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

Report created on Jul 8, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio primarily consists of three ETFs focusing on the S&P 500 momentum, U.S. dividend equity, and U.S. large-cap growth, with a significant 72.28% allocation to the Invesco S&P 500® Momentum ETF. This concentration suggests a strong tilt towards growth and momentum strategies within the U.S. equity market. The heavy weighting towards a single ETF raises concerns about diversification, as the portfolio's risk is closely tied to the performance of the U.S. large-cap segment.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 20.67% and a maximum drawdown of -31.37%, the portfolio has demonstrated robust growth albeit with significant volatility. The days contributing 90% of returns being limited to 37 indicates that the portfolio's performance is highly concentrated in short bursts, which is characteristic of momentum strategies. This performance pattern underscores the importance of timing in contributions and withdrawals to maximize returns.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a 1,029.5% return. This optimistic projection is based on historical data, which, while informative, does not guarantee future performance. The high percentile outcomes indicate potential for substantial growth, aligning with the portfolio's growth profile but also highlight the inherent uncertainty and risk.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, lacking exposure to other asset classes like bonds or real estate. This singular focus enhances growth potential but also increases volatility and risk. Diversifying across different asset classes can provide a buffer against stock market downturns and reduce overall portfolio risk.

Sectors Info

  • Technology
    23%
  • Financials
    16%
  • Consumer Discretionary
    14%
  • Telecommunications
    13%
  • Consumer Staples
    11%
  • Industrials
    9%
  • Energy
    5%
  • Health Care
    5%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation is concentrated in technology, financial services, and consumer cyclicals, which are sectors typically associated with higher growth but also higher volatility. This sectoral focus complements the portfolio's growth objective but may benefit from a broader sectoral spread to mitigate sector-specific risks.

Regions Info

  • North America
    100%

Geographic allocation is exclusively North American, omitting exposure to international markets. This concentration in a single region can amplify risks related to local economic and political events. Introducing global diversification could enhance returns and reduce risk by tapping into growth opportunities in other regions.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    38%
  • Mid-cap
    16%
  • Small-cap
    1%

The focus on mega and big-cap stocks (83% combined) aligns with the portfolio's growth strategy, as these companies often have more stable earnings and growth prospects. However, the minimal exposure to medium, small, and micro-cap stocks limits potential high-growth opportunities in these segments.

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 current portfolio, while demonstrating strong past performance, appears to be positioned on the higher end of the risk spectrum with limited diversification. Using the Efficient Frontier concept, it's possible to explore whether a different allocation could achieve a better risk-return trade-off. This might involve diversifying across more asset classes or sectors to reduce volatility without significantly sacrificing expected returns.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 1.18%

The overall dividend yield of 1.18% indicates a moderate contribution of dividends to total returns. While the portfolio's focus is on growth, dividends offer a source of passive income and can provide a cushion during market downturns. Rebalancing to include assets with higher dividend yields could improve income generation without significantly compromising growth potential.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.11%

The total expense ratio (TER) of 0.11% is relatively low, which is beneficial for long-term growth as lower costs mean more of the investment return is retained by the investor. Maintaining low costs is crucial for enhancing net returns, especially in growth-oriented portfolios where compounding plays a significant role.

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