A growth-oriented portfolio with strong tech exposure and global diversification

Report created on Apr 9, 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 Total Stock Market Index Fund ETF, 40% Vanguard Total International Stock Index Fund ETF, and 5% NVIDIA stock. This structure leans heavily on equities, which aligns with a growth-focused strategy. Compared to a typical balanced portfolio, this allocation is more aggressive, aiming for higher returns. While the U.S. market dominates, the international exposure offers some diversification. To further enhance diversification, consider incorporating other asset classes such as bonds or real estate, which can provide stability during market downturns.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 11.59%, indicating strong performance. This growth rate is impressive, especially when compared to common benchmarks like the S&P 500. However, the maximum drawdown of nearly 50% highlights the potential for significant losses during market downturns. It's crucial to understand that past performance doesn't guarantee future results, but this historical data suggests the portfolio has been resilient. To manage risk, consider strategies like rebalancing or adding defensive assets, which can help mitigate losses during volatile periods.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a broad range of potential returns. The 50th percentile indicates a potential 2,236.7% return, suggesting strong growth prospects. However, the 5th percentile shows a much lower return, underscoring the inherent uncertainty in projections. While these simulations provide insight, they rely on historical trends that may not continue. It's wise to prepare for various scenarios, including less favorable outcomes. Regularly reviewing and adjusting the portfolio based on changing market conditions can help optimize performance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% in equities and a negligible 1% in cash. This concentration in a single asset class can lead to higher volatility, especially during market downturns. Compared to a diversified portfolio with bonds or other asset classes, this allocation is more aggressive. While it aligns with a growth strategy, adding bonds or alternative investments could reduce risk and provide more stable returns. Consider gradually increasing exposure to different asset classes to enhance diversification and potentially smooth out returns over time.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Technology dominates the portfolio with a 27% allocation, reflecting a significant concentration in this sector. While tech has driven substantial growth, it can also be volatile, particularly during interest rate hikes. Other sectors like financial services and industrials provide some balance, but the tech-heavy focus may lead to increased risk. Diversifying across more sectors can help mitigate this risk and provide stability. Consider adjusting sector weights to align with broader market trends, potentially reducing exposure to tech while increasing allocations to sectors with strong growth prospects.

Regions Info

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

The portfolio's geographic exposure is primarily in North America at 63%, with additional allocations in Europe and Asia. This distribution offers a level of global diversification, though it remains U.S.-centric. Compared to global benchmarks, the portfolio could benefit from increased exposure to emerging markets, which may offer higher growth potential. Expanding geographic diversification can help reduce regional risks and capture opportunities in developing economies. Consider gradually increasing allocations to regions like Latin America or Africa to enhance diversification and potentially boost returns.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio is mainly composed of mega-cap stocks at 45%, followed by large-cap at 29% and mid-cap at 18%. This focus on larger companies provides stability and lower volatility compared to small-cap stocks. However, smaller companies can offer higher growth potential, albeit with increased risk. Compared to a more balanced market cap allocation, this portfolio leans towards stability. To capture growth opportunities, consider increasing exposure to small and micro-cap stocks, which can complement the existing large-cap focus and potentially enhance returns.

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 could potentially be optimized using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio based on current assets. By adjusting allocations, investors can aim for a more efficient portfolio that maximizes returns for a given level of risk. However, this optimization focuses solely on existing assets and their allocations, not diversification or other goals. Regularly reviewing the portfolio's efficiency and making necessary adjustments can enhance performance. Consider consulting with a financial advisor to explore optimization opportunities and align the portfolio with long-term objectives.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Vanguard Total International Stock Index Fund ETF Shares 3.50%
  • Weighted yield (per year) 2.22%

The portfolio's overall dividend yield is 2.22%, with the international ETF contributing a higher yield compared to the U.S. counterpart. Dividends provide a steady income stream, which can be reinvested to compound growth over time. For growth-focused investors, dividends may not be the primary concern, but they do offer a cushion during market downturns. While the current yield is moderate, exploring higher-yielding assets could enhance income potential. Consider balancing growth and income by incorporating dividend-focused investments, which can provide stability and support long-term wealth accumulation.

Ongoing product costs Info

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

The portfolio's total expense ratio (TER) is impressively low at 0.04%, thanks to the cost-effective Vanguard ETFs. Low costs are crucial for maximizing long-term returns, as they reduce the drag on performance. Compared to actively managed funds with higher fees, this portfolio is well-positioned to benefit from cost efficiency. Maintaining low costs should remain a priority, as even small increases can significantly impact returns over time. Regularly review the expense ratios and consider cost-effective alternatives if necessary to ensure the portfolio remains competitive and aligned with financial goals.

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