A growth-oriented portfolio with a strategic blend of US and international equities
Report created on Jul 22, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
VB Vanguard Small-Cap Value Index Fund ETF Shares
VBR - US9229086114 30.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00%
This portfolio is strategically composed of 50% Vanguard S&P 500 ETF, 30% Vanguard Small-Cap Value Index Fund ETF Shares, and 20% Vanguard Total International Stock Index Fund ETF Shares. This mix shows a strong tilt towards US equities, particularly large-cap stocks, but with a significant allocation towards small-cap and international stocks for diversification. The heavy weighting in the S&P 500 ETF ensures exposure to the largest and most stable companies, while the small-cap and international components introduce growth potential and global exposure, respectively.
Growth
Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.17%, with a maximum drawdown of -36.85%. This indicates a robust growth trajectory over time, albeit with significant volatility. The days contributing to 90% of returns being limited to 26 suggests that the portfolio's performance is highly concentrated in short, strong market rallies. This performance, compared to benchmarks, shows resilience and the potential for substantial growth, but it also highlights the importance of timing and market conditions in achieving these returns.
Projection
Using a Monte Carlo simulation, which projects future outcomes based on historical data, this portfolio's potential future performance varies widely. With 960 out of 1,000 simulations showing positive returns, there's a high likelihood of growth. Percentiles indicate possible outcomes ranging from moderate to highly optimistic, with a median projected increase of 290.9%. However, it's crucial to remember that these simulations are speculative and depend on past market behaviors, which may not predict future movements accurately.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's assets are almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation is typical for growth-oriented investors seeking higher returns, albeit with increased risk. Stocks, especially from diverse sectors and geographies, can offer significant growth opportunities but also come with higher volatility compared to bonds or other fixed-income assets. The minimal cash position may limit flexibility in taking advantage of market dips or rebalancing.
Sectors
- Technology 22%
- Financials 18%
- Industrials 13%
- Consumer Discretionary 12%
- Health Care 9%
- Telecommunications 7%
- Consumer Staples 6%
- Real Estate 5%
- Basic Materials 4%
- Utilities 4%
- Energy 3%
The sectoral allocation is well-diversified across technology, financial services, industrials, consumer cyclicals, and healthcare, making up the bulk. This diversification spreads risk and potential for growth across different economic sectors, which can respond differently to market changes. Technology and financial services, being the largest sectors, suggest a focus on areas with high growth potential but also increased sensitivity to economic cycles and interest rate changes.
Regions
- North America 81%
- Europe Developed 8%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio is heavily weighted towards North America (81%), with smaller allocations to developed Europe (8%) and emerging markets in Asia (3%), among others. This reflects a strong home bias, common among US investors, which can both minimize currency risk and capitalize on familiarity with the US market. However, this concentration may also limit exposure to growth opportunities in emerging markets and diversification benefits from global equities.
Market capitalization
- Mega-cap 32%
- Large-cap 24%
- Small-cap 20%
- Mid-cap 19%
- Micro-cap 4%
The market capitalization breakdown shows a balanced exposure across mega (32%), big (24%), small (20%), and medium (19%) cap stocks, with a small portion in micro-caps (4%). This diversified cap-size allocation enhances the portfolio's growth potential while mitigating risk. Small and micro-cap stocks offer high growth potential but with more volatility, whereas mega and big caps provide stability and resilience during market downturns.
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 Efficient Frontier, this portfolio appears well-positioned for growth-oriented investors, offering a favorable risk-return profile based on its current allocation. However, optimizing for the Efficient Frontier involves regularly reviewing and potentially adjusting allocations to maintain the best possible risk-return ratio. It's important to note that while this approach aims for efficiency in theory, actual market conditions and individual investor needs may warrant deviations from the model.
Dividends
- Vanguard Small-Cap Value Index Fund ETF Shares 2.10%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.79%
The dividend yields from the Vanguard Small-Cap Value Index Fund ETF Shares (2.10%), Vanguard S&P 500 ETF (1.20%), and Vanguard Total International Stock Index Fund ETF Shares (2.80%) contribute to a total portfolio yield of 1.79%. This indicates a moderate income stream from dividends, complementing the portfolio's growth focus. Dividends can provide a steady income and potential reinvestment opportunities, enhancing long-term growth.
Ongoing product costs
- Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.05%
With total portfolio costs averaging 0.05%, the investor benefits from low expense ratios typical of Vanguard's index funds and ETFs. Keeping costs low is crucial for maximizing long-term returns, as even small differences in fees can compound significantly over time. This portfolio's cost efficiency is a notable strength, supporting better performance relative to more expensive alternatives.
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