Growth-oriented portfolio with high exposure to US markets and technology sector

Report created on Jul 20, 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 U.S. equities, with a significant focus on the S&P 500 and the broader stock market, as well as a targeted investment in fintech innovation. This composition suggests a growth-oriented strategy but with low diversification across asset classes and geographic regions. The heavy reliance on just three ETFs, two of which track large segments of the U.S. stock market, indicates a concentrated risk in market performance and sector movements, particularly in technology and financial services.

Growth Info

Historically, this portfolio has shown impressive growth, with a Compound Annual Growth Rate (CAGR) of 18%. However, the maximum drawdown of -36.62% highlights potential volatility and risk, especially during market downturns. The days contributing to 90% of returns being limited suggests that much of the portfolio’s performance can be attributed to a handful of exceptionally good trading days, a common characteristic of growth-focused investments that carry higher risk.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, indicate a wide range of potential future values for this portfolio, with a median increase of 735.5%. While simulations show a high likelihood of positive returns, the significant spread between the 5th and 67th percentiles underscores the risk and uncertainty inherent in a growth-focused strategy. It's important to remember that these projections are speculative and depend on historical market behavior continuing into the future.

Asset classes Info

  • Stocks
    99%
  • Other
    1%

The portfolio's assets are almost entirely in stocks (99%), with a marginal allocation to other asset classes. This high concentration in equities is typical for growth-oriented portfolios but comes with increased volatility and risk. Diversifying across more asset classes, such as bonds or real estate, could reduce volatility without necessarily compromising long-term growth potential.

Sectors Info

  • Technology
    33%
  • Financials
    19%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

Sector allocation is heavily weighted towards technology and financial services, which are known for their high growth potential but also for their susceptibility to market fluctuations. The underrepresentation of traditionally more stable sectors like utilities and consumer defensive indicates a higher risk profile. Balancing sector exposure can help mitigate sector-specific risks and smooth out returns over time.

Regions Info

  • North America
    97%
  • Europe Developed
    1%
  • Latin America
    1%
  • Asia Developed
    1%

With 97% of assets allocated to North America, the portfolio's geographic exposure is highly concentrated. This concentration benefits from strong U.S. market performance but lacks international diversification, which can offer growth opportunities in emerging markets and reduce exposure to U.S.-specific economic risks.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    34%
  • Mid-cap
    22%
  • Small-cap
    2%
  • Micro-cap
    1%

The portfolio's emphasis on mega and big cap stocks aligns with its growth focus, leveraging the stability and potential of large, established companies. However, the minimal exposure to small and micro-cap stocks limits opportunities for outsized gains from smaller companies' growth. Introducing more small to mid-cap stocks could enhance returns while introducing manageable risk.

Redundant positions Info

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

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates redundancy, as they cover many of the same stocks. This overlap does not contribute to diversification and exposes the portfolio to amplified losses during market corrections. Reducing overlap by reallocating assets could enhance diversification benefits.

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.

Optimizing this portfolio involves addressing the high correlation between its major components to improve diversification. The Efficient Frontier suggests that there's room to enhance the risk-return profile by adjusting allocations or introducing new, uncorrelated assets. This could potentially increase returns for the same level of risk or decrease risk without sacrificing returns.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 0.96%

The portfolio's dividend yield is modest, reflecting its growth orientation over income generation. While dividends contribute to total return, the focus here is clearly on capital appreciation. Investors looking for regular income might consider increasing exposure to higher-dividend-yielding assets.

Ongoing product costs Info

  • ARK Fintech Innovation ETF 0.75%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.17%

The portfolio's total expense ratio (TER) is relatively low, thanks to the cost-efficient nature of the ETFs chosen. However, the ARK Fintech Innovation ETF's higher fee of 0.75% slightly raises the overall cost. Keeping costs low is crucial for enhancing long-term returns, so it's beneficial that the majority of the portfolio is in low-cost ETFs.

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