A growth orientated US equity heavy portfolio with low diversification and low overall costs

Report created on Aug 11, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is almost entirely equity driven with four ETFs weighted 40/25/25/10 percent. This structure concentrates on broad US market exposure plus a dividend and a growth sleeve. Compared with a typical balanced benchmark that mixes bonds and equities this is 100 percent stocks, so it’s much riskier than a balanced 60/40 blend. The skew to domestic large caps and a single international-aware ETF limits diversification benefits. Recommendation: consider adding noncorrelated asset types or shifting equity weights to better match target risk rather than relying solely on more of the same equity exposure.

Growth Info

Using a hypothetical $10,000 initial investment and the reported CAGR of 21.11 percent the balance would grow quickly over time — CAGR, or Compound Annual Growth Rate, is like the average speed of growth per year over a period. The max drawdown of -18.9 percent shows material short-term declines can occur even with strong average returns. Compared to a broad US equity benchmark the reported CAGR looks strong which reflects recent market performance and concentration in high-growth areas. Recommendation: temper expectations by remembering past high returns may not repeat and maintain an allocation consistent with risk tolerance.

Projection Info

A Monte Carlo simulation was run with 1,000 trials to estimate a range of possible future outcomes by randomly combining past return patterns — Monte Carlo uses historical return behavior to create many hypothetical paths to show variability. Results show wide dispersion with a 5th percentile ending value around 453 percent and median near 1,575 percent under the model assumptions. Simulations assume the future resembles the past which is a key limitation; they illustrate range and probability rather than predictions. Recommendation: use these projections as a risk planning tool not a guarantee and stress test plans for low percentile outcomes.

Asset classes Info

  • Stocks
    100%

With 100 percent allocated to stocks there is no exposure to bonds cash or alternative asset classes that typically reduce volatility and provide income. In practice asset class diversification smooths returns because bonds and alternatives often move differently than equities in stress periods. The current all-equity posture boosts expected long-term return but increases sequence of returns risk for near-term needs. Recommendation: match asset class mix to the investment horizon and liquidity needs — adding a modest fixed income sleeve can meaningfully lower short-term volatility without large sacrifice to long-term growth.

Sectors Info

  • Technology
    29%
  • Financials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    11%
  • Telecommunications
    10%
  • Industrials
    8%
  • Consumer Staples
    7%
  • Energy
    7%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector exposure is noticeably tilted with Technology at 29 percent and Communication Services 10 percent together creating a sizable concentration in growth-oriented sectors. Financials consumer cyclicals and healthcare each contribute around 11 percent while defensive sectors like utilities and real estate are minimal. Sector concentration matters because macro or interest rate shifts can disproportionately affect the portfolio. Recommendation: evaluate whether the tech tilt is intentional and consider modest shifts or use of sector neutral funds to reduce single-sector shocks while preserving overall equity exposure.

Regions Info

  • North America
    97%
  • Europe Developed
    1%
  • Asia Emerging
    1%

Geographic exposure is heavily home biased with 97 percent in North America and only negligible allocations to developed or emerging markets elsewhere. Home bias can simplify tax and currency issues but increases vulnerability to country specific economic or regulatory shocks. A global benchmark typically has a larger slice outside the U.S., which helps diversify geopolitical and growth cycles. Recommendation: consider small allocations to international and emerging markets to broaden growth sources and reduce concentration risk while keeping core US exposure for stability.

Market capitalization Info

  • Large-cap
    36%
  • Mega-cap
    35%
  • Mid-cap
    21%
  • Small-cap
    6%
  • Micro-cap
    2%

The market capitalization mix favors large companies with Mega and Big caps totaling about 71 percent while mid small and micro caps make up the remainder. Large caps often provide greater stability and liquidity whereas smaller caps historically offer higher long-term return potential but with higher volatility. This tilt moderates volatility relative to a small-cap heavy portfolio but may miss some excess returns during cyclical rallies. Recommendation: decide whether to increase mid and small-cap exposure for potential growth or keep the large-cap bias for stability and lower tracking error versus major US benchmarks.

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.

Efficient Frontier optimization finds the best risk return tradeoff among the same available assets by changing weights not adding new ones — the Efficient Frontier is a curve showing portfolios that offer the highest expected return for a given level of risk. Optimization here can reduce portfolio volatility for the same return or increase expected return for the same risk by reweighting holdings and managing overlap. Limitations include reliance on historical estimates and the current asset set; the most efficient mix within these ETFs may still lack broader diversification. Recommendation: run a constrained optimization and compare optimized weights to your risk tolerance before implementing.

Dividends Info

  • Avantis All Equity Markets ETF 1.70%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Weighted yield (per year) 1.38%

The blended dividend yield is modest at about 1.38 percent with the dividend-focused ETF contributing the highest yield at 2.8 percent. Dividend yield can provide steady income and slightly cushion volatility but in a growth-weighted portfolio dividends are a small portion of total return. For income-oriented investors higher yielding allocations may be appropriate; for growth focused investors reinvestment of dividends supports compounding. Recommendation: if income is a goal consider tilting toward higher yield or using a small bond ladder; if not accept the lower yield as a tradeoff for growth potential.

Ongoing product costs Info

  • Avantis All Equity Markets ETF 0.23%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

Total expense ratio (TER) across the mix is very low at around 0.06 percent which is excellent for long-term compounding. Individual fees vary with Avantis at 0.23 percent and the passive ETFs lower at 0.03–0.06 percent; this small fee differential can be justified if the higher-cost fund adds diversification or strategy value. Lower costs directly increase net returns over decades, so this alignment with low-cost best practices is positive. Recommendation: retain low-cost core exposures and periodically review active holdings to ensure the fee premium is delivering expected benefits.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey