A concentrated tech-focused portfolio with high growth potential and significant risk exposure

Report created on Apr 3, 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 weighted towards equities, with a significant 73% allocated to the Vanguard Total Stock Market Index Fund ETF. The remaining 27% is split between VanEck Semiconductor ETF and Invesco NASDAQ 100 ETF, both of which focus on specific market segments. Compared to a more balanced benchmark, this portfolio lacks diversification, which can expose it to sector-specific risks. To enhance stability, consider introducing other asset classes like bonds or real estate, which can buffer against market volatility and provide a more balanced risk-return profile.

Growth Info

Historically, the portfolio has performed impressively, with a Compound Annual Growth Rate (CAGR) of 14.98%. This growth rate, while strong, comes with a notable maximum drawdown of 30.26%, indicating significant potential losses during downturns. The portfolio's performance is heavily dependent on a few high-return days, which could introduce volatility. Diversifying the portfolio could help mitigate such risks, ensuring more consistent returns over time. It's important to remember that past performance is not indicative of future results, so diversification remains key.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows a median growth of 676.9%. However, there's a wide range of potential outcomes, with the 5th percentile at 42.7% and the 67th at 1,095.2%. While the simulations suggest a high likelihood of positive returns, with 988 out of 1,000 simulations showing gains, the projections are based on historical trends and may not account for future market changes. Regularly reviewing and adjusting the portfolio can help align it with evolving market conditions and personal financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is 100% in stocks, which offers high growth potential but also increases risk. Without the stabilizing presence of other asset classes like bonds or cash, the portfolio may experience heightened volatility. Comparing to a typical balanced benchmark, this lack of diversification could lead to more dramatic swings in value. Introducing a small percentage of bonds or other non-equity assets could help smooth returns and provide a buffer against stock market downturns, aligning the portfolio more closely with diversified investment strategies.

Sectors Info

  • Technology
    44%
  • Financials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The portfolio is heavily concentrated in the technology sector, which comprises 44% of the holdings. This concentration could lead to increased volatility, especially during periods of market uncertainty or interest rate changes. While the tech sector has driven significant growth, over-reliance on it could expose the portfolio to sector-specific risks. Diversifying into other sectors like healthcare or consumer staples could reduce volatility and improve risk-adjusted returns. A more balanced sector allocation can help manage risk while still capturing growth opportunities.

Regions Info

  • North America
    96%
  • Asia Developed
    2%
  • Europe Developed
    2%

Geographically, the portfolio is heavily skewed towards North America, with 96% of assets allocated there. This concentration limits exposure to international markets, potentially missing out on growth opportunities in emerging economies. While the U.S. market has been strong, diversifying into regions like Asia or Europe could enhance growth potential and reduce reliance on a single economic environment. A more globally diversified portfolio can mitigate geopolitical risks and benefit from varied economic cycles across regions.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    34%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution leans heavily towards mega and big-cap stocks, comprising 77% of the holdings. While these stocks provide stability and are less volatile, they may offer lower growth potential compared to smaller-cap stocks. Including more medium and small-cap stocks could enhance growth prospects, though they come with increased risk. Balancing market cap exposure can help capture growth from emerging companies while maintaining stability from established ones, creating a more dynamic portfolio.

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 could potentially be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio. Currently, the portfolio is heavily skewed towards high-risk, high-return assets. By adjusting the allocation to include more diversified assets, the portfolio could achieve a more favorable risk-return balance. This doesn't mean sacrificing growth but rather finding the right mix of assets to maximize returns for a given level of risk. Regular rebalancing can help maintain this optimal allocation.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • VanEck Semiconductor ETF 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.09%

The portfolio's dividend yield is modest at 1.09%, reflecting its focus on growth rather than income. While dividends can provide a steady income stream, the current yield is typical for growth-focused portfolios. Investors seeking higher income may consider adding dividend-focused funds or stocks. However, the primary goal here appears to be capital appreciation. Balancing growth and income could enhance overall returns, especially during periods of market stagnation, when capital gains are harder to achieve.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is low at 0.10%, which is beneficial for long-term returns. Lower costs mean more of your money is working for you, compounding over time. The Vanguard Total Stock Market Index Fund ETF, with a TER of 0.03%, contributes significantly to this efficiency. Keeping an eye on costs and opting for low-fee funds can maximize returns. It's crucial to regularly review fees to ensure they remain competitive, as higher costs can erode gains, especially in volatile markets.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey