A growth-focused portfolio with a strong emphasis on North American equities

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a high risk tolerance, seeking aggressive growth and willing to accept volatility. Ideal for a long-term horizon, it focuses on capital appreciation rather than income. The investor likely prioritizes significant returns over stability and is comfortable with market fluctuations. This approach is suitable for individuals aiming to build substantial wealth over time, such as those planning for retirement in several decades. However, as the investment horizon shortens, they may need to adjust the strategy to incorporate more conservative elements, ensuring alignment with evolving financial goals.

Positions

  • VANGUARD TARGET RETIREMENT 2050 FUND INVESTOR SHARES
    VFIFX - US92202E8628
    40.60%
  • Vanguard S&P Small-Cap 600 Growth Index Fund ETF Shares
    VIOG - US9219327940
    15.60%
  • Costco Wholesale Corp
    COST - US22160K1051
    13.20%
  • Vanguard ESG US Stock
    ESGV - US9219107334
    7.70%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    6.70%
  • Vanguard Growth Index Fund ETF Shares
    VUG - US9229087369
    5.60%
  • Meta Platforms Inc.
    META - US30303M1027
    4.70%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    3.90%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    1.00%
  • NVIDIA Corporation
    NVDA - US67066G1040
    1.00%

The portfolio is composed primarily of equity funds and stocks, with a significant allocation to the Vanguard Target Retirement 2050 Fund at 40.6%. This fund provides a diversified mix of assets aimed at growth over the long term. The portfolio also includes a variety of ETFs and individual stocks, such as Costco and Meta Platforms. Compared to typical benchmarks, this composition leans heavily toward growth-oriented equities, with minimal exposure to bonds and cash. This structure aligns with a growth profile, prioritizing capital appreciation over income. To enhance balance, consider increasing bond exposure for added stability, especially as retirement approaches.

Growth Info

Historically, the portfolio has demonstrated robust performance, with a compound annual growth rate (CAGR) of 13.45%. This indicates strong growth over time, although the maximum drawdown of -30.44% highlights vulnerability during market downturns. Compared to benchmarks, this performance is impressive, suggesting a well-chosen mix of growth assets. The concentration in high-growth sectors likely contributes to this trend. However, past performance does not guarantee future results. To mitigate potential risks, consider strategies to reduce drawdowns, such as diversifying across more defensive asset classes.

Projection Info

Utilizing Monte Carlo simulation, which predicts potential future outcomes based on historical data, the portfolio shows a wide range of possible returns. The median outcome projects an 827.4% increase, highlighting substantial growth potential. However, simulations also suggest a 5th percentile outcome of only 56%, indicating possible downside risk. These projections underscore the portfolio's growth focus, but also its volatility. While useful, simulations have limitations, as they rely on historical data that may not predict future market conditions. Regularly reviewing and adjusting allocations can help align with changing market dynamics.

Asset classes Info

  • Stocks
    94%
  • Bonds
    5%
  • Cash
    1%
  • Other
    0%
  • Not Classified
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, accounting for 94% of the allocation, with a minor 5% in bonds. This heavy equity weighting aligns with a growth strategy but may increase volatility. Compared to benchmarks, this asset class distribution is more aggressive, potentially leading to higher returns but also greater risk. The limited bond exposure suggests a focus on capital appreciation rather than income generation. To improve diversification, consider increasing bond holdings, which can provide a cushion during market volatility and contribute to a more balanced risk-return profile.

Sectors Info

  • Technology
    22%
  • Consumer Staples
    17%
  • Financials
    12%
  • Telecommunications
    11%
  • Industrials
    9%
  • Health Care
    9%
  • Consumer Discretionary
    5%
  • Consumer Discretionary
    5%
  • Real Estate
    3%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    1%

Sector allocation reveals a significant concentration in technology at 22%, followed by consumer defensive and financial services sectors. This composition reflects a growth-oriented strategy, as technology often drives market expansion. However, such concentration can lead to increased volatility, especially during sector-specific downturns. Compared to common benchmarks, this portfolio is tech-heavy, which may amplify returns but also risk. To mitigate sector-specific risks, consider diversifying into sectors with lower representation, such as utilities or basic materials, which can provide stability during economic fluctuations.

Regions Info

  • North America
    84%
  • Europe Developed
    6%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America, comprising 84% of the allocation. This focus on the U.S. market aligns with many growth strategies, given its robust equity market. However, this concentration can expose the portfolio to regional economic risks. Compared to global benchmarks, the geographic distribution lacks international diversification. To enhance global exposure and potentially reduce risk, consider increasing allocations to emerging markets or underrepresented regions like Europe or Asia, which may offer growth opportunities and diversification benefits.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    18%
  • Small-cap
    13%
  • Mid-cap
    11%
  • Micro-cap
    6%

The portfolio's market capitalization is predominantly in mega-cap stocks at 46%, with significant allocations in big and small caps. This distribution provides a mix of stability and growth potential, as mega-cap companies are typically more established, while small caps offer higher growth prospects. Compared to benchmarks, this allocation offers a balanced exposure across different market caps. However, the micro-cap exposure at 6% may introduce additional volatility. To optimize risk-return balance, consider adjusting the weightings to ensure a more even distribution across various market capitalizations.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard ESG US Stock
    Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Growth Index Fund ETF Shares
    High correlation

The portfolio contains highly correlated assets, particularly among the Vanguard ETFs. These assets tend to move together, which may limit diversification benefits during market downturns. High correlation can increase portfolio risk, as losses in one asset may coincide with losses in others. To enhance diversification, consider reducing exposure to overlapping ETFs and incorporating assets with lower correlation. This adjustment can help mitigate risk by ensuring that not all assets react similarly to market changes, providing a more stable investment experience.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Costco Wholesale Corp 0.50%
  • Vanguard ESG US Stock 0.90%
  • Meta Platforms Inc. 0.30%
  • Vanguard S&P Small-Cap 600 Growth Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.00%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.00%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Weighted yield (per year) 0.41%

The portfolio's dividend yield is relatively low at 0.41%, reflecting its growth focus. While dividends can provide a steady income stream, this portfolio prioritizes capital appreciation. The inclusion of dividend-paying assets like the Vanguard Total Bond Market Index Fund, with a yield of 3.70%, adds some income potential. However, the overall yield remains modest. For investors seeking income, consider increasing exposure to higher-yielding assets. This can provide a supplementary income stream, although it may require a shift in focus from pure growth to a more balanced approach.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard ESG US Stock 0.09%
  • Vanguard S&P Small-Cap 600 Growth Index Fund ETF Shares 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.04%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.04%. This cost efficiency supports better long-term performance, as lower fees mean more of the investment returns stay in the portfolio. Compared to industry averages, these costs are highly competitive, aligning well with best practices for cost-effective investing. Maintaining a low-cost structure is beneficial for maximizing returns over time. To continue this trend, regularly review fund expenses and seek cost-effective alternatives if needed, ensuring that the portfolio remains efficient without sacrificing quality or diversification.

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.

The portfolio could be optimized using the Efficient Frontier, which seeks the best risk-return ratio. Currently, the portfolio's expected return is below the optimal level, indicating room for improvement. By adjusting asset allocations, particularly reducing highly correlated assets, the portfolio can achieve a more efficient balance. This optimization focuses on maximizing returns for a given risk level, not necessarily increasing diversification. Regularly revisiting asset allocations and employing optimization techniques can enhance the portfolio's performance, ensuring alignment with investment goals and risk tolerance.

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