A growth-focused portfolio with strong U.S. equity emphasis and moderate international exposure
Report created on Mar 9, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 15.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 15.00%
The portfolio is heavily weighted towards the Vanguard S&P 500 ETF, comprising 70% of the total allocation. This suggests a strong focus on large-cap U.S. equities. The remaining 30% is split equally between the Avantis U.S. Small Cap Value ETF and the Vanguard Total International Stock Index Fund ETF Shares, indicating some diversification into small-cap and international markets. Compared to typical benchmarks, this portfolio is more concentrated in large-cap U.S. stocks, which may offer stability but could limit exposure to other growth opportunities.
Growth
Historically, the portfolio has delivered impressive returns, with a Compound Annual Growth Rate (CAGR) of 14.90%. This performance is robust, especially when compared to the broader market averages. However, the maximum drawdown of -35.60% indicates significant volatility during downturns. It's important to remember that past performance is not indicative of future results. Investors should be prepared for potential fluctuations and consider their risk tolerance when evaluating this performance.
Projection
The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. The median outcome shows a 413.1% increase, with 97.4% of simulations yielding positive returns. While these projections are encouraging, they rely on historical trends and assumptions that may not hold true in the future. Investors should use these projections as a guide, not a guarantee, and remain flexible in their strategies.
Asset classes
- Stocks 99%
The portfolio is predominantly invested in stocks (99%), with negligible allocations to cash or other asset classes. This heavy equity weighting aligns with a growth-focused strategy, but it also exposes the portfolio to market volatility. Compared to benchmarks, which often include bonds and other asset classes, this portfolio may benefit from additional diversification to mitigate risk and enhance stability during market downturns.
Sectors
- Technology 27%
- Financials 17%
- Consumer Discretionary 12%
- Industrials 10%
- Health Care 9%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 5%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Sector allocation is diverse, with a notable concentration in technology (27%) and financial services (17%). This composition aligns with common benchmarks but highlights a potential vulnerability to sector-specific downturns, particularly if technology faces regulatory challenges or market corrections. Maintaining a balanced sector allocation can help manage risk and capitalize on different economic cycles. Consider periodically reviewing sector weights to ensure alignment with market conditions.
Regions
- North America 86%
- Europe Developed 6%
- Asia Emerging 3%
- Japan 2%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, the portfolio is heavily skewed towards North America (86%), with limited exposure to other regions. This concentration could affect diversification benefits and increase vulnerability to U.S.-specific economic factors. Expanding international exposure, particularly in emerging markets, may enhance diversification and capture growth opportunities outside the U.S. Regularly assess geographic allocations to align with global economic trends.
Market capitalization
- Mega-cap 39%
- Large-cap 29%
- Mid-cap 15%
- Small-cap 9%
- Micro-cap 7%
The portfolio's market capitalization is tilted towards mega (39%) and big (29%) companies, with smaller allocations to medium, small, and micro-cap stocks. This distribution suggests a preference for stability and established companies but may limit potential high-growth opportunities found in smaller firms. Balancing market caps can enhance diversification and provide exposure to different growth dynamics. Consider adjusting allocations to reflect desired risk-return profiles.
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 current portfolio could be optimized for a better risk-return ratio. By adjusting allocations among existing assets, it may be possible to achieve a more efficient balance. This optimization focuses on maximizing returns for a given level of risk, not necessarily increasing diversification. Periodically reassess the portfolio's efficiency to align with evolving financial goals and market conditions.
Dividends
- Avantis® U.S. Small Cap Value ETF 1.80%
- Vanguard S&P 500 ETF 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 3.10%
- Weighted yield (per year) 1.64%
The portfolio's dividend yield stands at 1.64%, with contributions from all three ETFs. While dividends provide a steady income stream, the focus appears to be more on capital appreciation than income generation. For growth-oriented investors, this balance is appropriate. However, those seeking higher income may explore dividend-focused investments. Regularly evaluate dividend yields to ensure they align with changing income needs and market conditions.
Ongoing product costs
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.07%
The portfolio's total expense ratio (TER) is 0.07%, which is impressively low and supports better long-term returns. This cost efficiency is a positive attribute, as lower fees mean more of the returns are retained by the investor. Keeping expenses minimal is crucial for maximizing growth over time. Continue to monitor and compare costs against similar investment options to ensure ongoing cost-effectiveness.
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