Growth-focused portfolio with a strong tilt towards technology and US markets
Report created on Aug 1, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
QQ Invesco QQQ Trust
QQQ - US46090E1038 50.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 30.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00%
The portfolio is heavily weighted towards the Invesco QQQ Trust (50%), which primarily consists of large-cap technology stocks, followed by the Vanguard Total Stock Market Index Fund ETF Shares (30%) and the Vanguard Total International Stock Index Fund ETF Shares (20%). This composition suggests a strong growth orientation, with a significant emphasis on the US market (80% of geographic allocation). The technology sector dominates (39%), reflecting a high-risk, high-reward strategy. The diversification score indicates a broad range of exposures, yet the concentration in tech and US equities presents specific risks and opportunities.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 15.56%, with a maximum drawdown of -31.77%. This performance indicates significant growth potential but comes with substantial volatility. The days contributing to 90% of returns are notably few, suggesting that the portfolio's gains are concentrated in short bursts, typical of growth-focused investments. Comparing this to benchmark indices might reveal whether this volatility aligns with the investor's risk tolerance and long-term goals.
Projection
Monte Carlo simulations, using historical data to project future outcomes, show a wide range of potential portfolio values. The median outcome (50th percentile) suggests a 468.9% increase, while the 5th and 67th percentiles indicate a 65.6% and 685.6% increase, respectively. These projections underscore the portfolio's growth potential, though it's important to remember that such simulations have limitations and cannot predict future market conditions accurately.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio is almost entirely invested in stocks (99%), with a negligible cash holding (1%), underscoring its growth-focused strategy. This allocation is suitable for investors with a high-risk tolerance and a long-term investment horizon. However, the lack of diversification across asset classes may increase volatility and risk, especially in market downturns.
Sectors
- Technology 39%
- Consumer Discretionary 12%
- Telecommunications 12%
- Financials 9%
- Industrials 8%
- Health Care 7%
- Consumer Staples 6%
- Basic Materials 3%
- Energy 2%
- Utilities 2%
- Real Estate 1%
The sector allocation shows a heavy tilt towards technology (39%), followed by consumer cyclicals and communication services (each 12%). This concentration in high-growth sectors can enhance returns but also increases sensitivity to sector-specific downturns. Diversifying into more defensive sectors or increasing allocations to underrepresented sectors could mitigate some risks.
Regions
- North America 80%
- Europe Developed 9%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Latin America 1%
- Africa/Middle East 1%
Geographically, the portfolio is heavily skewed towards North America (80%), with minimal exposure to emerging markets and other developed regions. This concentration benefits from the robust performance of US equities but limits global diversification. Increasing international exposure, especially to emerging markets, could offer additional growth opportunities and risk mitigation.
Market capitalization
- Mega-cap 49%
- Large-cap 32%
- Mid-cap 15%
- Small-cap 3%
- Micro-cap 1%
The portfolio's market capitalization breakdown shows a preference for mega (49%) and big-cap (32%) stocks, which typically offer stability and steady growth. However, the relatively small allocation to small (3%) and micro-cap (1%) stocks suggests missed opportunities for higher growth, albeit with increased risk. A slight rebalancing towards smaller-cap stocks could enhance growth prospects.
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.
Considering the portfolio's current composition and risk profile, optimization using the Efficient Frontier could suggest reallocating assets to achieve the best possible risk-return ratio. This might involve adjusting the balance between US and international stocks or between technology and other sectors. However, any reallocation should align with the investor's risk tolerance, investment horizon, and financial goals.
Dividends
- Invesco QQQ Trust 0.50%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.19%
The portfolio yields an average dividend of 1.19%, with the highest yield from the Vanguard Total International Stock Index Fund ETF Shares (2.90%). While dividends contribute to total returns, the portfolio's focus on growth stocks, which often reinvest profits rather than pay dividends, explains the modest overall yield. Investors seeking income in addition to growth might consider a higher allocation to income-generating assets.
Ongoing product costs
- Invesco QQQ Trust 0.20%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.12%
The total expense ratio (TER) of 0.12% is impressively low, enhancing long-term return potential by minimizing cost drag. This cost efficiency is particularly beneficial in a growth-oriented portfolio, where compounding plays a critical role in wealth accumulation. Maintaining low costs while optimizing for growth and diversification should remain a priority.
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