Two fund global stock portfolio with strong US tilt low costs and balanced factor exposure
Report created on May 25, 2026Risk profile
4/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 80.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00%
This portfolio is a very straightforward two‑fund setup, holding only broad stock index ETFs. Around four‑fifths sits in a US large‑cap fund tracking the main US market, with the remaining fifth in a total international stock ETF covering developed and emerging markets outside the US. That creates a single‑asset‑class portfolio that is simple to monitor and understand. Structurally, it behaves like a global equity portfolio with a clear home‑country tilt toward the US. The simplicity is a strength here: there are no narrow thematic bets or complex products, so most of the behaviour can be explained by broad global equity conditions rather than idiosyncratic or niche exposures.
Growth
From mid‑2016 to mid‑2026, $1,000 in this portfolio grew to about $3,865, which implies a compound annual growth rate (CAGR) of 14.53%. CAGR is like average speed on a road trip: it smooths out the bumps to show steady‑state growth. Over this period, the portfolio slightly lagged the US market but comfortably beat the global market index, which reflects its US‑heavy structure. The maximum drawdown of about ‑34% during early 2020 lines up with a typical deep equity selloff, then a relatively quick recovery within roughly five months. This path shows strong long‑term growth but with the sharp ups and downs you’d expect from a 100% stock allocation.
Projection
The forward projection uses a Monte Carlo simulation, which essentially re‑mixes past return and volatility patterns thousands of times to explore many plausible futures. It shows a median outcome where $1,000 grows to roughly $2,854 over 15 years, with a wide “middle” band from about $1,862 to $4,295. That spread highlights how uncertain equity returns can be, even when the long‑run expectation is positive. About three‑quarters of the simulations end with a gain, but a meaningful slice produces flat or weak results. As with any simulation based on history, these paths are not promises; structural changes in markets can always make the future behave differently from the past.
Asset classes
- Stocks 100%
All of this portfolio is invested in stocks, with no bonds, cash equivalents, or alternative assets. That means there is no built‑in anchor to dampen volatility when equity markets fall; performance will largely follow global stock cycles. In diversified benchmarks, it’s more common to see at least some allocation to defensive asset classes, especially as a buffer during sharp equity downturns. Here, the upside is full participation in equity growth, while the trade‑off is that any major market correction will be felt directly. This makes the portfolio’s behaviour relatively easy to interpret: it’s essentially a pure equity growth engine without other moving parts.
Sectors
- Technology 32%
- Financials 14%
- Telecommunications 10%
- Industrials 10%
- Consumer Discretionary 10%
- Health Care 8%
- Consumer Staples 5%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
Sector exposure is fairly broad, though tilted toward technology at about a third of the equity allocation, followed by financials, telecom, industrials, and consumer areas. This reflects the current shape of global stock indices, where tech and related industries have grown large due to strong performance and earnings weight. Tech‑heavy portfolios can experience more pronounced swings when interest rates change or when sentiment around growth companies shifts quickly. At the same time, there is still meaningful exposure to more cyclical and defensive sectors like health care, staples, utilities, and energy. Overall, the sector mix aligns closely with broad equity benchmarks, which is a solid indicator of healthy diversification across different parts of the economy.
Regions
- North America 81%
- Europe Developed 7%
- Asia Developed 3%
- Japan 3%
- Asia Emerging 3%
- Australasia 1%
- Africa/Middle East 1%
Geographically, about 81% of the portfolio sits in North America, with modest slices in Europe, Japan, developed Asia, emerging Asia, Australasia, and Africa/Middle East. That heavy US tilt means portfolio returns are highly tied to US economic conditions, corporate earnings, and the dollar. Compared to a market‑cap‑weighted global index, the US share here is higher, which has been helpful over the last decade given strong US equity performance. The trade‑off is less exposure to other regions that may behave differently across cycles. Still, the presence of multiple non‑US regions adds some global diversification rather than concentrating everything in a single market.
Market capitalization
- Mega-cap 46%
- Large-cap 34%
- Mid-cap 18%
- Small-cap 1%
By market capitalization, almost half the portfolio is in mega‑caps, with another third in large‑caps, and a smaller slice in mid‑caps plus a tiny allocation to small‑caps. This profile is very similar to major global indices, where the largest companies dominate due to their market value. Mega‑ and large‑caps often provide more stability and liquidity than smaller firms, but they can be more mature, with growth driven by incremental gains rather than big leaps. Mid‑caps introduce some additional growth potential and diversification, while the very small small‑cap slice has limited influence. Overall, the size distribution supports a mainstream, index‑like behaviour without extreme tilts toward tiny or speculative companies.
True holdings
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NV NVIDIA Corporation 6.28%
Part of fund(s):- Vanguard S&P 500 ETF
-
AA Apple Inc 5.16%
Part of fund(s):- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 3.92%
Part of fund(s):- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 3.35%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 2.90%
Part of fund(s):- Vanguard S&P 500 ETF
-
AV Broadcom Inc 2.56%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 2.31%
Part of fund(s):- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 1.74%
Part of fund(s):- Vanguard S&P 500 ETF
-
TS Tesla Inc 1.39%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
-
BR Berkshire Hathaway Inc 1.13%
Part of fund(s):- Vanguard S&P 500 ETF
- Top 10 total 30.74%
Looking through the ETFs’ top holdings, a significant share of the portfolio sits in a small group of mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, and Alphabet’s share classes. Because these giants appear in both US and international indexes (in different ways or share classes), they can create hidden concentration even when only broad funds are used. About a third of the total portfolio is captured in the disclosed top‑10 lists, and overlap within that slice is meaningful. It’s worth noting that overlap is probably understated, since only top‑10 holdings are visible; many of these names are also large weights just below the top‑10 cut in multiple funds.
Factors
Factor exposures are broadly neutral across all six dimensions: value, size, momentum, quality, low volatility, and yield. Factor exposure is like checking which “personality traits” your portfolio has, based on characteristics research has linked to returns over decades. A neutral reading around the 50% mark suggests the portfolio behaves very similarly to the broad market, without a clear tilt toward cheap stocks, recent winners, or high‑yield names. This neutrality is consistent with holding large, diversified index funds. In practice, it means performance is likely to track overall market cycles rather than being driven by specialized factor themes, making behaviour more predictable relative to standard benchmarks.
Risk contribution
-
Vanguard S&P 500 ETF
Weight: 80.00% 82.3% -
Vanguard Total International Stock Index Fund ETF Shares
Weight: 20.00% 17.7%
Risk contribution measures how much each holding adds to the portfolio’s overall ups and downs, which can differ from simple weights. Here, the S&P 500 ETF is 80% of the allocation but contributes about 82% of the total risk, while the international ETF is 20% of the allocation and contributes around 18% of risk. Those figures are very close to their weights, suggesting there’s no hidden risk hotspot beyond the obvious size difference. Because only two broad, relatively similar equity funds are used, overall portfolio risk is mainly about total equity exposure rather than idiosyncratic risk from one aggressive position.
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 efficient frontier analysis shows that this portfolio sits on or very close to the curve of best possible risk/return combinations using its existing holdings. The Sharpe ratio, which compares return to volatility after adjusting for a risk‑free rate, is 0.63 for the current mix, while an optimized version using only these two funds could reach 0.84 with slightly higher risk. A minimum‑variance mix would lower volatility a bit but also lower expected return. Because the current point is already essentially on the frontier, the allocation can be considered efficient for its risk level based on historical data, meaning it makes good use of the two building blocks it holds.
Dividends
- Vanguard S&P 500 ETF 1.00%
- Vanguard Total International Stock Index Fund ETF Shares 2.70%
- Weighted yield (per year) 1.34%
The blended dividend yield of the portfolio is around 1.34%, mainly driven by the international fund’s higher yield of 2.7% versus about 1% from the US component. Dividend yield is the annual cash payout as a percentage of price, and it forms one piece of total return alongside price changes. Here, the income component is relatively modest, which is typical for broad market funds in periods when valuations are elevated and companies focus more on buybacks or reinvestment. This structure leans more on capital growth than on cash distributions. Over time, reinvested dividends can still make a meaningful difference, but they’re not the primary return driver in this portfolio.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.03%
The total expense ratio (TER) for this portfolio is impressively low at about 0.03%, thanks to the use of very low‑cost index ETFs. TER is the annual fee charged by funds, expressed as a percentage of assets, and it quietly reduces returns each year. Here, costs are well below typical active fund levels and even on the low side compared to many index products. That cost advantage compounds over long horizons, leaving more of the portfolio’s gross return in the investor’s pocket. From a structural perspective, this is a strong positive: the fee drag is minimal, and the cost profile aligns well with best‑practice, long‑term, index‑based investing.
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