We’re less than a month away from the end of 2024, and it’s been a terrific year for my Stocks and Shares ISA, so far. Since January, my portfolio has delivered more than a 37% total return, outpacing even the S&P 500, which is equally on an impressive 28% winning streak.

But what’s been driving these market-beating returns? And what am I doing to try and replicate this success in 2025?

Balancing growth and risk

Right now, I have 24 stocks in my ISA. Most investors would agree this suggests it’s a fairly diversified portfolio. Yet while these investments cover a range of industries and geographies, my ISA’s actually highly concentrated, with just over 60% invested in just five stocks: Shopify, Arista Networks, Alpha Group International (LSE:ALPH), Intuitive Surgical, and Mastercard.

This level of concentration isn’t how my portfolio started out. In fact, each of these positions initially received the same amount of starting capital. However, over time, continued success paired with some top-ups has increased their weighting and influence on my overall ISA. And that concentration has paid off, with all five achieving double-digit returns over the last 11 months.

Of course, concentration also has its downsides, particularly when it comes to short-term share price volatility. And should any of these businesses fail, a significant chunk of my growth portfolio could be in jeopardy. Needless to say, not everyone has this level of risk tolerance. However, I remain confident. Why? Because, as with every stock across all my portfolios, these businesses have strong competitive moats.

Arista Networks, Intuitive Surgical, and Mastercard are already practically monopolies. Shopify’s doing its best to become one with close to 10.3% of the global e-commerce market under its thumb. And Alpha Group International has carved out its own niche in the fintech alternative banking space with competitors trying and failing to take it down.

Investing before the crowd

The 30%+ return my Stocks and Shares ISA has delivered in 2024 hasn’t been driven by the investments I made this year. Instead, these gains are coming from purchases back in 2022 and 2023. With the US stock market taking a nosedive as inflation and interest rates went through the roof, investors had the opportunity to snap up high-quality businesses at dirt cheap prices.

Today, my strategy remains the same. There are still plenty of underappreciated growth stocks in the market, including potentially Alpha Group International.

Adverse economic conditions are creating a lot of headwinds within the alternative asset management industry that Alpha serves. Meanwhile, decreased spending from businesses awaiting lower interest rates is reducing demand for its currency risk management services as well, resulting in slower-than-normal growth.

This cyclicality’s a risk that isn’t likely to disappear any time soon. And the impact of prolonged economic downturns is apparent when looking at its financials. However, as this macroeconomic headwind slowly dissipates, Alpha could be set for a far more explosive 2025 and beyond.

That’s why I’m buying more while it’s still under temporary pressure ahead of what could be an impressive rebound over the next 12-18 months. And it’s not the only growth stock I’ve been buying this year.