Growth-focused portfolio with high technology sector exposure and low diversification

Report created on Oct 6, 2025

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a high risk tolerance and a focus on long-term capital growth. The ideal investor is likely comfortable with market fluctuations and has a time horizon that allows for recovery from potential downturns. This profile fits someone who believes strongly in the technology sector's potential and prefers growth over income, understanding that the high concentration in tech and lack of diversification can lead to significant volatility.

Positions

The portfolio is heavily weighted towards the technology sector, with a 50% allocation in the Technology Select Sector SPDR® Fund and another significant portion in the Vanguard S&P 500 ETF, which itself has a substantial tech component. This concentration suggests a strong belief in the tech sector's growth potential but presents a high risk due to low diversification. The portfolio's asset class is solely stocks, with no presence in bonds, real estate, or alternative investments, further emphasizing its growth orientation but also its susceptibility to market volatility.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 19.45%, the portfolio has shown impressive historical performance, significantly outpacing many traditional investment benchmarks. However, the Max Drawdown of -32.31% highlights the risk associated with this high concentration in the tech sector. The days contributing to 90% of returns being so few indicate that the portfolio's gains are highly concentrated in specific market conditions, which might not be replicable under different economic scenarios.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a wide spread of possible returns for this portfolio. With the 50th percentile at a 1,130.3% increase, it shows potential for substantial growth. However, the significant spread to the 5th percentile at 221.3% underscores the high risk. These projections, while useful for planning, should be approached with caution as they cannot predict unforeseen market shifts.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks aligns with its growth profile but limits its ability to hedge against volatility through diversification. This all-equity approach can offer high returns but also exposes investors to greater short-term risk, particularly in a downturn. Including a mix of asset classes could reduce volatility without necessarily compromising long-term growth potential.

Sectors Info

  • Technology
    68%
  • Financials
    7%
  • Consumer Discretionary
    5%
  • Telecommunications
    5%
  • Health Care
    4%
  • Industrials
    4%
  • Consumer Staples
    3%
  • Energy
    2%
  • Utilities
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

A 68% allocation to technology underscores a heavy bet on this sector's continued outperformance. While tech has driven market gains in recent years, this concentration increases vulnerability to sector-specific risks. The minimal exposure to other sectors like Financial Services, Consumer Cyclicals, and Healthcare suggests an opportunity to diversify and mitigate some of this risk.

Regions Info

  • North America
    100%

The portfolio's 100% allocation to North America, particularly the U.S., reflects a common home bias but overlooks potential opportunities and risk mitigation offered by global diversification. Exposure to developed European markets or emerging markets could provide growth opportunities outside of the U.S. technology sector and reduce geographical risk.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    36%
  • Mid-cap
    14%
  • Small-cap
    1%

The focus on Mega and Big cap stocks, comprising 85% of the portfolio, indicates a preference for established, large-scale companies, likely due to their perceived stability and growth potential. However, the minimal exposure to Medium and Small cap stocks misses out on the higher growth potential these companies can offer, albeit with higher risk.

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.

Given the portfolio's current composition, there's room for optimization towards the Efficient Frontier, which represents the most efficient allocation for the desired risk-return profile. Adjusting the asset allocation to include a broader range of asset classes and sectors could improve the portfolio's risk-adjusted returns, making it more resilient to market fluctuations while still targeting growth.

Dividends Info

  • Vanguard S&P 500 ETF 1.10%
  • Technology Select Sector SPDR® Fund 0.50%
  • Weighted yield (per year) 0.80%

The overall dividend yield of 0.80% is modest, reflecting the growth-focused nature of the portfolio. While reinvesting these dividends can contribute to compounding growth, investors seeking regular income might find the yield insufficient. Balancing growth stocks with higher dividend-yielding investments could provide a more attractive income component without significantly compromising growth potential.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Technology Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from low costs, with a Total Expense Ratio (TER) of 0.06%, which is excellent for maximizing net returns over time. Low costs are crucial for long-term growth, as they allow a greater portion of investment returns to compound. This is a strong aspect of the portfolio, supporting better performance relative to more expensive alternatives.

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