Concentrated low cost US stock portfolio with balanced risk and modest income tilt
Report created on May 16, 2024Risk profile
4/7
Diversification profile
2/5
Positions
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SP SPDR® Portfolio S&P 500 ETF
SPLG - US78464A8541 80.00% -
SP SPDR® Portfolio S&P 500 High Dividend ETF
SPYD - US78468R7888 20.00%
The structure here is extremely simple: two US stock ETFs, one broad-market and one high-dividend, with an 80/20 split. That means every dollar is fully in equities and almost entirely tied to the same large US companies, just viewed through two different lenses: total market and income tilt. Simplicity like this is powerful because it’s easy to understand, maintain, and monitor. The main tradeoff is lower diversification across regions and asset types. For someone wanting straightforward stock exposure with a small income boost, this layout is clean and intentional, but it does leave out other asset classes that can sometimes soften big market swings.
Growth
Historically, $1,000 grew to about $3,523, a compound annual growth rate (CAGR) of 14.07%. CAGR is the “average yearly speed” of growth over the full period. This lagged the US market by about 1.11% per year but beat the global market by 1.81% per year, showing that sticking close to US stocks has been beneficial. The max drawdown, or worst peak‑to‑trough drop, was about -35.8%, which is deep but typical for an all‑equity portfolio. Only 31 days drove 90% of total returns, highlighting how missing a few strong days can matter a lot. Past performance is not a promise, but it shows this setup has delivered solid long‑term growth with full stock‑market risk.
Asset classes
- Stocks 100%
Everything here is in stocks, with no bonds, cash, or alternative assets. Stocks historically offer higher long‑term growth but come with sharper ups and downs, especially during market crashes or recessions. A 100% equity allocation is more aggressive than what many “balanced” profiles use, where bonds or cash often act as shock absorbers. The benefit is maximizing growth potential; the tradeoff is accepting bigger temporary losses and longer recovery periods. For someone with a long horizon and strong stomach for volatility, this can be acceptable, but anyone needing stability or near‑term withdrawals might usually blend in other asset classes to smooth the ride.
Sectors
- Technology 29%
- Financials 13%
- Consumer Discretionary 10%
- Telecommunications 10%
- Health Care 9%
- Consumer Staples 7%
- Industrials 6%
- Real Estate 6%
- Energy 4%
- Utilities 4%
- Basic Materials 2%
Sector exposure is tilted toward technology at 29%, with financials, consumer discretionary, telecom, and health care making up much of the rest. This pattern is broadly in line with major US indexes, so it aligns well with market norms and supports diversification across economic areas. The technology weight does mean sensitivity to interest rates and innovation cycles: tech‑heavy portfolios often shine in growth-friendly environments but can feel more volatile during rate hikes or sentiment shifts. On the plus side, the sector mix is not extreme or wildly off benchmark; it’s a reasonable reflection of the modern US economy, which is a strong sign of structural balance.
Regions
- North America 99%
- Europe Developed 1%
Geographically, the exposure is almost entirely North America at 99%, with only a token amount in developed Europe. That means the portfolio is strongly tied to the US economic and policy environment—interest rates, inflation, regulation, and the health of US consumers and corporations drive outcomes. This home‑country focus has been beneficial over the last decade, as US stocks have outpaced many other regions. The flip side is limited diversification across different economies and currencies. When US markets struggle or the dollar weakens, there’s little offset from other parts of the world. Some investors are comfortable with that tradeoff; others prefer more global balance.
Market capitalization
- Mega-cap 37%
- Large-cap 32%
- Mid-cap 26%
- Small-cap 5%
Market cap exposure is dominated by mega‑ and large‑cap stocks, together about 69%, with mid‑caps meaningful and small‑caps a small slice. Larger companies generally bring more stability, established businesses, and better liquidity, which can reduce some of the wild swings seen in tiny names. This profile is very similar to broad US benchmarks and is a positive sign of mainstream diversification across company sizes. The modest small‑cap weight means less exposure to higher‑risk, higher‑potential smaller firms, but also fewer sharp drawdowns specific to that segment. Overall, the size mix is comfortably “market-like,” which supports predictable behavior relative to standard US indices.
True holdings
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NV NVIDIA Corporation 6.04%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
AA Apple Inc 5.66%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
MS Microsoft Corporation 4.96%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
AM Amazon.com Inc 3.06%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
AV Broadcom Inc 2.57%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
GO Alphabet Inc Class A 2.56%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
GO Alphabet Inc Class C 2.06%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
ME Meta Platforms Inc. 1.89%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
-
TS Tesla Inc 1.65%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- SPDR® Portfolio S&P 500 ETF
-
BR Berkshire Hathaway Inc 1.29%
Part of fund(s):- SPDR® Portfolio S&P 500 ETF
- Top 10 total 31.73%
Looking through the ETFs, the biggest underlying exposures are familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, and Alphabet. These companies show up via multiple funds, which creates “hidden” concentration in a small group of giants, even though only top‑10 holdings are counted. That overlapping exposure can boost returns when these leaders do well but ties the portfolio’s fortunes closely to a narrow group of big tech and growth names. This isn’t necessarily negative—these firms have driven much of the market’s gains—but it does mean that performance is heavily influenced by how this small leadership group behaves over time.
Factors
Factor exposure across value, size, momentum, quality, yield, and low volatility sits close to neutral in every category. Factor exposure describes how much the portfolio leans into traits like cheapness (value) or trend‑following (momentum) that research links to long‑term returns. Being broadly neutral means the portfolio behaves similarly to the overall market, without strong tilts that might supercharge returns in some environments and hurt in others. This is a strength for investors wanting straightforward market participation instead of trying to time specific styles. It suggests returns will mainly track broad US equity performance rather than being driven by niche factor bets.
Risk contribution
-
SPDR® Portfolio S&P 500 ETF
Weight: 80.00% 80.5% -
SPDR® Portfolio S&P 500 High Dividend ETF
Weight: 20.00% 19.5%
Risk contribution shows how much each holding adds to the portfolio’s overall ups and downs, which can differ from simple weights. Here, the broad S&P 500 ETF makes up 80% of the weight and contributes about 80.5% of the risk, while the high‑dividend ETF is 20% of the weight and about 19.5% of the risk. That near‑one‑to‑one relationship is clean and intuitive: no single position is secretly dominating risk beyond its size. This alignment is helpful because it means adjustments in weight will have fairly predictable impacts on overall volatility, making any future rebalancing decisions more straightforward.
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.
On the risk‑return chart, the current portfolio sits right on or very near the efficient frontier, with a Sharpe ratio of 0.71. The Sharpe ratio compares return to volatility, like grading how efficiently risk is being used. The optimal mix of the same holdings has a higher Sharpe (0.82) and slightly higher return, but also marginally more risk, while the minimum‑variance mix has slightly lower risk with similar Sharpe. Because the current setup is already essentially efficient, there’s limited benefit from reshuffling weights among these two ETFs alone. Any major change in the risk‑return profile would likely require adding different asset types, not just reweighting.
Dividends
- SPDR® Portfolio S&P 500 ETF 0.80%
- SPDR® Portfolio S&P 500 High Dividend ETF 4.40%
- Weighted yield (per year) 1.52%
The combined dividend yield is about 1.52%, with the core S&P 500 ETF yielding around 0.8% and the high‑dividend sleeve around 4.4%. Dividends are cash payments from companies and can be a meaningful part of long‑term returns, especially when reinvested. The 20% high‑dividend allocation gently boosts income without turning the portfolio into an income‑only strategy. That’s a reasonable middle ground for someone wanting a bit more yield than the broad market while still keeping growth as the main driver. Just remember that dividend levels can change over time, and higher yield doesn’t always mean lower risk.
Ongoing product costs
- SPDR® Portfolio S&P 500 ETF 0.02%
- SPDR® Portfolio S&P 500 High Dividend ETF 0.07%
- Weighted costs total (per year) 0.03%
Total ongoing costs are impressively low, with a blended total expense ratio (TER) of about 0.03%. TER is the annual percentage the fund charges to cover management and operations; lower fees leave more return in your pocket. This cost level is well below many active funds and even below many low‑cost index options, which is a real structural advantage. Over long periods, small fee differences compound significantly. Keeping expenses this lean supports better long‑term performance and aligns closely with best practices in low‑cost, index‑oriented investing. On the cost front, this setup is already in excellent shape and doesn’t need much tweaking.
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