Growth-focused portfolio with high exposure to US large-cap stocks and low diversification

Report created on Jul 20, 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 is heavily concentrated in U.S. large-cap stocks, with 70% in the Vanguard S&P 500 ETF and 30% in the Schwab U.S. Large-Cap Growth ETF. Its allocation is entirely in stocks, showcasing a clear growth orientation but limited diversification across asset classes and geographies. The portfolio's sector distribution leans significantly towards technology, which constitutes 38% of the allocation, followed by financial services and consumer cyclicals. This composition reflects a focus on sectors often associated with high growth but also higher volatility.

Growth Info

Historically, the portfolio has demonstrated strong performance with a Compound Annual Growth Rate (CAGR) of 15.46%. It experienced a maximum drawdown of -33.48%, indicating significant volatility during certain periods. The days contributing most to the returns were relatively few, suggesting that the portfolio's performance is heavily reliant on strong market days. This performance, while impressive, should be considered with the understanding that past success does not guarantee future results.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows a wide range of potential future returns. The median projected return is substantial, but it's important to note that these simulations assume past market behavior can predict future outcomes, which isn't always the case. This method helps illustrate potential volatility and the uncertainty inherent in stock investments.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is 100% in stocks, with no diversification into other asset classes such as bonds or real estate. This allocation strategy is typical for growth-oriented investors willing to accept higher risk for the potential of higher returns. However, the lack of diversification across asset classes can increase the portfolio's volatility and susceptibility to market downturns.

Sectors Info

  • Technology
    38%
  • Financials
    12%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

With a heavy emphasis on technology, financial services, and consumer cyclicals, the portfolio is positioned to benefit from growth in these sectors. However, this concentration also exposes it to sector-specific risks. Diversifying across a broader range of sectors could help mitigate these risks and potentially smooth out returns over time.

Regions Info

  • North America
    100%

The portfolio's geographic exposure is entirely focused on North America, missing out on potential growth opportunities and risk mitigation benefits of international diversification. Including assets from developed and emerging markets outside of North America could enhance returns and reduce geographic risk.

Market capitalization Info

  • Mega-cap
    52%
  • Large-cap
    31%
  • 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 less volatile than smaller companies. However, this focus may limit exposure to high-growth opportunities in the medium and small-cap segments.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Schwab U.S. Large-Cap Growth ETF limits the portfolio's diversification benefits. Since both ETFs track large-cap U.S. stocks, their performance is likely to move in tandem, which doesn't reduce risk as effectively as holding less correlated assets would.

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's current risk-return profile could be optimized by addressing the high correlation between its holdings. Diversifying across different asset classes, sectors, and geographies could improve the portfolio's risk-adjusted returns. The Efficient Frontier concept suggests that an optimal mix of assets can achieve the highest expected return for a given level of risk. Exploring diversification opportunities would be a strategic step towards optimization.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 0.96%

The portfolio's dividend yield, while modest, contributes to its total return. Dividends provide a source of income, which can be particularly valuable during market downturns or for investors seeking cash flow. However, the focus on growth stocks, which typically reinvest profits rather than pay dividends, explains the portfolio's overall lower yield.

Ongoing product costs Info

  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from low costs, with total expense ratios (TERs) of 0.03% for the Vanguard S&P 500 ETF and 0.04% for the Schwab U.S. Large-Cap Growth ETF. These low costs are favorable for long-term growth, as they minimize the drag on performance. Cost efficiency in investment management is crucial for maximizing returns over time.

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