Balanced portfolio with a strong tilt towards technology and communication services

Report created on Nov 3, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards technology and communication services, with significant positions in Alphabet Inc, Microsoft Corporation, and the Vanguard S&P 500 ETF. This concentration on a few large-cap stocks and sectors, while providing potential for high returns, also exposes the portfolio to sector-specific risks. The presence of the Realty Income Corporation and the Schwab U.S. Dividend Equity ETF introduces some diversification, but overall, the portfolio's diversification is low.

Growth Info

The portfolio has experienced a Compound Annual Growth Rate (CAGR) of 26.07%, which is impressive. However, its maximum drawdown of -17.56% indicates significant volatility. The days contributing to 90% of returns being so few suggest that the portfolio's performance is highly dependent on a handful of extremely good days, underscoring its riskiness.

Projection Info

The Monte Carlo simulation, which forecasts future performance based on historical data, shows a concerning trend with a majority of simulations predicting negative returns. This indicates potential underlying issues with the portfolio's current structure or market conditions that may not favor the portfolio's heavy sector concentrations.

Asset classes Info

  • Stocks
    100%

With 100% of the portfolio allocated to stocks, the investor is exposed to high market risk. While stocks have the potential for high returns, they also come with significant volatility. The absence of other asset classes such as bonds or real estate investment trusts (REITs) outside of stock positions means the portfolio lacks cushioning against stock market downturns.

Sectors Info

  • Technology
    29%
  • Telecommunications
    28%
  • Real Estate
    11%
  • Financials
    7%
  • Health Care
    6%
  • Consumer Discretionary
    6%
  • Industrials
    4%
  • Consumer Staples
    4%
  • Energy
    3%
  • Utilities
    1%
  • Basic Materials
    1%

The portfolio's heavy allocation to technology and communication services sectors reflects a growth-oriented strategy. However, this concentration increases vulnerability to sector-specific downturns. The inclusion of real estate and dividend equity ETFs provides some income and diversification, but the overall sector balance could be improved to mitigate risks.

Regions Info

  • North America
    100%

The exclusive focus on North American assets limits global diversification, potentially missing out on growth opportunities in developed and emerging markets outside the USA. Geographic diversification can reduce risk by spreading exposure across different economies and market conditions.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    30%
  • Mid-cap
    11%
  • Micro-cap
    1%
  • Small-cap
    1%

The portfolio's emphasis on mega and large-cap stocks aligns with its balanced profile, aiming for growth while seeking to minimize volatility. However, the minimal exposure to medium, small, and micro-cap stocks restricts potential for higher growth rates that these segments can offer, albeit with increased 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.

The Efficient Frontier analysis suggests that the portfolio could achieve a higher expected return of 36.83% at the same risk level. This indicates room for optimization, possibly by diversifying asset classes and sectors, and rebalancing towards a more efficient allocation.

Dividends Info

  • Alphabet Inc Class A 0.30%
  • Microsoft Corporation 0.60%
  • Realty Income Corporation 5.10%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 1.42%

The dividend yield of the portfolio, at 1.42%, contributes to its total return. Realty Income Corporation and the Schwab U.S. Dividend Equity ETF offer higher yields, providing a steady income stream. However, the overall yield could be optimized to balance growth and income, especially considering the portfolio's risk profile.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from low costs, with the Total Expense Ratios (TER) of its ETFs being notably competitive. This cost efficiency is a positive aspect, enhancing long-term returns by minimizing the drag on performance due to fees.

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