A growth tilted equity heavy portfolio with strong historic returns and moderate diversification

Report created on Aug 23, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily tilted to equities through two broad ETFs plus a small satellite tech ETF. Around four fifths is in US-focused equity, with a minor cash buffer and little in other assets. For a “balanced” risk label, this mix is actually closer to a growth profile, since there is almost no stabilizing exposure like high-quality bonds. That matters because portfolio mix is the main driver of both long-term returns and how much the account can swing in a crash. If this level of equity feels right, sticking with it can be powerful. If volatility ever feels uncomfortable, gradually adding a stabilizing asset bucket could smooth the ride.

Growth Info

Historic performance, with a compound annual growth rate (CAGR) of about 16%, has been excellent and ahead of what many benchmarks delivered over similar periods. CAGR is basically the “average speed” of growth per year, smoothing out ups and downs. The max drawdown of about -28% shows that, at its worst point, the portfolio dropped almost a third from a previous peak, which is typical of equity-heavy mixes. Only a small number of days created most of the gains, which reinforces why staying invested through rough patches can matter. It’s important to remember that past outperformance doesn’t guarantee similar future results, especially after a strong run for large-cap North American stocks.

Projection Info

The Monte Carlo simulation, which runs many “what if” scenarios using historical patterns and randomness, shows a wide range of possible futures. The 5th percentile outcome more than triples the original value, while the median (50th percentile) and upper ranges grow much more. That looks very attractive on paper and aligns with a growth-oriented, equity-focused approach. But simulations can be overly optimistic if recent returns were unusually strong or if future economic conditions differ. They’re best used as a rough map, not a promise. Treat the high-return paths as upside potential and the lower-end paths as stress tests, and think about whether both ends of that range feel acceptable for your time horizon and comfort level.

Asset classes Info

  • US Equity
    78%
  • Stocks
    10%
  • Cash
    1%

Asset class exposure is dominated by equities, with only a token cash slice and no meaningful allocation to defensive assets. Compared with many “balanced” benchmarks that hold a sizable chunk in bonds or other stabilizers, this mix leans clearly toward capital growth rather than capital preservation. That’s beneficial for long-term wealth building and has contributed to strong performance, but it also means deeper drops are possible in major downturns. From a diversification standpoint, equity exposure is spread across many companies, which is positive. To strengthen overall balance, it could be worth considering whether adding a dedicated stabilizing sleeve would better match the stated risk score and help during sharp equity selloffs.

Sectors Info

  • Technology
    31%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is broad, covering all major areas of the market, which is a good sign for diversification. There is a clear tilt toward technology, with meaningful weight in financials and consumer-oriented areas as well. This sector mix actually looks very similar to many large-cap global benchmarks, which supports the diversification score and suggests the portfolio is not overly concentrated in niche themes. Tech-heavy allocations can grow rapidly but also tend to swing more when interest rates change or when growth expectations shift. If that growth tilt is intentional, it aligns well with the strong historic CAGR. If stability is a bigger priority, slightly dialing back the growth sectors could reduce bumpiness without fully abandoning them.

Regions Info

  • North America
    89%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

Geographically, the portfolio is strongly concentrated in North America, with only modest exposure to Europe and other developed regions, and minimal emerging market exposure. This matches many common benchmarks that are also heavily weighted to the US, and that’s been very rewarding in the last decade. It also means results are closely tied to North American economic and policy conditions. The limited allocation to emerging and non–North American markets slightly reduces global diversification, but it keeps currency and political risk comparatively simple and familiar. If the goal is to keep things straightforward, this is a solid structure. If broader global diversification is desired, gradually increasing non–North American exposure could spread risk across more economic cycles.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

By market capitalization, the portfolio leans heavily toward mega and large companies, with only modest mid-cap exposure and very little in small caps. That’s very much in line with major global equity benchmarks, which are also dominated by large, established firms. This structure is a positive for stability and liquidity: big companies tend to have more diversified businesses and sturdier balance sheets, reducing company-specific blowups. The trade-off is less exposure to the potentially higher growth (and higher risk) of smaller companies. For many investors, this large-cap focus is a sweet spot between growth and volatility. If an extra growth kick is desired, a controlled increase in mid or smaller names could be considered, while being mindful of added swings.

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.

From a risk–return standpoint, this portfolio already sits in a strong position on a notional Efficient Frontier, which is the set of mixes that give the best possible return for each level of risk using the available building blocks. Here, the building blocks are the existing ETFs and cash; “efficiency” means getting the most expected reward for the volatility taken, not maximizing diversification or income. Given the high equity share and strong historic performance, the portfolio likely falls on the upper-growth segment of that curve. Small tweaks—shifting a bit toward stabilizing assets or slightly adjusting the growth tilt—could move it closer to an ideal risk–return balance for a balanced profile while preserving its core strength in broad, low-cost equity exposure.

Dividends Info

  • TD Global Technology Leaders Index ETF 0.10%
  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.64%

The portfolio’s overall dividend yield is modest, under 1%, which is typical for growth-oriented, large-cap equity mixes. Dividends are the cash payments companies make to shareholders, and over long periods they can meaningfully contribute to total return, especially when reinvested. In this case, most of the long-term growth is likely to come from price appreciation rather than income. That aligns well with investors focused on building wealth rather than funding current spending. For someone who eventually wants more cash flow—say, approaching retirement—it could make sense down the road to shift part of the allocation toward higher-yielding areas. For now, the relatively low yield is consistent with the portfolio’s strong growth tilt and tech-heavy composition.

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