A focused growth portfolio with exclusive investment in the Vanguard S&P 500 ETF
Report created on Aug 17, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 100.00%
This portfolio is entirely invested in the Vanguard S&P 500 ETF, reflecting a singular focus on tracking the performance of the S&P 500 Index. While this strategy simplifies the investment approach and aligns with a growth-oriented profile, it inherently limits diversification across different asset classes, sectors, and geographies. The portfolio's composition is reflective of the S&P 500's sector weightings, heavily skewed towards technology and financial services, with minimal exposure to sectors like real estate and utilities.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 15.01%, with a maximum drawdown of -33.99%. These figures suggest robust growth potential, albeit with significant volatility, as evidenced by the substantial drawdown. The performance is directly tied to the broader market trends of the S&P 500, benefiting from the market's overall upward trajectory but also exposed to its downturns.
Projection
Monte Carlo simulations, based on historical data, project a wide range of outcomes for this portfolio. With a median projected growth of 593.1% and a high probability of positive returns (998 out of 1,000 simulations), the forward-looking analysis suggests a strong growth potential. However, it's crucial to remember that these projections are based on past market behavior, which does not guarantee future performance.
Asset classes
- Stocks 100%
The portfolio's allocation is 100% in stocks, specifically through the Vanguard S&P 500 ETF, offering no direct exposure to other asset classes like bonds or commodities. This allocation strategy maximizes growth potential but also increases volatility and risk, particularly in market downturns where diversification across asset classes could mitigate losses.
Sectors
- Technology 33%
- Financials 14%
- Consumer Discretionary 11%
- Health Care 10%
- Telecommunications 10%
- Industrials 8%
- Consumer Staples 6%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector allocation closely mirrors the S&P 500, with significant exposure to technology, financial services, and consumer cyclicals. This concentration in high-growth sectors has likely contributed to the portfolio's historical performance but also increases sensitivity to sector-specific risks. Diversifying across a broader range of sectors could help manage this risk.
Regions
- North America 99%
Geographically, the portfolio is almost exclusively invested in North American assets (99%), offering very little international diversification. This concentration in a single region can amplify risks related to local economic and political events. Expanding geographic exposure could provide a buffer against region-specific downturns and offer access to growth opportunities in other markets.
Market capitalization
- Mega-cap 47%
- Large-cap 35%
- Mid-cap 18%
- Small-cap 1%
The portfolio's market capitalization exposure is heavily weighted towards mega (47%) and big (35%) cap stocks, with lesser exposure to medium (18%) and small (1%) caps. This bias towards larger companies may contribute to stability and reduced volatility compared to portfolios with higher allocations to smaller caps, but it also limits potential for outsized gains from high-growth small-cap stocks.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.20%
The portfolio's dividend yield stands at 1.20%, contributing to total returns alongside capital appreciation. While not the primary focus of a growth-oriented strategy, dividends offer a source of passive income and can provide a buffer during market volatility. Reinvesting dividends can further compound growth over time.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.03%
With a total expense ratio (TER) of just 0.03%, the portfolio benefits from very low costs, enhancing net returns over the long term. Low costs are crucial for maximizing investment efficiency, particularly in a strategy reliant on tracking a market index where minimizing overhead can directly improve performance.
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