A growth-focused portfolio with strong U.S. exposure and diversified sector allocation

Report created on Jan 21, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of 99% stocks and 1% cash, showcasing a strong equity focus. With a 50% allocation to the Vanguard Total Stock Market Index Fund ETF, it leans heavily on U.S. equities. The inclusion of international ETFs, such as the Vanguard Total International Stock Index Fund ETF, adds a global dimension, albeit at a smaller scale. This composition aligns with a growth-oriented strategy, balancing domestic and international exposure. For further diversification, consider incorporating bonds or alternative assets to mitigate risk during market volatility.

Growth Info

Historically, the portfolio has shown a strong CAGR of 14.89%, indicating robust growth over time. However, the max drawdown of -35.89% highlights significant volatility, a common trait in growth-focused portfolios. Compared to benchmarks, this performance suggests a competitive edge, though past performance is not indicative of future results. To maintain growth, consider periodic rebalancing to ensure alignment with market conditions and personal risk tolerance, particularly during volatile periods.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a promising outlook with an annualized return of 15.62%. The portfolio's 5th percentile suggests a potential downside of 38.2%, while the median projection shows significant growth. Despite these optimistic projections, it's important to remember that simulations are based on past data and cannot guarantee future performance. Regular reviews and adjustments can help align the portfolio with evolving market conditions and personal goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks, with 99% in equities and negligible cash holdings. This allocation suggests a high-risk, high-reward strategy typical of growth portfolios. Compared to benchmarks, this composition may offer substantial growth potential but also exposes the portfolio to significant volatility. To enhance diversification, consider incorporating other asset classes such as bonds or real estate, which may provide stability and reduce risk during market downturns.

Sectors Info

  • Technology
    25%
  • Financials
    16%
  • Consumer Discretionary
    12%
  • Industrials
    12%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    5%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation is balanced, with technology making up 25% of the portfolio, followed by financial services at 16%. This distribution aligns well with common benchmarks, providing a broad exposure to various economic sectors. However, the tech-heavy focus may lead to increased volatility, especially during interest rate hikes. While this composition supports growth, consider periodically reviewing sector allocations to ensure they align with current market trends and personal risk tolerance.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Japan
    6%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, with 72% exposure, followed by Europe Developed at 12%. This aligns with typical U.S.-centric portfolios but may limit exposure to emerging markets. The geographical diversification could be improved by increasing allocations to underrepresented regions like Asia or Latin America. This adjustment may provide additional growth opportunities and reduce reliance on the U.S. market, enhancing overall portfolio resilience.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    24%
  • Mid-cap
    20%
  • Small-cap
    13%
  • Micro-cap
    6%

The portfolio's market capitalization distribution is diverse, with 36% in mega-cap stocks and a notable 13% in small caps. This mix provides a balance between stability and growth potential, as large-cap stocks offer reliability while small caps present opportunities for higher returns. Compared to benchmarks, this allocation is well-balanced and can support long-term growth. However, consider monitoring market conditions to adjust capitalization exposure as needed to optimize risk and return.

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's risk-return profile can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. By adjusting asset allocations, the portfolio can potentially achieve higher returns for a given level of risk. This optimization focuses on current assets and their weightings, not diversification. Regularly reviewing and adjusting allocations can help maintain an optimal balance between risk and return, enhancing long-term growth potential.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.89%

The total dividend yield of 1.89% suggests a modest income component, with the Avantis® International Small Cap Value ETF contributing significantly at 4.30%. While dividends are not the primary focus of a growth portfolio, they can provide a steady income stream and help cushion against market volatility. Consider evaluating the role of dividends in your overall strategy and whether adjustments are needed to balance growth and income objectives.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

With a total expense ratio (TER) of 0.10%, the portfolio is cost-efficient, supporting better long-term performance. The low costs of ETFs like the Schwab U.S. Large-Cap Growth ETF at 0.04% contribute to this efficiency. Keeping costs low is crucial for maximizing returns, as high fees can erode gains over time. Continue monitoring and managing costs to ensure they remain competitive and aligned with your investment strategy.

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