of 0.68% is modest, reflecting its growth orientation over income generation. While dividends are not the focus, they can provide a steady income stream and contribute to total returns, especially in volatile markets. Considering assets with higher dividend yields could offer a balance between growth and income, enhancing the portfolio's resilience.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.05%

The portfolio's overall expense ratio of 0.05% is exceptionally low, minimizing the drag on returns due to costs. This efficiency is a strength, allowing more of the investment's return to accrue to the investor. Maintaining low costs is crucial for long-term growth, and this portfolio exemplifies cost-effective investment management.

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