A growth-oriented portfolio with a strong focus on US equities and diversified international exposure
Report created on Aug 2, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00% -
VX Vanguard Extended Market Index Fund ETF Shares
VXF - US9229086528 10.00%
This portfolio is heavily weighted towards US equities, with a 70% allocation in the Vanguard S&P 500 ETF, indicating a strong belief in the performance of large-cap US companies. The inclusion of the Vanguard Total International Stock Index Fund ETF and the Vanguard Extended Market Index ETF diversifies the portfolio across international markets and US mid-to-small cap stocks, respectively. This structure suggests a growth-oriented strategy with a bias towards the stability and growth potential of large-cap US stocks, complemented by broader market exposure.
Growth
With a Compound Annual Growth Rate (CAGR) of 12.71%, the portfolio has demonstrated strong historical performance. The maximum drawdown of -34.61% indicates a relatively high risk, consistent with the growth profile and the portfolio's risk score of 5 out of 7. It's important to note that while past performance is a useful indicator, it does not guarantee future results. The days contributing most to returns highlight the portfolio's sensitivity to market movements, underscoring the importance of staying invested through market cycles for growth investors.
Projection
The Monte Carlo simulation, using 1,000 iterations, projects a wide range of outcomes with the median suggesting a 295% return. This analysis helps in understanding potential future scenarios but is based on historical data and assumptions that may not account for unforeseen market changes. Therefore, while useful for planning, these projections should be one of many tools in decision-making.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's allocation is almost entirely in stocks (99%), with a minimal cash holding. This aligns with a growth-focused strategy but comes with higher volatility and risk. Diversification across different asset classes could provide a buffer against stock market downturns, suggesting a potential area for adjustment depending on risk tolerance.
Sectors
- Technology 28%
- Financials 16%
- Consumer Discretionary 11%
- Industrials 10%
- Health Care 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 3%
- Basic Materials 3%
- Real Estate 3%
- Utilities 3%
The sector allocation shows a significant tilt towards technology, financial services, and consumer cyclicals, which are sectors often associated with growth but also with higher volatility. The concentration in these sectors could amplify the portfolio's performance during market upswings and downturns. Balancing sector exposure could mitigate risk without drastically compromising growth potential.
Regions
- North America 81%
- Europe Developed 8%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
Geographic allocation is heavily skewed towards North America (81%), with modest exposure to developed European markets and emerging markets in Asia. This concentration in developed markets, particularly the US, is typical for growth-oriented investors but limits exposure to potentially higher growth in emerging markets. Considering geopolitical and economic diversification could enhance the portfolio's resilience.
Market capitalization
- Mega-cap 42%
- Large-cap 31%
- Mid-cap 19%
- Small-cap 6%
- Micro-cap 2%
The portfolio's emphasis on mega and big cap stocks (73%) aligns with its growth and stability objectives, leveraging the potential of large companies with proven track records. However, the inclusion of medium, small, and micro caps, though minimal, introduces additional growth avenues and diversification benefits, balancing the risk-return profile.
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 Efficient Frontier, the portfolio could be optimized for a better risk-return ratio by adjusting asset allocation. While the current setup leans heavily on growth, slight adjustments towards assets with lower correlation and different risk profiles could enhance efficiency. This doesn't imply a need for overhauling but rather fine-tuning to align more closely with the investor's risk tolerance and goals.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard Extended Market Index Fund ETF Shares 1.10%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.53%
The portfolio's average dividend yield of 1.53% contributes to total returns, with the international fund offering a higher yield. While not the focus of a growth strategy, dividends provide a passive income stream and a cushion during market volatility, underscoring their role in a diversified investment approach.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Extended Market Index Fund ETF Shares 0.06%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
The low total expense ratio (TER) of 0.04% is commendable, ensuring that costs do not significantly erode returns. In a growth-oriented portfolio, minimizing costs is crucial for maximizing compounding growth over time. This efficient cost structure supports better long-term performance.
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