Growth-oriented portfolio with a strong focus on US large-cap stocks and technology sector
Report created on Jul 17, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 72.90% -
RS Invesco S&P 500® Equal Weight ETF
RSP - US46137V3574 27.10%
The portfolio is heavily weighted towards two ETFs: 72.90% in the Schwab U.S. Large-Cap Growth ETF and 27.10% in the Invesco S&P 500® Equal Weight ETF. This composition suggests a strong preference for growth-oriented, large-cap US equities, with a particularly high concentration in the technology sector. The portfolio's diversification is low, as indicated by its diversification score of 2 out of 5, primarily because it is fully invested in stocks with no exposure to other asset classes or geographic regions outside North America.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 16.00%, with a maximum drawdown of -33.92%. These figures suggest that while the portfolio has the potential for high returns, it also carries a significant level of risk, as evidenced by the steep maximum drawdown. The performance is largely driven by the growth of large-cap stocks, particularly in the technology sector, which can be volatile.
Projection
Using Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of potential outcomes. With 992 out of 1,000 simulations resulting in positive returns, the median projected growth is substantial. However, it's important to note that such simulations are based on past data and cannot guarantee future results. They are a useful tool for understanding potential volatility and risk but should not be the sole basis for investment decisions.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no diversification into other asset classes such as bonds, real estate, or commodities. This concentration in stocks, especially in the growth-oriented and large-cap segments, enhances the portfolio's potential for high returns but also increases its susceptibility to market volatility. Diversifying across different asset classes can help mitigate risk and smooth out returns over time.
Sectors
- Technology 40%
- Consumer Discretionary 12%
- Telecommunications 11%
- Health Care 10%
- Financials 9%
- Industrials 7%
- Consumer Staples 3%
- Basic Materials 2%
- Real Estate 2%
- Utilities 2%
- Energy 2%
A 40% allocation to the technology sector, followed by consumer cyclicals and communication services, indicates a strong focus on growth-driven sectors. While this sectoral allocation has likely contributed to the portfolio's high historical returns, it also increases the risk of volatility, especially in market downturns. Diversifying more evenly across sectors could reduce risk without necessarily compromising growth potential.
Regions
- North America 100%
The portfolio's geographic allocation is exclusively to North America, missing out on potential opportunities in developed and emerging markets outside the US. This geographic concentration can expose the portfolio to region-specific risks and limit exposure to global growth trends. Incorporating international equities could enhance diversification and potentially improve risk-adjusted returns.
Market capitalization
- Mega-cap 48%
- Mid-cap 25%
- Large-cap 23%
- Small-cap 4%
The portfolio's bias towards mega and large-cap stocks, with a minor allocation to medium and small caps, aligns with its growth and risk profile. While large-cap stocks typically offer stability and resilience, incorporating a broader mix of market capitalizations could provide additional diversification benefits and access to faster-growing, albeit riskier, small and medium-sized companies.
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 current allocation shows a strong bias towards growth and lacks diversification across asset classes and geographies. While this approach has historically provided high returns, it comes with increased volatility and risk. Optimizing the portfolio using the Efficient Frontier could identify a mix of assets that achieves the best possible risk-return ratio, potentially suggesting a broader diversification to improve stability without significantly sacrificing growth potential.
Dividends
- Invesco S&P 500® Equal Weight ETF 1.60%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Weighted yield (per year) 0.73%
The portfolio's overall dividend yield of 0.73% reflects its growth orientation, as growth stocks typically reinvest earnings rather than pay high dividends. While the yield contributes to total returns, the primary focus here is on capital appreciation. Investors seeking regular income in addition to growth might consider a balanced approach that includes higher-dividend-yielding assets.
Ongoing product costs
- Invesco S&P 500® Equal Weight ETF 0.20%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Weighted costs total (per year) 0.08%
With a total expense ratio (TER) of 0.08%, the portfolio benefits from relatively low costs, which is commendable. Lower costs directly translate to higher net returns over time, especially important in a growth-focused strategy where compounding plays a significant role.
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