Growth-focused portfolio with heavy emphasis on US large-cap stocks and low diversification
Report created on Jul 9, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 70.57% -
SP SPDR® Portfolio S&P 500 ETF
SPLG - US78464A8541 29.43%
This portfolio is heavily weighted towards US large-cap stocks, with 70.57% in the Schwab U.S. Large-Cap Growth ETF and 29.43% in the SPDR® Portfolio S&P 500 ETF. This composition indicates a strong focus on growth, particularly within the large-cap segment of the market. The concentration in two ETFs, both targeting large-cap equities, suggests a low level of diversification across asset classes, as 100% of the portfolio is allocated to stocks. While this can offer significant growth opportunities, it also exposes the portfolio to higher volatility and sector-specific risks.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 16.75%, with a maximum drawdown of -32.79%. This performance reflects the high growth potential of large-cap US stocks but also underscores the risk of significant declines during market downturns. The fact that 90% of returns came from just 34 days highlights the unpredictability and the importance of staying invested through market cycles to capture gains.
Projection
Monte Carlo simulations, using historical data to project future outcomes, suggest a wide range of potential performances for this portfolio. With 996 out of 1,000 simulations showing positive returns, the portfolio's median projected growth is substantial. However, it's crucial to remember that such simulations are based on past data and cannot guarantee future results. They serve as a tool for understanding potential volatility and the importance of risk management.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely in stocks, with no exposure to other asset classes like bonds or real estate. This singular focus enhances growth potential but also increases susceptibility to stock market fluctuations. Diversifying across different asset classes can mitigate risk and smooth out returns over time, especially during stock market downturns.
Sectors
- Technology 44%
- Telecommunications 13%
- Consumer Discretionary 12%
- Financials 9%
- Health Care 9%
- Industrials 5%
- Consumer Staples 3%
- Basic Materials 2%
- Energy 1%
- Real Estate 1%
- Utilities 1%
Sector allocation is heavily tilted towards Technology (44%), followed by Communication Services and Consumer Cyclicals. This concentration in high-growth sectors aligns with the portfolio's growth objectives but can lead to heightened volatility. Diversifying across a broader range of sectors could reduce risk and provide more stable returns.
Regions
- North America 100%
Geographic exposure is exclusively North American, missing out on potential growth and diversification benefits from developed and emerging markets outside the US. This geographic concentration can limit the portfolio's ability to capitalize on global economic trends and reduce exposure to any single country's economic performance.
Market capitalization
- Mega-cap 59%
- Large-cap 26%
- Mid-cap 14%
- Small-cap 1%
The portfolio's focus on Mega (59%) and Big (26%) cap stocks is consistent with its growth orientation and risk profile. While large-cap stocks tend to be more stable than their smaller counterparts, the portfolio's limited exposure to Medium, Small, and Micro caps restricts opportunities for higher growth rates that these segments may offer.
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.
Considering the portfolio's current composition and risk-return profile, there's room for optimization towards achieving a more efficient risk-return ratio, as suggested by the Efficient Frontier. This could involve diversifying across more asset classes or sectors to improve the portfolio's overall risk-adjusted performance. However, any adjustments should align with the investor's risk tolerance and investment goals.
Dividends
- Schwab U.S. Large-Cap Growth ETF 0.40%
- SPDR® Portfolio S&P 500 ETF 1.20%
- Weighted yield (per year) 0.64%
The portfolio's overall dividend yield of 0.64% reflects its growth focus, as growth stocks typically reinvest earnings rather than pay high dividends. While the yield contributes to the total return, investors looking for income in addition to growth might consider diversifying into assets with higher dividend yields.
Ongoing product costs
- Schwab U.S. Large-Cap Growth ETF 0.04%
- SPDR® Portfolio S&P 500 ETF 0.02%
- Weighted costs total (per year) 0.03%
The portfolio benefits from exceptionally low costs, with a Total Expense Ratio (TER) of just 0.03%. This efficient cost structure supports better long-term performance by minimizing the drag on returns. Keeping costs low is a crucial aspect of maximizing investment growth over time.
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