Broad low cost stock focused portfolio with strong global market alignment and efficient risk profile
Report created on Jul 18, 2024Risk profile
4/7
Diversification profile
3/5
Positions
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VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 67.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 17.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 16.00%
The portfolio is built from just three broad stock ETFs, with a big tilt to total US stocks, a smaller slice in total international stocks, and an added S&P 500 position. In plain terms, it is a simple 100% equity setup: roughly four-fifths in the US and the rest overseas. This kind of “three-fund” style design is popular because it’s easy to understand and maintain. The main takeaway is that the structure is clean and intentionally stock-heavy, which suits someone willing to ride through ups and downs in exchange for long‑term growth rather than short‑term stability.
Growth
From 2016 to 2026, $1,000 grew to about $3,316, which is a compound annual growth rate (CAGR) of 12.77%. CAGR is like your average speed on a long road trip, smoothing out all the bumps. The portfolio slightly lagged the US market by about 1% per year but beat the global market by roughly 1.5% per year, which is a solid outcome. The max drawdown of about -35% means the portfolio at one point fell around a third from a peak. That level of drop is typical for an all‑stock mix and reflects the emotional and financial swings that come with growth‑oriented investing.
Asset classes
- Stocks 100%
All assets here are stocks, with no bonds, cash, or alternatives. That makes the portfolio straightforward but also means no built‑in cushion when markets fall. Asset allocation is the main driver of risk and return: adding bonds normally smooths volatility and reduces drawdowns, while pure equity aims for higher long‑term growth at the cost of bigger swings. Compared with a typical “balanced” mix, which often includes a sizable bond slice, this setup is more aggressive. It suits someone whose priority is long‑term appreciation and who can tolerate significant interim declines without needing to sell.
Sectors
- Technology 29%
- Financials 14%
- Industrials 11%
- Consumer Discretionary 10%
- Health Care 10%
- Telecommunications 9%
- Consumer Staples 5%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
Sector exposure is fairly broad, with technology the largest at about 29%, followed by financials, industrials, and consumer-related areas. This looks similar to major global benchmarks, which is a strong indicator of healthy diversification across the economy. A tech‑heavy tilt can boost returns during innovation booms but also makes the portfolio more sensitive to interest rate changes and regulatory news that hit growth names. The positive here is that the mix isn’t wildly off benchmark norms, so you’re not placing a big concentrated bet on a single industry. Instead, the portfolio participates in many different economic drivers.
Regions
- North America 84%
- Europe Developed 6%
- Japan 3%
- Asia Developed 3%
- Asia Emerging 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, exposure is strongly tilted to North America at around 84%, with modest allocations to Europe, Japan, and other developed and emerging regions. This is more US‑centric than a pure global market index, which usually has a lower US share and more non‑US exposure. A heavier home bias can feel comfortable and has helped over the past decade given US outperformance. The flip side is a higher dependency on one region’s economic and policy environment. Investors who want to reduce that single‑region reliance might gradually raise the international share, while others may be comfortable keeping a clear home tilt.
Market capitalization
- Mega-cap 43%
- Large-cap 31%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 2%
By market cap, the portfolio leans toward mega‑ and large‑cap companies, which together dominate the exposure, with smaller slices in mid, small, and micro caps. This pattern closely mirrors broad market indexes, where the biggest companies naturally carry more weight. Larger firms often provide more stability and liquidity, while smaller ones can be more volatile but sometimes deliver higher long‑term growth. Having at least some exposure across the size spectrum helps diversify drivers of return. This allocation is well-balanced and aligns closely with global standards, avoiding an extreme bias toward either tiny speculative names or only the very largest giants.
True holdings
-
NV NVIDIA Corporation 5.31%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 5.01%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 3.75%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 2.60%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 2.33%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 1.94%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 1.84%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 1.81%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
TS Tesla Inc 1.46%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
BR Berkshire Hathaway Inc 1.17%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 27.22%
Looking through the ETFs, the biggest underlying exposures are the usual mega‑cap names like Nvidia, Apple, Microsoft, Amazon, and Alphabet. Several appear in more than one fund, which creates hidden concentration in a handful of giants even though you only hold three ETFs. Because only top-10 ETF positions are included, this overlap is probably understated, but the signal is clear: a meaningful slice of risk rides on a small set of dominant companies. That’s not unusual for broad index funds today, but it’s worth being aware that “total market” does not mean evenly spread when a few huge firms drive much of the index.
Factors
Factor exposures across value, size, momentum, quality, yield, and low volatility are all near neutral, meaning the portfolio behaves similarly to the overall market on these characteristics. Factors are like underlying “personality traits” of stocks that can explain performance patterns over time. A strong tilt toward any one factor can create big performance swings relative to the market in certain environments. Here, the absence of strong tilts suggests a broad, market‑like profile that should track general equity behavior rather than making big bets on cheap stocks, fast movers, high dividend payers, or unusually stable names. This is a clean, well-balanced factor setup.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 67.00% 69.1% -
Vanguard S&P 500 ETF
Weight: 16.00% 16.2% -
Vanguard Total International Stock Index Fund ETF Shares
Weight: 17.00% 14.7%
Risk contribution shows how much each holding adds to total portfolio volatility, which can differ from its percentage weight. Here, the total US market ETF contributes around 69% of risk on a 67% weight, the S&P 500 about 16% on a 16% weight, and the international ETF about 15% on a 17% weight. That means US positions slightly dominate portfolio risk, while international slightly under‑contributes. This is consistent with higher volatility and stronger correlations in US equities versus a more diversified global basket. If someone wanted to dial back US‑driven swings, shifting a bit more toward international would gradually rebalance where risk is coming from.
Redundant positions
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High correlationVanguard Total Stock Market Index Fund ETF SharesVanguard S&P 500 ETF
Correlation measures how closely investments move together; 1.0 means they move almost identically. The S&P 500 ETF and the total US stock ETF have a correlation of 1.0, which tells you they’re effectively behaving as one holding. Holding both doesn’t add much diversification, since most of the underlying companies significantly overlap. This is not harmful, especially with very low costs, but it is a form of duplication. A key takeaway is that future simplification, if desired, could remove one of these while keeping a similar risk/return pattern, freeing room for assets that behave more differently during market stress.
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.
On the risk–return chart, the current portfolio has a Sharpe ratio of 0.65, with expected return around 13.5% and volatility near 17.7%. The Sharpe ratio measures return per unit of risk, so higher is better. The optimal mix of the existing funds has a Sharpe around 0.76, but the analysis indicates the current allocation is already on or very close to the efficient frontier. The efficient frontier is the set of best possible risk/return combinations using these holdings only. In other words, within this simple three‑ETF setup, the portfolio is already behaving efficiently for its risk level, which is a strong positive alignment.
Dividends
- Vanguard S&P 500 ETF 0.90%
- Vanguard Total Stock Market Index Fund ETF Shares 0.90%
- Vanguard Total International Stock Index Fund ETF Shares 3.00%
- Weighted yield (per year) 1.26%
The overall dividend yield is about 1.26%, with the international fund paying more and the US funds paying less. Dividend yield is the annual cash payout relative to price, and it forms part of total return along with price appreciation. For a growth‑oriented, equity‑heavy portfolio, a modest yield like this is normal, especially when many large US companies prefer buybacks over big dividends. Income‑focused investors might want higher payouts, but for long‑term growth, reinvesting smaller dividends can still compound nicely over time. The important point is that most of the expected return here will come from capital growth, not from large regular cash distributions.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.03%
Costs are impressively low, with expense ratios around 0.03% for the US funds and 0.05% for international, leading to a blended cost near 0.03%. The total expense ratio (TER) is the annual fee charged by the ETFs, and lowering it is one of the few things fully under an investor’s control. Over decades, every fraction of a percent saved compounds into a meaningful difference in ending wealth. These ultra‑low fees are a major strength of this portfolio and support better long‑term performance compared with more expensive strategies that try to pick stocks or time markets but often fail to justify their higher charges.
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