A growth-focused portfolio with strong emphasis on developed markets and momentum stocks

Report created on Sep 13, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is strategically composed of two major ETFs focusing on developed market equities and S&P 500 momentum stocks, alongside a minor position in a broad stock market index ETF. The heavy weighting towards the Vanguard FTSE Developed Markets Index Fund ETF Shares and the Invesco S&P 500® Momentum ETF suggests a growth-oriented strategy with a tilt towards established markets and stocks exhibiting strong recent performance trends. The allocation reflects a preference for the stability and potential growth of developed economies, while the emphasis on momentum within the S&P 500 aims to capitalize on ongoing market trends.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 16.32%, with a maximum drawdown of -32.46%, indicating significant growth potential albeit with notable volatility. The days contributing to 90% of the returns being concentrated in just 34.0 days highlights the portfolio's sensitivity to specific market movements, underscoring the importance of timing in this investment strategy. The performance, while impressive, should be balanced against the inherent risks of momentum investing and the potential for sharp declines during market corrections.

Projection Info

Monte Carlo simulations project a wide range of outcomes for this portfolio, with the median simulation suggesting a 768.9% increase in value. This optimistic projection underscores the portfolio's growth potential, particularly in favorable market conditions. However, the broad range of outcomes, from a 161.5% increase at the 5th percentile to over a 1,097.3% increase at the 67th percentile, also indicates significant risk. Investors should consider the potential for both high returns and substantial volatility.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is nearly entirely allocated to stocks (99%), with a minimal cash holding (1%), aligning with its growth-focused risk profile. This heavy stock concentration enhances the portfolio's potential for high returns but also increases its exposure to market fluctuations. Diversification across different asset classes could provide a buffer against stock market volatility, potentially stabilizing returns over time.

Sectors Info

  • Financials
    21%
  • Technology
    18%
  • Industrials
    14%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Consumer Staples
    8%
  • Health Care
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is broad, with the highest concentrations in financial services, technology, and industrials. This distribution suggests a balance between cyclical sectors, which may perform well in economic upturns, and technology, which has been a significant growth driver. However, the portfolio's performance may be sensitive to shifts in these sectors' fortunes, highlighting the need for periodic reassessment of sector weightings.

Regions Info

  • North America
    56%
  • Europe Developed
    26%
  • Japan
    10%
  • Asia Developed
    4%
  • Australasia
    3%

Geographic allocation emphasizes North America and developed European markets, alongside notable positions in Japan and other developed Asian economies. This focus on developed markets is conducive to investors seeking growth with a moderate risk profile, as these regions typically offer more stable investment environments compared to emerging markets. However, the absence of emerging market exposure may limit potential returns from high-growth economies.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    33%
  • Mid-cap
    15%
  • Small-cap
    2%

The portfolio's bias towards mega and big cap stocks (81% combined) reflects a preference for large, established companies likely to offer stability and steady growth. However, the relatively small allocation to medium, small, and micro-cap stocks suggests a missed opportunity for higher growth potential, albeit with increased risk. Diversifying across a broader range of market capitalizations could enhance returns while managing risk.

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.

Based on the Efficient Frontier analysis, there may be opportunities to optimize the portfolio for a better risk-return ratio. While the current allocation emphasizes growth, adjusting the balance between the ETFs or introducing new asset classes could potentially offer similar returns with reduced volatility. However, any optimization should consider the investor's risk tolerance and investment horizon.

Dividends Info

  • Invesco S&P 500® Momentum ETF 0.50%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Weighted yield (per year) 1.58%

The portfolio's total dividend yield of 1.58% contributes to its overall return, with a notable variance in yields across the ETFs. While the yield provides a steady income stream, the primary focus appears to be on capital appreciation. Investors prioritizing income alongside growth may want to consider adjusting the allocation to enhance the dividend yield without significantly compromising growth potential.

Ongoing product costs Info

  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.08%

The portfolio benefits from low total expense ratios (TER), averaging 0.08% across the ETFs, which is commendably efficient for a growth-oriented strategy. Keeping costs low is crucial for enhancing long-term returns, as even small differences in fees can have a significant impact over time. This cost efficiency is a positive aspect of the portfolio, supporting better net performance.

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