Growth-focused portfolio with high allocation in large-cap and S&P 500 ETFs
Report created on Jun 9, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 50.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00%
Your portfolio comprises two ETFs: the Schwab U.S. Large-Cap Growth ETF and the Vanguard S&P 500 ETF, each holding a 50% stake. This composition indicates a strong focus on U.S. large-cap equities, with an emphasis on growth and broad market exposure. The allocation mirrors the performance of major indices, particularly favoring sectors like technology and consumer cyclicals. However, this also results in low diversification, as both ETFs are highly correlated and concentrated in similar stocks and sectors.
Growth
Historically, your portfolio has shown a Compound Annual Growth Rate (CAGR) of 15.70%, with a maximum drawdown of -33.17%. These figures suggest a robust growth trajectory, albeit with significant volatility. The days contributing most to returns are relatively few, indicating that a handful of strong market days have driven much of the portfolio's performance. This pattern underscores the growth orientation but also highlights the risk associated with market timing and volatility.
Projection
Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a substantial increase in value. However, the broad spread between the 5th and 67th percentiles underscores the inherent uncertainty and risk. While the majority of simulations forecast positive returns, the variability suggests that outcomes could significantly diverge, emphasizing the need for risk management and possibly diversification to mitigate extreme scenarios.
Asset classes
- Stocks 100%
The portfolio is exclusively invested in stocks, with no allocation to other asset classes such as bonds or real estate. This singular focus on equities enhances growth potential but also increases susceptibility to market downturns. Diversifying across asset classes can provide a buffer during stock market volatility, potentially smoothing out returns over time.
Sectors
- Technology 40%
- Consumer Discretionary 12%
- Telecommunications 11%
- Financials 11%
- Health Care 10%
- Industrials 6%
- Consumer Staples 4%
- Energy 2%
- Basic Materials 2%
- Utilities 1%
- Real Estate 1%
Sector allocation is heavily weighted towards technology, followed by consumer cyclicals, communication services, and financial services. This concentration in high-growth sectors contributes to the portfolio's strong performance in bullish markets but also exposes it to sector-specific downturns. Broadening the sector exposure could reduce volatility and improve resilience against market shifts.
Regions
- North America 100%
Geographic exposure is entirely focused on North America, missing out on potential opportunities in developed European and Asian markets, as well as emerging markets. This geographic concentration increases risk related to the U.S. economy and dollar fluctuations. Expanding into international equities could provide growth opportunities and reduce geographic risk.
Market capitalization
- Mega-cap 55%
- Large-cap 28%
- Mid-cap 15%
- Small-cap 1%
The majority of the portfolio is allocated towards mega and large-cap stocks, offering stability and lower volatility compared to smaller companies. However, medium and small-cap stocks, though riskier, can offer higher growth potential and further diversification benefits. Including a broader range of market capitalizations could enhance returns and reduce overall portfolio risk.
Redundant positions
-
High correlationSchwab U.S. Large-Cap Growth ETFVanguard S&P 500 ETF
The high correlation between the Schwab U.S. Large-Cap Growth ETF and the Vanguard S&P 500 ETF limits the diversification benefits within your portfolio. Both ETFs track large-cap U.S. equities, often overlapping in their holdings. Diversifying into assets with lower correlation can reduce risk and smooth out returns over different market conditions.
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.
Before optimizing, it's recommended to address the high correlation between the two ETFs in your portfolio. This overlap brings minimal diversification benefits, as both track similar segments of the market. Exploring assets with lower correlation or different risk-return profiles could improve diversification and potentially enhance the risk-adjusted returns of the portfolio.
Dividends
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard S&P 500 ETF 1.30%
- Weighted yield (per year) 0.85%
The dividend yield of the portfolio stands at 0.85%, with the Vanguard S&P 500 ETF contributing a higher yield compared to the Schwab U.S. Large-Cap Growth ETF. While the focus is on growth, dividends contribute to total returns and provide a source of income, which can be particularly beneficial during market downturns. Considering investments with varying dividend yields could enhance income and reduce volatility.
Ongoing product costs
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.04%
The total expense ratio (TER) of the portfolio is impressively low at 0.04%, which supports better long-term performance by minimizing costs. Keeping investment costs low is crucial for maximizing returns, especially in a growth-oriented strategy where compound growth plays a significant role.
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