A growth-focused portfolio with heavy tech exposure and low diversification benefits

Report created on Jul 21, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards large-cap stocks, particularly in the technology sector, with significant investments in the Fidelity 500 Index Fund and Vanguard S&P 500 ETF, which together make up 60% of the portfolio. This concentration in similar assets, alongside direct investments in major technology companies like NVIDIA, Advanced Micro Devices, Amazon, Alphabet, and Microsoft, indicates a strong focus on growth through tech dominance. However, this approach also reflects limited diversification, as evidenced by the portfolio's moderate diversification score.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 23.71%, the portfolio has shown impressive historical performance. This high growth rate is likely attributed to the significant tech sector weighting and the bull market in tech stocks in recent years. However, the maximum drawdown of -58.93% signals potential high volatility and risk, particularly in market downturns, which is consistent with the portfolio's growth profile and high risk score of 5 out of 7.

Projection Info

The Monte Carlo simulation, using 1,000 iterations, projects a wide range of outcomes with a median end portfolio value increase of 4,287.9%. This optimistic projection underscores the portfolio's growth potential but also reflects its risk, given the substantial variance in simulation outcomes. It's crucial to remember that these projections are based on historical data and cannot guarantee future performance.

Asset classes Info

  • Stocks
    100%

Currently, the portfolio is entirely allocated to stocks, with no presence in bonds, cash, or alternative investments. This allocation aligns with a high-growth investment strategy but exposes the portfolio to higher market volatility and risk. Diversifying across different asset classes could provide a buffer against stock market fluctuations and enhance risk-adjusted returns.

Sectors Info

  • Technology
    40%
  • Telecommunications
    11%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Consumer Discretionary
    4%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The technology sector dominates the portfolio at 40%, followed by communication services and financial services. This concentration in tech and related sectors may offer high growth potential but also increases susceptibility to sector-specific risks. Diversifying into underrepresented sectors could mitigate this risk and stabilize returns over different market cycles.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

With 90% of assets allocated to North America, primarily the U.S., the portfolio has minimal exposure to international markets. This geographic concentration may limit opportunities for global diversification and risk reduction. Expanding into developed and emerging markets outside the U.S. could capture growth in other economies and reduce geographic risk.

Market capitalization Info

  • Mega-cap
    63%
  • Large-cap
    24%
  • Mid-cap
    12%
  • Small-cap
    1%

The portfolio's focus on mega (63%) and big (24%) cap stocks supports its growth orientation but may limit exposure to the potentially higher returns of mid and small-cap investments. While larger companies tend to be more stable, diversifying into smaller caps could offer additional growth opportunities and further diversification benefits.

Redundant positions Info

  • Fidelity 500 Index Fund
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Fidelity 500 Index Fund and Vanguard S&P 500 ETF indicates redundancy, as these investments move in tandem and do not contribute to diversification. Reducing overlap by reallocating funds from one of these assets could enhance the portfolio's diversification without significantly altering its growth trajectory.

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 current portfolio's heavy overlap in S&P 500 investments and concentrated tech exposure suggest an opportunity for optimization. By employing the Efficient Frontier concept, reallocating assets to reduce overlap and increase diversification across sectors, geographies, and asset classes could improve the risk-return profile without sacrificing growth potential.

Dividends Info

  • Fidelity 500 Index Fund 0.90%
  • Alphabet Inc Class C 0.40%
  • Microsoft Corporation 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 0.94%

The portfolio's overall dividend yield of 0.94% is relatively low, reflecting its growth-focused strategy over income generation. While reinvesting dividends from growth stocks can compound returns, investors seeking regular income might consider increasing allocations to higher-yielding assets or sectors.

Ongoing product costs Info

  • Fidelity 500 Index Fund 0.02%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from exceptionally low costs, with a total expense ratio (TER) averaging 0.02%. This cost efficiency is commendable, as lower costs directly translate to higher net returns over time. Maintaining focus on low-cost investments will continue to serve the portfolio well.

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