Growth-focused portfolio with heavy US equity exposure and low international diversification
Report created on Jul 23, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 30.00% -
SC Schwab U.S. Small-Cap ETF
SCHA - US8085246077 10.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 10.00%
This portfolio is heavily weighted towards US equities, with a significant emphasis on large-cap and growth-oriented stocks. The Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF together constitute 80% of the portfolio, indicating a strong focus on well-established companies within the US market. The remaining 20% is split between the Schwab U.S. Small-Cap ETF and the Vanguard Total International Stock Index Fund ETF Shares, providing some exposure to smaller companies and international markets. However, the international component is minimal, suggesting a potential area for increased diversification.
Growth
Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 14.64%, with a maximum drawdown of -34.05%. This performance indicates a relatively high level of risk, consistent with the portfolio's growth profile and heavy allocation to equities. The days contributing to 90% of the returns being concentrated in just 31.0 days highlight the volatility and the importance of being invested during the market's best-performing periods.
Projection
Monte Carlo simulations project a wide range of outcomes, with the median simulation suggesting a potential 350.9% return. This method, using historical data to forecast future returns, underscores the inherent uncertainty in investing. While the simulations are optimistic, they also serve as a reminder that past performance is not indicative of future results, and investors should prepare for various scenarios.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no positions in cash, bonds, or alternative investments. This allocation supports the portfolio's growth objectives but also increases its vulnerability to market downturns. Diversifying across different asset classes can help mitigate risk and smooth out returns over time.
Sectors
- Technology 35%
- Financials 13%
- Consumer Discretionary 11%
- Telecommunications 10%
- Health Care 9%
- Industrials 8%
- Consumer Staples 4%
- Energy 3%
- Basic Materials 2%
- Real Estate 2%
- Utilities 2%
Sector allocation is heavily skewed towards technology, which accounts for 35% of the portfolio. Financial services, consumer cyclicals, and communication services also have significant representations. This sector concentration may enhance returns during bull markets but can lead to increased volatility and risk, particularly if tech stocks face downturns.
Regions
- North America 90%
- Europe Developed 4%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 1%
Geographic allocation is predominantly in North America (90%), with minimal exposure to international markets. This concentration benefits from the robust performance of the US market but limits potential gains from global diversification. Expanding into more developed and emerging markets could reduce geographic risk and tap into growth opportunities outside the US.
Market capitalization
- Mega-cap 47%
- Large-cap 27%
- Mid-cap 15%
- Small-cap 7%
- Micro-cap 3%
The portfolio's market capitalization exposure leans heavily towards mega and big-cap stocks, which comprise 74% of the allocation. This focus on larger companies may provide stability but at the expense of the higher growth potential offered by smaller companies. Including more medium, small, and micro-cap stocks could enhance growth prospects and diversification.
Redundant positions
-
High correlationVanguard S&P 500 ETFSchwab U.S. Large-Cap Growth ETF
The high correlation between the Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF indicates overlapping holdings that may not provide the intended diversification benefits. Reducing exposure to similar assets can help achieve a more diversified and resilient portfolio, especially during market downturns.
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.
Optimizing the portfolio involves addressing the high correlation between certain assets to improve diversification. By reallocating funds from overlapping investments to underrepresented sectors, regions, or asset classes, the portfolio can achieve a better balance between risk and return. This process should aim to maintain the portfolio's growth orientation while enhancing its resilience to market fluctuations.
Dividends
- Schwab U.S. Small-Cap ETF 1.50%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.15%
The portfolio's average dividend yield is 1.15%, with the Vanguard Total International Stock Index Fund ETF Shares offering the highest yield at 2.80%. While dividends contribute to total returns, the portfolio's focus on growth over income is evident in its relatively low overall yield. Investors seeking income might consider a higher allocation to assets with substantial dividend yields.
Ongoing product costs
- Schwab U.S. Small-Cap ETF 0.04%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
The portfolio benefits from low costs, with a total expense ratio (TER) of 0.04%. Keeping investment costs low is crucial for enhancing long-term returns, as fees can significantly erode profits over time. This focus on cost-efficiency is a strong aspect of the portfolio's construction.
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