Growth-oriented portfolio with a strong tilt towards small-cap stocks and low diversification
Report created on Aug 18, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VS VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES
VSMAX - US9229086866 80.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 20.00%
The portfolio is heavily weighted towards the Vanguard Small-Cap Index Fund Admiral Shares at 80%, with the remaining 20% allocated to the Vanguard S&P 500 ETF. This composition indicates a growth-focused strategy, given the higher risk and potential reward associated with small-cap investments. However, this concentration also suggests low diversification, as it heavily leans on the performance of U.S. stocks, particularly within the small-cap space.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.39%, with a maximum drawdown of -39.99%. These figures highlight the portfolio's volatility and the significant risks taken to achieve its returns. The days contributing to 90% of returns being so few emphasizes the portfolio's reliance on short-term gains, which can be risky for investors not prepared for potential sharp downturns.
Projection
Monte Carlo simulations, using historical data to project future outcomes, suggest a wide range of potential returns, with a median projected increase of 420%. While 986 out of 1,000 simulations resulted in positive returns, this optimistic outlook must be balanced with the understanding that past performance is not indicative of future results, particularly given the portfolio's high risk score.
Asset classes
- Stocks 99%
- Cash 1%
With 99% of the portfolio in stocks and only 1% in cash, the asset class allocation underscores a high-risk, high-reward strategy. This stock-heavy approach is typical for growth-oriented portfolios but comes with increased volatility and risk, especially in market downturns. Diversifying across more asset classes could mitigate some of this risk.
Sectors
- Technology 20%
- Industrials 17%
- Financials 14%
- Health Care 11%
- Consumer Discretionary 10%
- Real Estate 6%
- Consumer Staples 5%
- Telecommunications 4%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Consumer Discretionary 2%
The sector allocation shows a significant emphasis on technology, industrials, and financial services, which are sectors often associated with higher volatility but also higher growth potential. However, this concentration increases the portfolio's sensitivity to sector-specific downturns. Broadening the sector exposure could enhance stability.
Regions
- North America 99%
- Europe Developed 1%
The geographic allocation is almost entirely focused on North America (99%), with minimal exposure to developed Europe and no presence in emerging markets or developed Asia. This geographic concentration limits global diversification, potentially missing out on growth opportunities in other regions.
Market capitalization
- Small-cap 47%
- Mid-cap 26%
- Mega-cap 9%
- Micro-cap 9%
- Large-cap 7%
The market capitalization breakdown reveals a strong focus on small and micro-cap stocks, which can offer substantial growth opportunities but also carry higher risk. The portfolio's limited exposure to mega and big-cap stocks reduces its buffer against market volatility.
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 optimal portfolio, with an expected return of 15.34% at a risk level of 18.34%, suggests that there is room for improvement in terms of risk-return optimization. Adjusting the asset allocation could potentially enhance returns without proportionately increasing risk, aligning more closely with the Efficient Frontier.
Dividends
- Vanguard S&P 500 ETF 1.20%
- VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES 1.00%
- Weighted yield (per year) 1.04%
The dividend yield of the portfolio stands at 1.04%, which is relatively modest. This yield reflects the growth orientation of the portfolio, as growth stocks typically reinvest earnings rather than pay out dividends. For investors seeking income, diversifying into higher-yielding assets could be beneficial.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES 0.05%
- Weighted costs total (per year) 0.05%
The portfolio's total expense ratio (TER) of 0.05% is impressively low, which is advantageous for long-term growth. Keeping costs low is crucial in maximizing returns, especially in growth-oriented strategies where the compounding effect plays a significant role.
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