A growth-focused portfolio with strong US exposure and significant tech weighting

Report created on Apr 10, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of two significant ETFs, Vanguard Total Stock Market Index Fund ETF Shares (55%) and Vanguard Total International Stock Index Fund ETF Shares (40%), with a smaller allocation to NVIDIA Corporation (5%). This structure provides broad market exposure, balancing US and international stocks. Compared to a typical benchmark, the portfolio leans heavily on US equities, which can offer stability and growth but may limit exposure to emerging markets. Consider diversifying further to include more asset classes like bonds to reduce volatility, especially during market downturns.

Growth Info

Historically, the portfolio has shown a strong CAGR of 12.52%, indicating robust growth over time. However, the maximum drawdown of -49.99% highlights the potential for significant losses in adverse market conditions. Compared to benchmarks, this performance is impressive but comes with higher volatility. It's important to remember that past performance doesn't guarantee future results. To mitigate risks, consider strategies such as rebalancing or diversifying into less volatile assets, especially if nearing retirement or needing to preserve capital.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with end portfolio values ranging from 280.1% to 4,627.8%. The 50th percentile indicates a potential return of 2,743.1%. These simulations use historical data to predict future outcomes, but it's important to note they can't account for unforeseen events. While the annualized return of 32.30% across simulations is optimistic, diversifying into different asset classes or geographies could further stabilize returns, particularly in uncertain economic climates.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks (99%), with minimal cash holdings. This stock-heavy allocation can drive growth but also increases exposure to market volatility. Compared to typical benchmarks, this allocation is aggressive, suitable for investors with a higher risk tolerance. To enhance diversification and reduce risk, consider introducing bonds or other fixed-income securities. This approach can provide a buffer during market downturns and offer more consistent returns over time, aligning with a balanced investment strategy.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation reveals a significant concentration in technology (27%) and financial services (17%). While these sectors can drive growth, they also introduce volatility, especially during economic shifts or interest rate changes. Compared to common benchmarks, this tech-heavy allocation may increase risk during tech sector downturns. Diversifying into underrepresented sectors like utilities or consumer defensive could provide stability. This strategy can help mitigate risks associated with sector-specific downturns, ensuring a more balanced approach to sector exposure.

Regions Info

  • North America
    63%
  • Europe Developed
    16%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation shows a strong emphasis on North America (63%), with limited exposure to emerging markets. This US-centric focus can offer stability but may miss growth opportunities in developing regions. Compared to benchmarks, the portfolio's geographic diversification could be improved by increasing allocations to emerging markets or other international regions. This strategy can enhance growth potential and reduce reliance on any single market, offering a more balanced approach to geographic risk and opportunity.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization is skewed towards mega (45%) and big-cap (29%) stocks, with minimal exposure to small and micro-cap stocks. This allocation aligns with benchmarks and provides stability, as larger companies tend to be less volatile. However, smaller-cap stocks can offer higher growth potential, albeit with increased risk. To optimize growth, consider gradually increasing exposure to medium and small-cap stocks, balancing the potential for higher returns with the need for risk management.

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 portfolio could benefit from optimization using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. This method doesn't guarantee diversification but aims to maximize returns for a given level of risk. By adjusting allocations among existing assets, it's possible to achieve a more efficient portfolio. Consider consulting a financial advisor to explore potential reallocations, ensuring that the portfolio aligns with your risk tolerance and long-term objectives.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 2.09%

The portfolio's dividend yield stands at 2.09%, with higher contributions from the international ETF. Dividends can provide a steady income stream, beneficial for reinvestment or income needs. Compared to benchmarks, this yield is moderate, supporting growth and income objectives. For those seeking higher income, consider increasing exposure to dividend-focused investments. This strategy can enhance cash flow without significantly impacting growth potential, aligning with a balanced income and growth approach.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, thanks to the cost-efficient ETFs. Low costs are beneficial as they improve net returns over time, aligning with best practices for cost management. Compared to typical benchmarks, this cost structure is highly favorable. Continue to monitor and maintain low-cost investments, as even small increases in fees can erode returns over the long term. This focus on cost efficiency supports better overall portfolio performance.

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