Growth-focused portfolio with high exposure to US stocks and low diversification
Report created on Sep 10, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 75.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 25.00%
This portfolio is heavily invested in the US stock market, with a significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares (75%) and the Vanguard S&P 500 ETF (25%). This composition reflects a strong focus on growth, given the high allocation to equities, but it also indicates low diversification. Both funds are heavily correlated, as they cover a lot of the same ground in the US market, essentially doubling down on the same asset class and geography.
Growth
Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 15.10%, with a maximum drawdown of -34.75%. These figures suggest a robust performance with periods of significant volatility. The days contributing to 90% of the returns number just 34, indicating that the portfolio's gains are concentrated in short bursts, a characteristic of high-growth, volatile investments.
Projection
Using a Monte Carlo simulation, which projects future performance based on historical data, the portfolio's potential outcomes show a wide range. The median (50th percentile) projection suggests a 584.5% return, with a high degree of certainty for positive returns (998 out of 1,000 simulations). However, it's crucial to remember that such simulations rely on past performance, which is not a reliable indicator of future results.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely in stocks (100%), with no representation from other asset classes like bonds or real estate. This singular focus on equities enhances growth potential but also increases risk, particularly in market downturns. A more diversified asset class mix could provide a buffer during such times.
Sectors
- Technology 33%
- Financials 14%
- Consumer Discretionary 11%
- Health Care 10%
- Telecommunications 9%
- Industrials 9%
- Consumer Staples 5%
- Energy 3%
- Real Estate 2%
- Utilities 2%
- Basic Materials 2%
Sector-wise, the portfolio leans heavily towards technology (33%), financial services (14%), and consumer cyclicals (11%), with lower allocations across other sectors. This concentration in tech and cyclical sectors may drive higher returns but also exposes the portfolio to sector-specific risks, such as regulatory changes or economic cycles.
Regions
- North America 100%
Geographically, the portfolio is entirely allocated to North America (100%), missing out on potential growth and diversification benefits from developed markets in Europe and emerging markets in Asia and Latin America. This geographic concentration increases exposure to US market risks.
Market capitalization
- Mega-cap 42%
- Large-cap 32%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 2%
The market capitalization breakdown shows a preference for mega (42%) and big (32%) cap stocks, with less exposure to medium (19%), small (5%), and micro (2%) cap stocks. This skew towards larger companies is typical for growth-oriented portfolios but may limit exposure to the higher growth potential of smaller firms.
Redundant positions
-
High correlationVanguard S&P 500 ETFVanguard Total Stock Market Index Fund ETF Shares
The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates redundancy. This overlap does not contribute to diversification, as both ETFs track the US stock market closely, highlighting an area for potential optimization.
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 setup suggests room for optimization, particularly by reducing overlap between the two highly correlated ETFs. Adjusting the allocation could maintain the desired risk level while potentially increasing the expected return to 15.49%, an improvement over the current performance.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Weighted yield (per year) 1.20%
The portfolio's dividend yield stands at 1.20% for both ETFs, contributing to total returns. While not the focus for growth investors, dividends provide a steady income stream and can offer some cushion during market dips.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.03%
With total portfolio costs at a very low 0.03%, the portfolio benefits from efficient expense management. Low costs are crucial for long-term growth, as they directly enhance net returns by minimizing the drag on performance.
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