A growth-focused portfolio with strong tech exposure and broad international diversification

Report created on Apr 10, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists of 55% Vanguard S&P 500 ETF, 40% Vanguard Total International Stock Index Fund ETF Shares, and 5% NVIDIA Corporation. This composition leans heavily on U.S. equities while maintaining substantial international exposure, aligning with a growth-oriented strategy. Such a structure typically aims for capital appreciation over time, benefiting from the stability of established markets and the potential of international diversification. To further enhance diversification, consider adding more asset classes or reducing single-stock exposure to mitigate concentration risk.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.82%, indicating strong past performance. However, the maximum drawdown of -49.32% highlights significant volatility, typical for a growth-focused strategy. Comparing this to a broader market benchmark, the portfolio's performance is robust, yet volatile periods should be expected. While past performance is not indicative of future results, understanding this volatility can help set realistic expectations and prepare for market fluctuations.

Projection Info

Forward projections using Monte Carlo simulations, which utilize historical data to model potential future outcomes, indicate promising results. The median projection suggests a potential growth of 2,573.7%, with a high likelihood of positive returns. However, these simulations are based on historical data and assumptions, which may not fully capture future market conditions. While the projections are optimistic, it's important to remain cautious and regularly review the portfolio to adapt to changing market dynamics.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is predominantly invested in stocks (99%), with a minimal cash allocation (1%). This heavy stock allocation aligns with a growth strategy, but it also increases exposure to market volatility. Compared to typical benchmarks, this allocation may lack the diversification benefits provided by bonds or other asset classes. To reduce risk, consider incorporating a small percentage of fixed-income securities or alternative investments to balance growth potential with stability.

Sectors Info

  • Technology
    28%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio is heavily weighted towards technology (28%), followed by financial services (16%) and consumer cyclicals (11%). This sectoral allocation is common for growth-focused portfolios, as these sectors often drive innovation and economic expansion. However, a tech-heavy portfolio may experience higher volatility, especially during periods of interest rate hikes or regulatory changes. To mitigate sector-specific risks, ensure regular reviews of sector allocations and consider diversifying into less represented sectors.

Regions Info

  • North America
    63%
  • Europe Developed
    16%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

With 63% of assets in North America, the portfolio has a significant home bias, complemented by 16% in Europe Developed and smaller allocations in other regions. This geographic diversification offers exposure to global economic growth while managing regional risks. However, the limited exposure to emerging markets may miss out on higher growth potential. To enhance diversification, consider increasing allocations to emerging markets, which can provide additional growth opportunities and reduce reliance on U.S. markets.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    31%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's market capitalization is dominated by mega-cap stocks (49%), followed by big-cap (31%) and medium-cap (17%) stocks. This distribution suggests a focus on large, established companies, which typically offer stability and liquidity. However, the limited allocation to small-cap stocks (2%) may restrict potential high-growth opportunities. To capture more diverse growth, consider gradually increasing exposure to small- and mid-cap stocks, which can complement the stability of larger companies.

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 risk-return profile can be optimized using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio for a given set of assets. By adjusting the allocation between existing assets, the portfolio can potentially achieve a more favorable balance between risk and return. However, this optimization is limited to the current assets and does not account for broader diversification. Regularly reassessing the portfolio's asset allocation can help maintain efficiency and align with changing market conditions.

Dividends Info

  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 2.09%

The portfolio's dividend yield stands at 2.09%, with the Vanguard Total International Stock Index Fund ETF Shares contributing a higher yield of 3.30%. Dividends can provide a steady income stream, which is particularly valuable during periods of market volatility. While growth is the primary focus, maintaining a balance between growth and income can enhance total returns and provide some downside protection. Consider monitoring dividend yields and reinvesting dividends to compound growth over time.

Ongoing product costs Info

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

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.04%. Low costs are beneficial for long-term performance, as they minimize the drag on returns. Compared to industry averages, these costs are highly competitive, ensuring that more of the portfolio's returns are retained. To maintain cost efficiency, continue to prioritize low-cost investment options and regularly review expense ratios to ensure alignment with financial goals.

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