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A growth tilted low cost portfolio with strong US focus and modest diversification beyond large caps

Report created on Aug 2, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is built almost entirely from broad stock index and growth ETFs, with a small slice in bonds. The core positions track similar large US companies, so the “headline” diversification across funds somewhat overstates the true spread of holdings. For a balanced profile, 95% in stocks and 5% in bonds is aggressive, skewing toward growth rather than stability. This allocation is well-balanced in terms of quality and simplicity, and aligns closely with modern index-based approaches, but leans heavier on risk than many balanced benchmarks. Shifting a bit more into stabilizing assets or holding fewer overlapping stock funds could make the structure cleaner and closer to typical balanced mixes.

Growth Info

Historically, a 15.49% CAGR (Compound Annual Growth Rate) is very strong; CAGR is like your average yearly “speed” over the whole trip, smoothing out bumps. If you’d started with $10,000, that rate would have grown it to roughly $40,000 over ten years, far ahead of many classic balanced benchmarks that hold more bonds. The trade-off is a max drawdown of about -32%, meaning at one point the portfolio was down roughly one-third from a prior peak. That kind of drop is normal for growth-heavy mixes but emotionally tough. It’s worth checking if that depth of temporary loss would feel manageable during severe market stress.

Projection Info

The Monte Carlo analysis runs 1,000 simulated “what if” futures based on how similar portfolios behaved in the past. It’s like rolling the dice on many possible return paths, then seeing the range of ending values. The median outcome of about 436% suggests that, in a typical simulation, money more than quadruples over a long horizon, with an annualized simulation return near 14%. But the 5th percentile ending around 70% shows that unlucky paths can leave you below where you started. All simulations lean on historical patterns, which may not repeat, so these numbers are useful guideposts, not promises about future wealth.

Asset classes Info

  • Stocks
    95%
  • Bonds
    5%

With 95% in stocks and 5% in bonds, the asset mix is clearly growth-oriented, even though it’s labeled as balanced. Traditional balanced portfolios often sit closer to a 60/40 or 70/30 stock-to-bond split, which usually smooths volatility and drawdowns. The current structure will likely track stock markets closely, with bonds providing only a small cushion during downturns. On the positive side, the equity heavy tilt has supported strong long-term returns and aligns with a long time horizon. For someone truly seeking a more stable ride, shifting a slice from equities into high-quality defensive assets could better align short-term comfort with long-term growth goals.

Sectors Info

  • Technology
    37%
  • Consumer Discretionary
    11%
  • Telecommunications
    11%
  • Financials
    10%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector exposure is concentrated in technology at 37%, with additional weight in consumer cyclicals, communication services, and financials. This mirrors many broad US indexes today, so the sector composition matches benchmark data, which is a strong indicator of diversification within the stock sleeve. The flip side is that tech and growth areas can be more sensitive to interest rates and sentiment swings, leading to sharper ups and downs. Defensive areas like utilities and real estate are present but small. If smoother performance is a priority, dialing back the growth tilt slightly or increasing exposure to more defensive sectors via broader or more balanced funds could help temper volatility.

Regions Info

  • North America
    88%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, about 88% in North America creates a strong home-country tilt, very similar to typical US-focused portfolios. This allocation is well-balanced and aligns closely with how many US investors build their core holdings, which has worked well during long stretches when US markets outperformed. However, the small stakes in developed and emerging markets outside the US mean global diversification benefits are limited. If the US underperforms other regions for a stretch, this portfolio would feel that more sharply. Gradually increasing the share of broad international exposure can spread economic and currency risk, while still keeping the US as the primary driver of long-term returns.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    29%
  • Mid-cap
    15%
  • Small-cap
    2%
  • Micro-cap
    1%

Market cap exposure is dominated by mega and big companies, with modest slices in mid and very little in small or micro caps. This pattern closely tracks standard index benchmarks and is generally a good thing for stability and liquidity, since larger companies tend to be more established and less fragile. However, it also means less exposure to the potentially higher long-term growth (and risk) offered by smaller companies. Given the already high overall risk from the stock/bond mix, this large-cap tilt actually helps keep volatility more manageable. Anyone wanting a bit more diversification could slightly boost mid or small cap exposure through broad funds rather than concentrated bets.

Redundant positions Info

  • Vanguard Growth Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    Schwab U.S. Large-Cap Growth ETF
    Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

Most of the major stock ETFs here are highly correlated, meaning they tend to move almost in lockstep. Correlation is just a measure of how often assets go up or down together; when it’s high, the benefit of holding multiple funds is limited during big market swings. The overlap between US total market, S&P 500, US growth, and total world funds means diversification is less than it appears from the fund count alone. The positive side is that each fund is individually strong and low cost. Streamlining by trimming overlapping funds while keeping broad exposure could simplify the portfolio without sacrificing its core risk/return profile.

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.

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On a risk versus return basis, this set of assets likely sits close to an Efficient Frontier for growth-heavy mixes. The Efficient Frontier is just a curve showing the best possible trade-off between risk and return using a given menu of investments, without changing what the underlying options are. Because several ETFs here are highly overlapping, adjusting their weights won’t dramatically improve efficiency until some redundancy is removed. Streamlining similar funds first, then re-running an optimization, could reveal simple shifts that keep expected return while slightly reducing volatility. Efficiency here is about the risk-return ratio, not necessarily about income, taxes, or personal preferences.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.20%

The overall yield of about 1.2% is modest, reflecting the growth tilt and heavy weighting in large US stocks. Yield is the cash income you’d expect each year from dividends and interest, before price changes; it’s useful for investors wanting regular payouts. The dedicated dividend and bond funds add a bit of steady income, which supports a more balanced cash flow profile than pure growth ETFs alone. For someone focused mainly on long-term growth, this level of yield is perfectly sensible. If future goals include more reliable income, gradually increasing the share of dividend-focused or income-generating holdings could provide a higher and more predictable cash stream.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The total TER (Total Expense Ratio) of around 0.04% is impressively low, supporting better long-term performance. TER is like an annual membership fee charged as a tiny percentage of your assets; the lower it is, the more of your returns you actually keep. All the underlying ETFs are cheap, especially compared with typical active funds that might charge 0.5–1% or more every year. Over decades, that cost gap can compound into a huge difference in ending wealth. Costs here are already a clear strength, so the main focus going forward can stay on allocation, risk, and simplicity rather than squeezing out further fee reductions.

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