A growth focused equity portfolio with strong large cap tilt and modest global diversification

Report created on Aug 20, 2024

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

This portfolio is very simple and very equity-heavy, with about two thirds in a broad US index ETF, one fifth in a core global equity ETF, and the rest in developed markets outside North America. Cash and other assets are effectively zero. For a “balanced” risk label, this is actually closer to a pure growth equity setup than a mix of stocks and bonds. That matters because the portfolio will usually grow faster over long periods but can swing sharply in market downturns. To smooth the ride, one possible approach is adding a small allocation to steadier assets that tend to hold up when stocks fall.

Growth Info

Historically, this mix has delivered a very strong compound annual growth rate (CAGR) of about 16%. CAGR is the “average yearly speed” of growth over time, similar to average speed on a long road trip. The flip side is a maximum drawdown of roughly -28%, meaning at some point the portfolio dropped that much from a prior peak. This pattern fits an equity-dominated approach: strong upside but painful dips. The return profile looks better than many broad benchmarks over the last decade, but that period was unusually kind to large US companies, so it’s wise not to assume this pace will continue forever.

Projection Info

The Monte Carlo analysis, which runs 1,000 random what‑if paths using historical patterns, shows a wide range of potential futures. Monte Carlo is like simulating many alternate timelines based on past ups and downs, then seeing where you might end up. The median result of about 593% suggests strong long‑term growth is plausible, with even the pessimistic 5th percentile more than doubling. Still, all of these outcomes are built from historical data, which may not repeat if interest rates, inflation, or global growth look very different. Using these projections as a planning guide rather than a promise keeps expectations realistic.

Asset classes Info

  • US Equity
    76%
  • Stocks
    5%

By asset class, this portfolio is almost entirely equity, with roughly three quarters explicitly in US equity and the rest in broad global equity buckets. There’s effectively no fixed income, real assets, or alternatives. Compared to a classic “balanced” benchmark that might be around 60% stocks and 40% bonds, this is far more growth-oriented. The high equity mix is great for long time horizons and for investors comfortable with volatility. For anyone wanting a smoother experience, gradually introducing a meaningful slice of lower-volatility assets can help reduce big swings without fully giving up on long-term growth potential.

Sectors Info

  • Technology
    30%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    9%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector-wise, the portfolio is well spread across all major economic areas, which is a big plus. Technology leads at about 30%, followed by financials, consumer cyclicals, industrials, communication services, and healthcare. This is quite similar to many broad market benchmarks, which is a strong indicator of healthy diversification. The tech tilt means the portfolio can benefit from innovation and productivity trends but may feel more volatile when interest rates rise or when growth stocks fall out of favour. Someone wanting a smoother sector profile could periodically check that no single sector drifts far beyond their comfort band.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%
  • Asia Emerging
    1%

Geographically, about 82% is in North America, with most of that in the US, and the rest spread mainly across Europe and Japan. This tilt toward North America closely mirrors many global equity benchmarks, which have become US-heavy due to American market outperformance. That alignment is positive because it anchors the portfolio to what global investors actually own. The trade-off is that results are strongly tied to North American economic and policy conditions. Anyone who wants to reduce home-region risk might gradually nudge allocation toward other developed and select emerging markets, especially if planning for decades of investing.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    2%

By market capitalization, the portfolio is dominated by mega and big companies, together making up almost 80%, with very little exposure to small caps. Market cap just means the company’s total size in the stock market; big firms are often more stable and widely followed. This large-cap focus tends to lower company-specific risk and usually tracks major indexes closely, which is a strength. On the other hand, smaller companies sometimes offer higher long-term growth (with more volatility). Investors who want extra growth potential and diversification may consider slightly more exposure to mid and small caps over time.

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.

On a risk–return chart known as the Efficient Frontier, this portfolio likely sits on the higher-return, higher-volatility end among balanced profiles. The Efficient Frontier is just the set of mixes that give the best possible tradeoff between risk and reward using the current building blocks. Efficiency here means “best risk–return ratio,” not necessarily maximum diversification or lowest risk. With only three similar equity ETFs, there’s limited room to rearrange weights for huge improvements, but small tweaks—like modestly increasing the non-North American slice or adding a stabilizing asset type—could shift the mix closer to an efficiency sweet spot.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core MSCI EAFE IMI 0.90%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.63%

The total dividend yield of around 0.63% is modest, reflecting a bias toward growth-focused large cap stocks that reinvest profits rather than paying them out. Dividend yield is simply the annual cash payout as a percentage of the portfolio’s value. For long-term growth investors, a low yield is not a problem because returns mainly come from price appreciation. For someone who eventually wants income, this setup is an excellent base because it is low-cost and broadly diversified; over time, part of the plan can involve either shifting a slice into higher-yielding holdings or periodically selling small portions to generate cash flow.

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