A growth-focused portfolio with high US exposure and significant technology sector weighting

Report created on Jan 9, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed primarily of ETFs and mutual funds, with a notable concentration in Vanguard products. The largest positions, such as the Vanguard S&P 500 ETF and Vanguard Total Stock Market Index Fund ETF, make up over 16% each, indicating a strong tilt towards broad market exposure. Compared to common benchmarks, this portfolio leans heavily on equity investments. While this composition is typical for growth-oriented portfolios, it may lack diversity in other asset classes like bonds or real estate. Consider adding more varied asset classes to balance risk and potential returns.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.11%, which is respectable for a growth-focused strategy. However, it also experienced a maximum drawdown of -27.08%, indicating potential vulnerability during market downturns. This performance is consistent with the profile of a growth portfolio, which often sees high volatility. To mitigate risk, consider incorporating more defensive assets or strategies, especially if nearing a financial goal or timeline that requires capital preservation.

Projection Info

Monte Carlo simulations suggest a wide range of potential outcomes for this portfolio, with an annualized return of 9.52% across 1,000 simulations. The median outcome shows an 82.57% increase, but the 5th percentile indicates a potential loss of -71.87%. These projections rely on historical data and assume similar market conditions in the future, which may not hold true. To improve confidence in future outcomes, consider stress-testing the portfolio under various economic scenarios or diversifying to reduce reliance on historical patterns.

Asset classes Info

  • Stocks
    97%
  • Bonds
    2%

The portfolio is heavily weighted towards stocks, comprising over 97% of the total allocation. Bonds and other asset classes are minimally represented. While this allocation aligns with a growth strategy, it may expose the portfolio to significant volatility. A more balanced approach could involve increasing exposure to bonds or alternative investments, which can provide stability and income during market fluctuations. Assess whether this stock-heavy approach aligns with your risk tolerance and financial goals.

Sectors Info

  • Technology
    35%
  • Health Care
    12%
  • Financials
    11%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Discretionary
    7%
  • Consumer Discretionary
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Utilities
    2%

Technology dominates the sector allocation at 35%, followed by healthcare and financial services. This concentration in technology may lead to increased volatility, especially during periods of interest rate changes or sector-specific downturns. While sector concentration can drive high returns, it also increases risk. Consider diversifying into underrepresented sectors to mitigate potential downturns in technology and enhance overall portfolio resilience.

Regions Info

  • North America
    93%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%
  • No data
    1%

The portfolio is predominantly invested in North America, with over 92% exposure, which limits geographic diversification. This heavy regional focus may result in vulnerability to local economic fluctuations and currency risks. Expanding exposure to other regions like Europe or Asia could offer diversification benefits and potential opportunities in emerging markets. Ensure the geographic allocation aligns with your broader investment strategy and risk profile.

Redundant positions Info

  • VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES
    VANGUARD TARGET RETIREMENT 2055 FUND INVESTOR SHARES
    VANGUARD GROWTH INDEX FUND ADMIRAL SHARES
    VANGUARD 500 INDEX FUND ADMIRAL SHARES
    VANGUARD INSTITUTIONAL TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL SHARES
    VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES
    Vanguard Total Stock Market Index Fund ETF Shares
    VANGUARD TARGET RETIREMENT 2050 FUND INVESTOR SHARES
    Vanguard Growth Index Fund ETF Shares
    Vanguard S&P 500 ETF
    VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES
    Invesco NASDAQ 100 ETF
    Vanguard Information Technology Index Fund ETF Shares
    VANGUARD FTSE SOCIAL INDEX FUND INSTITUTIONAL SHARES
    High correlation
  • VANGUARD EMERGING MARKETS STOCK INDEX FUND INSTITUTIONAL SHARES
    EMERGING MARKETS EQUITY FUND EMERGING MARKETS EQUITY FUND
    High correlation

Many assets in the portfolio are highly correlated, particularly those tracking similar indices or sectors. This high correlation can reduce diversification benefits, as correlated assets tend to move together, especially during market downturns. To enhance diversification, consider reducing overlap by selecting assets with lower correlation. This can help mitigate risk and improve the portfolio's ability to weather different market conditions.

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.

Optimization analysis suggests that the current portfolio could be more efficient by adjusting the allocation of existing assets. The potential optimized portfolio offers a higher expected return of 46.33% at the same risk level. This involves reallocating assets to achieve the best possible risk-return ratio, known as the Efficient Frontier. Consider reviewing asset weights and reducing overlap to enhance overall efficiency and align with your investment goals.

Dividends Info

  • Eli Lilly and Company 0.70%
  • Invesco NASDAQ 100 ETF 0.60%
  • CORE FIXED INCOME FUND CORE FIXED INCOME FUND 3.80%
  • INFLATION-LINKED FIXED INCOME FUND INFLATION-LINKED FIXED INCOME FUND 2.90%
  • VANGUARD EMERGING MARKETS STOCK INDEX FUND INSTITUTIONAL SHARES 3.20%
  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 1.20%
  • VANGUARD FTSE SOCIAL INDEX FUND INSTITUTIONAL SHARES 0.70%
  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • VANGUARD EXTENDED MARKET INDEX FUND INSTITUTIONAL SHARES 0.80%
  • VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.30%
  • VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES 0.90%
  • VANGUARD INFLATION-PROTECTED SECURITIES FUND INSTITUTIONAL SHARES 2.50%
  • VANGUARD INSTITUTIONAL TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL SHARES 1.00%
  • Vanguard Real Estate Index Fund ETF Shares 3.90%
  • Vanguard S&P 500 ETF 1.20%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES 0.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • VANGUARD TOTAL INTERNATIONAL BOND INDEX FUND INSTITUTIONAL SHARES 1.90%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND INSTITUTIONAL PLUS SHARES 1.70%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES 1.30%
  • Vanguard Value Index Fund ETF Shares 1.70%
  • Vanguard Growth Index Fund ETF Shares 0.50%
  • Weighted yield (per year) 0.86%

The portfolio's total dividend yield is relatively low at 0.86%, reflecting its growth-oriented nature. While dividends provide a steady income stream, this portfolio prioritizes capital appreciation. If income generation is a goal, consider reallocating some assets to higher-yielding investments. Balancing growth with income can provide a more stable return profile, especially for investors nearing retirement or requiring regular cash flow.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • EMERGING MARKETS EQUITY FUND EMERGING MARKETS EQUITY FUND 0.76%
  • INTERNATIONAL EQUITY FUND INTERNATIONAL EQUITY FUND 0.68%
  • CORE FIXED INCOME FUND CORE FIXED INCOME FUND 0.48%
  • INFLATION-LINKED FIXED INCOME FUND INFLATION-LINKED FIXED INCOME FUND 2.30%
  • VANGUARD EMERGING MARKETS STOCK INDEX FUND INSTITUTIONAL SHARES 0.10%
  • VANGUARD TARGET RETIREMENT 2055 FUND INVESTOR SHARES 0.08%
  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 0.04%
  • VANGUARD TARGET RETIREMENT 2050 FUND INVESTOR SHARES 0.08%
  • VANGUARD FTSE SOCIAL INDEX FUND INSTITUTIONAL SHARES 0.12%
  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • VANGUARD EXTENDED MARKET INDEX FUND INSTITUTIONAL SHARES 0.05%
  • VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.05%
  • VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES 0.02%
  • VANGUARD INFLATION-PROTECTED SECURITIES FUND INSTITUTIONAL SHARES 0.07%
  • VANGUARD INSTITUTIONAL TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL SHARES 0.03%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES 0.02%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • VANGUARD TOTAL INTERNATIONAL BOND INDEX FUND INSTITUTIONAL SHARES 0.07%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND INSTITUTIONAL PLUS SHARES 0.08%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES 0.04%
  • Vanguard Value Index Fund ETF Shares 0.04%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, which supports better long-term performance by minimizing fees. Low costs are beneficial in compounding returns over time. However, some individual funds have higher fees, which could be optimized. Evaluate whether lower-cost alternatives are available without compromising investment objectives. Keeping costs in check is crucial for maximizing net returns over the investment horizon.

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