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A growth-focused portfolio with strong emphasis on US large-cap stocks and minimal diversification

Report created on Aug 1, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio predominantly invests in U.S. large-cap stocks, as evidenced by its 100% allocation to stock ETFs that focus on the S&P 500 and similar indices. The heavy concentration in just a few ETFs, all tracking large segments of the American stock market, indicates a strategy aimed at capturing the growth of the U.S. economy. However, this approach results in low diversification, both geographically and across different asset classes, which could expose the portfolio to higher volatility and specific market risks.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 15.26%, with a maximum drawdown of -33.41%. 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 drawdown. The days contributing to 90% of the returns being concentrated in a small number of trading sessions indicate that timing the market plays a crucial role in achieving these returns, which is inherently unpredictable.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a potential increase of 652.5% in value, but with simulations ranging significantly from the 5th to the 67th percentile. It's important to note that while these simulations can provide insight, they are not predictive and carry limitations, as they cannot account for unforeseen market changes or black swan events.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no representation from other asset classes such as bonds, real estate, or commodities. This lack of diversification can increase the portfolio's susceptibility to market volatility, as all investments are subject to the same market forces. Diversifying across different asset classes can help mitigate risk and reduce the impact of stock market fluctuations on the portfolio's overall performance.

Sectors Info

  • Technology
    37%
  • Financials
    13%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The sector allocation within the portfolio shows a heavy emphasis on technology, financial services, and consumer cyclicals, which are sectors that typically offer higher growth potential. However, this concentration also means the portfolio may be more sensitive to changes in these sectors. For instance, regulatory changes in the technology sector or shifts in consumer behavior could disproportionately affect the portfolio's performance.

Regions Info

  • North America
    100%

The portfolio's geographic allocation is exclusively focused on North America, with no exposure to international markets. This concentration in a single region increases the risk of localized economic downturns affecting the overall performance. Expanding into international markets could provide additional growth opportunities and help spread risk.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    32%
  • Mid-cap
    16%
  • Small-cap
    1%

The portfolio's market capitalization breakdown shows a strong preference for mega and big-cap stocks, which are generally considered to be more stable and less volatile than smaller-cap stocks. However, this focus may limit the portfolio's exposure to the potentially higher growth rates of mid and small-cap companies.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    iShares Russell 1000 Growth ETF
    Vanguard S&P 500 ETF
    SPDR S&P 500 ETF Trust
    Vanguard S&P 500 Growth Index Fund ETF Shares
    High correlation

The high correlation among the portfolio's assets, particularly the ETFs tracking the S&P 500 and related indices, indicates a redundancy that does not contribute to diversification. This overlap means that the portfolio may not be as diversified as the number of holdings suggests, as similar assets are likely to move in tandem during market fluctuations.

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.

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The portfolio's current structure, while focused on growth, could benefit from optimization to improve its risk-return profile. The Efficient Frontier analysis suggests that reducing overlap in highly correlated assets could enhance diversification without necessarily sacrificing potential returns. This optimization aims to achieve a more efficient allocation that balances risk and return more effectively.

Dividends Info

  • iShares Russell 1000 Growth ETF 0.40%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR S&P 500 ETF Trust 1.10%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 0.99%

The portfolio's dividend yield stands at 0.99%, which contributes to its total return. While the focus on growth stocks often means a lower yield, dividends can provide a steady income stream and help cushion the impact of stock price volatility. However, the primary focus remains on capital appreciation rather than income generation.

Ongoing product costs Info

  • iShares Russell 1000 Growth ETF 0.19%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

With a total expense ratio (TER) of 0.06%, the portfolio benefits from relatively low costs, which is advantageous for long-term growth. Lower costs mean more of the investment's return is retained, which can significantly impact the portfolio's growth over time. This aspect of the portfolio is well-optimized, supporting better performance without unnecessary expense drag.

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