A growth focused stock heavy portfolio with strong diversification and very low ongoing costs

Report created on Nov 14, 2024

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 built almost entirely from broad stock ETFs, with 40% in a large US core fund, 20% in US small-cap value, 20% in US growth, and 20% in international stocks. That structure tilts strongly toward equities, which explains the “growth” risk profile and the higher risk score. Compared with many balanced benchmarks that hold substantial bonds or cash, this setup is more aggressive and more sensitive to market swings. For someone comfortable with volatility, keeping this all‑equity mix can be sensible, but anyone wanting smoother returns could consider gradually adding a modest allocation to lower‑risk assets rather than relying almost fully on stocks.

Growth Info

Historically, this mix produced a compound annual growth rate (CAGR) of 14.32%. CAGR is like your average speed on a road trip: it smooths the ups and downs into one yearly number. A -35.24% max drawdown shows that in a bad period, values dropped roughly a third, which is big but typical for growth‑oriented stock portfolios and roughly in line with equity benchmarks during major downturns. That strong long‑term growth with sizable drawdowns fits a high‑equity strategy. While the past results are impressive, it’s important to remember that past performance doesn’t guarantee future outcomes, especially if market conditions or interest rates change significantly.

Projection Info

The Monte Carlo analysis ran 1,000 simulations and found a median outcome of about 444.6% growth, with a pessimistic 5th percentile around 69.9% and a more optimistic 67th percentile near 693.9%. Monte Carlo simulations take historical patterns—returns and volatility—and shuffle them thousands of times to show a range of possible futures, not a single prediction. The 988 out of 1,000 positive outcomes and a simulated annualized return near 15% highlight a favorable historical pattern for this style of portfolio. Still, these simulations are only as good as the assumptions; structural shifts, new regulations, or unusual crises could make future markets behave differently than the past.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The asset allocation is roughly 99% stocks and 1% cash, with no meaningful exposure to bonds or alternative assets. This is very much a pure equity portfolio, which increases both growth potential and vulnerability to market drops. Compared with more “balanced” benchmarks that might hold 30–60% in bonds, this mix is clearly tilted toward higher risk and higher return. For someone seeking long‑term wealth building and comfortable with volatility, this concentration in stocks can be aligned with their goals. For anyone needing income stability or short‑term spending, introducing some fixed‑income or defensive assets could help smooth the ride without completely changing the growth profile.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Industrials
    11%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Staples
    4%
  • Real Estate
    3%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    3%

Sector exposure is broad and well spread: around 30% technology, followed by meaningful slices in financials, consumer cyclicals, industrials, communication services, and healthcare, with modest allocations to more defensive and cyclical sectors like consumer defensive, utilities, energy, and real estate. This composition looks very similar to major global and US equity benchmarks, which is a strong indicator of diversification and modern economic representation. A tech tilt can boost growth but often makes portfolios more sensitive to interest rates and investor sentiment. Keeping this diversified structure is helpful; the key is being aware that sharp tech downturns could temporarily drag performance more than in a more defensive‑heavy mix.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, about 81% is in North America, with the rest spread across developed Europe, Japan, other developed Asia, and small allocations to emerging regions. That tilt toward the US is common and has been rewarded over the past decade, as US markets outperformed many peers. The 20% international allocation adds useful diversification, reducing reliance on a single economy and currency, which is healthy and aligns with many global benchmarks. Still, non‑US exposure remains moderate rather than high. Anyone wanting more explicit global balance could slowly nudge the international slice upward over time, while those who prefer a US‑centric stance may be comfortable keeping this current geographic mix.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    24%
  • Mid-cap
    17%
  • Small-cap
    13%
  • Micro-cap
    3%

Market capitalization exposure is well layered: about 41% mega‑cap, 24% big, 17% medium, 13% small, and 3% micro. This is a nice spread that reaches across the size spectrum, not just the largest companies. Mega and big caps usually offer more stability and liquidity, while mid and small companies can add growth potential and sometimes higher volatility. Compared to many cap‑weighted benchmarks, there is a clear boost to smaller stocks through the small‑cap value fund, which can enhance diversification and long‑term return potential. Maintaining this multi‑cap structure supports a resilient equity mix, while any future adjustments could fine‑tune how much risk comes from smaller, more volatile companies.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Growth Index Fund ETF Shares
    High correlation

The holdings show high correlation between the S&P 500 ETF and the dedicated growth ETF, meaning they often move together. Correlation measures how similarly assets behave; when two funds are highly correlated, holding both may not add much diversification. This overlap is very common in US equity portfolios, especially when both funds lean toward large growth stocks. While it does not necessarily hurt returns, it can make risk reduction less effective because those parts of the portfolio may fall at the same time in downturns. Trimming or consolidating overlapping positions could simplify the structure and slightly improve diversification without changing the overall growth orientation.

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.

From a risk‑return angle, this portfolio likely sits near the upper part of the Efficient Frontier for stock‑heavy mixes. The Efficient Frontier is the set of portfolios that give the best possible return for each risk level using the same building blocks. Efficiency here is purely about risk versus return, not tax, values, or personal preferences. Because two large US funds are highly correlated, some of that exposure may be redundant, meaning similar returns could be achieved with slightly less concentration risk by reallocating within the existing ETFs. Any optimization would focus on adjusting percentages among these funds rather than adding new products or changing the overall growth profile.

Dividends Info

  • Vanguard Small-Cap Value Index Fund ETF Shares 1.90%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.44%

The total dividend yield is about 1.44%, with the international and small‑cap value funds paying more and the growth fund paying less. Dividend yield is the income you get as cash payments, expressed as a percentage of your investment, and it can be a useful supplement to price gains. For a growth‑focused equity portfolio, a modest yield like this is normal and shows that the strategy prioritizes companies that reinvest profits rather than paying them out. For long‑term compounding, that approach can be attractive. Anyone seeking higher regular income, though, might eventually add some more income‑oriented holdings rather than relying mainly on price appreciation and small dividend streams.

Ongoing product costs Info

  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The ongoing costs are impressively low, with fund expense ratios in the 0.03–0.07% range and a total TER of about 0.04%. TER, or total expense ratio, is like a yearly membership fee expressed as a small percentage of your investment. Over decades, low fees can significantly boost net returns compared to higher‑cost strategies because less money is being siphoned off each year. This cost structure is a major strength and strongly aligned with best practices and many research findings that favor low‑cost indexing. Keeping expenses at this level supports better long‑term outcomes and leaves more of the portfolio’s growth in your own pocket instead of going to fund managers.

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