A growth-focused portfolio with strong US exposure and moderate diversification

Report created on Apr 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists entirely of ETFs, with a significant focus on large-cap US stocks. The Vanguard S&P 500 ETF holds the largest share, followed by the Invesco NASDAQ 100 ETF and Schwab U.S. Large-Cap Growth ETF. This composition reflects a strong emphasis on growth and US market exposure. Comparing with a typical benchmark, this portfolio leans heavily towards large-cap equities, which can offer stability and potential for growth. It might benefit from a more diversified asset mix, including different asset classes, to balance risk and return more effectively.

Growth Info

Historically, this portfolio has demonstrated a solid CAGR of 13.36%, outperforming many market benchmarks. However, it has also experienced a maximum drawdown of -26.74%, indicating substantial volatility. This performance suggests that while the portfolio has been successful in generating returns, it is susceptible to significant downturns. Investors should be aware that past performance does not guarantee future results, and maintaining a diversified approach can help mitigate potential losses during market corrections.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, predicts a wide range of potential results. The median outcome suggests a 398.6% return, but outcomes vary greatly. While 965 out of 1,000 simulations show positive returns, the variability underscores the unpredictability of future markets. Investors should use these projections as a guide rather than a certainty. Diversifying across asset classes and geographies could help manage risk and improve the likelihood of achieving desired outcomes.

Asset classes Info

  • Stocks
    100%

With 100% allocation to stocks, this portfolio lacks diversification across asset classes. While equities are known for their growth potential, they also come with higher volatility. A more balanced approach might include bonds or other fixed-income securities to provide stability during market downturns. Comparing to benchmarks, which often include a mix of stocks and bonds, this portfolio could benefit from incorporating additional asset classes to reduce risk and enhance long-term returns.

Sectors Info

  • Technology
    33%
  • Financials
    13%
  • Consumer Discretionary
    12%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio is heavily weighted towards technology, which constitutes 33% of the total allocation. While this sector has driven substantial growth, it also introduces heightened volatility, especially during periods of interest rate fluctuations. Other sectors like financial services and consumer cyclicals are also well-represented. A more balanced sector allocation could reduce risk. Aligning sector weights more closely with a broad market index might provide better diversification and stability.

Regions Info

  • North America
    88%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia
    1%
  • Australasia
    1%
  • Latin America
    1%

Geographically, this portfolio is predominantly focused on North America, comprising 88% of the allocation. This heavy reliance on the US market can limit exposure to growth opportunities in other regions. While US equities have performed well historically, diversification into international markets could offer additional growth potential and reduce country-specific risks. A more balanced geographic distribution could enhance the portfolio's resilience to regional downturns.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    28%
  • Mid-cap
    14%
  • Small-cap
    7%
  • Micro-cap
    6%

The portfolio is heavily skewed towards mega-cap and big-cap stocks, with 74% of the allocation in these categories. While large-cap stocks offer stability and established growth, they may not provide the same growth potential as smaller companies. Incorporating more mid-cap and small-cap stocks could boost potential returns and enhance diversification. This strategy aligns with the goal of capturing growth opportunities across different market segments while managing risk.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Invesco NASDAQ 100 ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the Schwab U.S. Large-Cap Growth ETF and Invesco NASDAQ 100 ETF. High correlation means these assets tend to move in the same direction, reducing diversification benefits. In times of market downturns, these assets may not provide the desired risk mitigation. Diversifying with less correlated assets can enhance risk management and potentially improve the portfolio's overall stability and performance.

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.

The portfolio could be optimized further using the Efficient Frontier, a concept that helps identify the best possible risk-return ratio. By adjusting asset allocations, investors can potentially achieve higher returns for a given level of risk or maintain returns while reducing risk. This optimization focuses on current assets, suggesting reallocations among them to enhance efficiency. It's important to remember that this doesn't necessarily improve diversification but aims to maximize the portfolio's risk-adjusted performance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.90%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Large-Cap Growth ETF 0.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.33%

The portfolio's dividend yield stands at 1.33%, with the Vanguard Total International Stock Index Fund ETF contributing the highest yield. Dividends can provide a steady income stream and contribute to total returns, particularly during periods of market volatility. For growth-focused investors, dividends may be less of a priority, but maintaining a balance between growth and income-producing assets can enhance the portfolio's resilience and overall return potential.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the drag on returns. Lower costs mean more of your money remains invested, compounding over time. While the current cost structure is favorable, it's essential to monitor any changes in ETF fees. Keeping costs low is a critical component of maximizing investment returns, especially over extended periods.

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