A growth-focused portfolio with significant technology exposure and limited international diversification

Report created on Mar 21, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of three ETFs: 60% in Vanguard Total Stock Market Index Fund, 30% in Vanguard Growth Index Fund, and 10% in Vanguard Total International Stock Index Fund. The portfolio leans heavily towards U.S. equities, reflecting a growth-oriented strategy. Compared to a balanced benchmark, this composition emphasizes domestic growth stocks, which can lead to higher volatility. To enhance diversification, consider incorporating additional asset classes or increasing international exposure. This approach could mitigate risk and provide more balanced returns over time.

Growth Info

Historically, this portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 13%. A hypothetical initial investment would have grown significantly, although it experienced a maximum drawdown of -33.79%, indicating periods of substantial volatility. Compared to benchmarks, such a drawdown is typical for growth-focused portfolios. While past performance is promising, remember it doesn't guarantee future results. To manage risk, consider strategies to reduce drawdowns, such as diversifying into less correlated assets or employing tactical asset allocation.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential outcomes, suggests a median future return of 327.7% for this portfolio. With 972 out of 1,000 simulations showing positive returns, the outlook appears favorable. However, the simulation's reliance on historical data means these projections are not guaranteed. To improve potential outcomes, consider optimizing asset allocation or reducing exposure to highly correlated assets. This proactive approach could enhance the portfolio's resilience to market fluctuations.

Asset classes Info

  • Stocks
    99%

The portfolio is heavily weighted towards stocks, comprising 99% of total assets. This concentration aligns with a growth strategy but limits diversification. Compared to a balanced benchmark, the lack of bonds or alternative assets may increase volatility. Including different asset classes, such as fixed income or commodities, could provide a buffer against market downturns and stabilize returns. Diversifying across asset classes can help reduce risk and improve the risk-return profile over time.

Sectors Info

  • Technology
    35%
  • Financials
    13%
  • Consumer Discretionary
    12%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Utilities
    2%

With 35% allocated to technology, this portfolio is tech-heavy, which aligns with its growth focus. Other sectors include financial services (13%) and consumer cyclicals (12%). Compared to common benchmarks, the high tech allocation may lead to increased volatility, particularly during interest rate hikes. To mitigate sector-specific risks, consider diversifying into underrepresented sectors like utilities or healthcare. A more balanced sector allocation could provide stability and reduce the impact of sector-specific downturns.

Regions Info

  • North America
    91%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%

The portfolio's geographic exposure is predominantly North American at 91%, with limited international diversification. This concentration can lead to higher risk if the U.S. market underperforms. Compared to global benchmarks, the lack of exposure to emerging markets or other regions may limit growth opportunities. Increasing international allocations, particularly in emerging markets, could enhance diversification and provide access to different economic cycles, potentially improving long-term returns.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio is heavily weighted towards large-cap stocks, with 49% in mega caps and 28% in big caps. This focus provides stability but may limit growth opportunities found in smaller companies. Compared to benchmarks, the limited exposure to small and micro caps could reduce potential upside. Consider increasing allocations to mid and small-cap stocks to capture growth potential in emerging companies. This diversification can enhance returns while balancing the inherent volatility of smaller market caps.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Growth Index Fund ETF Shares
    High correlation

The portfolio's assets are highly correlated, especially between the Vanguard Total Stock Market and Growth Index Funds. This correlation suggests limited diversification benefits during market downturns. Highly correlated assets tend to move together, increasing overall portfolio risk. To improve diversification, consider adding less correlated assets or funds with different investment styles. This strategy can help mitigate risk and enhance the portfolio's resilience to market volatility.

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 benefit from optimization using the Efficient Frontier, which identifies the best risk-return ratio. Currently, the portfolio's high correlation among assets limits diversification benefits. By adjusting allocations or including less correlated assets, the portfolio could achieve better efficiency. This optimization focuses on improving the risk-return balance, not necessarily diversification. Consider reviewing the asset mix to enhance returns while managing risk effectively.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.21%

The portfolio's total dividend yield is 1.21%, primarily driven by the Vanguard Total Stock Market Index Fund's 1.3% yield. While dividends contribute to total returns, this yield is relatively low for income-focused investors. Growth-oriented portfolios typically prioritize capital appreciation over income. If income is a goal, consider reallocating to higher-yielding assets or dividend-focused funds. This shift could enhance cash flow without compromising growth potential, balancing income and growth objectives.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.04%. Such low costs support better long-term performance by minimizing the drag on returns. Compared to industry averages, these expenses are highly competitive. Maintaining low costs is crucial for optimizing returns, especially in a growth-focused portfolio. Continue monitoring for potential cost reductions or more cost-effective alternatives, but rest assured that current expenses align well with best practices for cost efficiency.

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