Optimizing a growth-focused portfolio with a strong tilt towards US large-cap stocks

Report created on Jul 5, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio predominantly invests in U.S. large-cap stocks, with a significant 50% allocation to the Schwab U.S. Large-Cap Growth ETF and 20% in the FIDELITY ZERO LARGE CAP INDEX FUND. The inclusion of the Invesco NASDAQ 100 ETF and Invesco S&P 500® Momentum ETF further emphasizes the growth orientation, while the FIDELITY ZERO INTERNATIONAL INDEX FUND and FIDELITY ZERO TOTAL MARKET INDEX FUND offer a nod to international exposure and broader market inclusion, albeit minimally. This composition underscores a clear preference for growth over value, with a moderate diversification across sectors but a heavy concentration in technology.

Growth Info

Historically, the portfolio has demonstrated a strong performance with a Compound Annual Growth Rate (CAGR) of 16.45%, albeit with a significant maximum drawdown of -30.28%. This indicates a high growth potential at the expense of considerable volatility. The days contributing most to returns are notably few, suggesting that the portfolio's gains are concentrated in short, robust market rallies. This pattern is typical for growth-focused strategies, especially those heavily weighted towards tech and large-cap stocks.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a substantial increase in value. However, the reliance on historical data to forecast future performance is inherently limited by unforeseen market shifts and economic changes. While the simulations show a high probability of positive returns, investors should remain cautious of the potential for volatility and the impact of market conditions diverging from historical patterns.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, reflecting a high-growth, high-risk strategy. This singular focus on equities exposes the portfolio to market volatility, lacking the cushioning effect that bonds or alternative investments might provide during downturns. While this allocation aligns with a growth-oriented investment strategy, a more diversified approach across asset classes could offer better risk-adjusted returns, especially for investors with a lower risk tolerance.

Sectors Info

  • Technology
    40%
  • Telecommunications
    13%
  • Financials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Industrials
    6%
  • Consumer Staples
    4%
  • Consumer Discretionary
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

With 40% of the portfolio in technology and significant allocations to communication services and financial services, the sectoral distribution underscores a bet on sectors that typically exhibit high growth. However, this concentration also exposes the portfolio to sector-specific risks, such as regulatory changes or shifts in consumer behavior. Diversifying into underrepresented sectors could mitigate these risks and stabilize returns over time.

Regions Info

  • North America
    95%
  • Europe Developed
    2%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    1%

The geographic allocation heavily favors North America, particularly the U.S., with minimal exposure to international markets. This concentration enhances the portfolio's vulnerability to U.S.-specific economic downturns. Expanding the international exposure could provide a hedge against this risk and tap into growth opportunities in emerging and developed markets outside the U.S.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    28%
  • Mid-cap
    14%
  • Small-cap
    1%

The focus on mega and large-cap stocks is consistent with the portfolio's growth orientation, as these companies often offer more stability and less volatility than their smaller counterparts. However, this emphasis might limit exposure to high-growth potential found in mid and small-cap stocks. Including a broader range of market capitalizations could introduce more diversification and potential for higher returns.

Redundant positions Info

  • FIDELITY ZERO TOTAL MARKET INDEX FUND
    Schwab U.S. Large-Cap Growth ETF
    Invesco NASDAQ 100 ETF
    FIDELITY ZERO LARGE CAP INDEX FUND
    High correlation

The high correlation among the FIDELITY ZERO TOTAL MARKET INDEX FUND, Schwab U.S. Large-Cap Growth ETF, and Invesco NASDAQ 100 ETF indicates significant overlap in holdings, reducing the portfolio's diversification benefits. Reducing exposure to overlapping assets could enhance the portfolio's efficiency by avoiding redundant investments and better spreading risk.

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.

Optimizing the portfolio involves addressing the high correlation between certain assets to enhance diversification benefits. By reallocating funds from overlapping investments to underrepresented sectors, geographic regions, or asset classes, the portfolio can achieve a more balanced risk-return profile. This strategy aligns with the Efficient Frontier principle, aiming to maximize returns for any given level of risk.

Dividends Info

  • FIDELITY ZERO LARGE CAP INDEX FUND 1.00%
  • FIDELITY ZERO INTERNATIONAL INDEX FUND 2.50%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND 1.10%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 0.69%

The portfolio's overall dividend yield is relatively low, in line with its growth-focused strategy, which typically prioritizes reinvestment of profits over dividend payouts. For investors seeking income, increasing exposure to assets with higher dividend yields might be beneficial. However, for those prioritizing growth, the current allocation supports reinvestment and capital appreciation.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low overall costs, with the Total Expense Ratio (TER) averaging 0.05%. This efficiency is crucial for long-term growth, as lower costs translate directly to higher net returns. Investors should maintain vigilance on cost control as a fundamental aspect of portfolio management, ensuring that any additions or adjustments keep the TER competitively low.

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