A high concentration in US equities with a focus on large-cap and dividend-paying stocks

Report created on Jul 22, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily concentrated, with 83% allocated to the Vanguard S&P 500 ETF and 17% to the Schwab U.S. Dividend Equity ETF. This structure indicates a strong focus on large-cap U.S. equities, given the S&P 500's composition. The allocation towards dividend-paying stocks, represented by the Schwab ETF, suggests an attempt to blend growth with income generation. However, the portfolio's diversification is low, with all investments in the stock asset class and a significant geographic concentration in North America.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.26%, with a maximum drawdown of -33.76%. The days contributing to 90% of returns are notably few, indicating that a small number of high-performing days have significantly impacted overall returns. While past performance is strong, this concentration also implies potential vulnerability to market volatility, especially in sectors that the portfolio is heavily invested in.

Projection Info

Monte Carlo simulations, using historical data to project potential future outcomes, suggest a wide range of possibilities for this portfolio. With 995 out of 1,000 simulations showing positive returns and a median 50th percentile outcome of 464.5% growth, the forward-looking projection is optimistic. However, the reliance on historical data means these projections cannot guarantee future performance, especially in an evolving economic landscape.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, with no allocation to other asset classes like bonds or commodities. This singular focus enhances exposure to equity market growth but also increases susceptibility to market downturns. Diversifying across different asset classes can mitigate risk and reduce volatility without necessarily compromising long-term return potential.

Sectors Info

  • Technology
    29%
  • Financials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    11%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    8%
  • Energy
    6%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Sector allocation highlights a significant tilt towards technology, financial services, and consumer cyclicals, which are sectors that can offer growth but also come with higher volatility. The underrepresentation of traditionally defensive sectors like utilities and consumer defensive could make the portfolio more sensitive to market swings. Balancing sector exposure may help in smoothing out returns over time.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographic exposure is overwhelmingly concentrated in North America, with a minimal presence in developed Europe and no exposure to emerging markets or other developed regions. This concentration risks magnifying the impact of region-specific economic downturns on portfolio performance. Introducing a more global allocation could provide growth opportunities and risk diversification.

Market capitalization Info

  • Large-cap
    39%
  • Mega-cap
    39%
  • Mid-cap
    20%
  • Small-cap
    2%

The portfolio's market capitalization breakdown shows a balanced exposure to big and mega-cap stocks, with a smaller allocation towards medium and negligible exposure to small and micro-caps. This composition leans towards stability and lower volatility associated with larger companies but may limit potential high-growth opportunities found in smaller cap stocks.

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 portfolio's current composition and the Efficient Frontier analysis, there's room for optimization towards a better risk-return ratio. This could involve diversifying across more asset classes and regions, and rebalancing sector exposure. Such adjustments aim to enhance returns for the given level of risk or reduce risk for the current level of expected returns, without necessarily increasing diversification.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.80%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.64%

The portfolio's dividend yield strategy, with a total yield of 1.64%, suggests a focus on income generation alongside capital appreciation. This approach can provide a steady income stream, which is beneficial during market volatility. However, it's essential to balance yield-seeking with growth opportunities to ensure long-term capital appreciation.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, which is beneficial for long-term growth as lower costs mean more of the investment's return is retained. This cost efficiency is a strong aspect of the portfolio, supporting better net performance over time.

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