Concentrated US equity allocation with moderate diversification and efficient but improvable risk return balance
Report created on Jun 1, 2024Risk profile
4/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
AV American Century ETF Trust
AVNV - US0250721661 20.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 10.00%
The structure is very straightforward: three US-focused equity ETFs, with 70% in a broad large‑cap index, 20% in a more income‑tilted fund, and 10% in small cap value. This creates a pure stock portfolio with a clear tilt toward the US and larger companies while still leaving space for smaller, cheaper names. Having a simple lineup like this makes it easier to understand what is driving results, monitor risk, and avoid overlap from many similar funds. The big takeaway is that this is an equity-only, US‑centric setup that relies heavily on stock market growth, so short‑term ups and downs should be expected and accepted as part of the strategy.
Growth
Over the last few years, $1,000 grew to about $1,529, with a 16.8% compound annual growth rate (CAGR). CAGR is like your “average speed” over the whole journey, smoothing out bumps along the way. This result slightly beat both the US market and the global market, while experiencing a max drawdown of about ‑17.5%, which is the largest peak‑to‑trough drop in the period. That’s a bit less severe than the US reference index. Only 17 days made up 90% of returns, showing that missing a few strong days could matter a lot. Past performance is encouraging here but can’t be assumed to repeat.
Asset classes
- Stocks 100%
All assets are in stocks, with no bonds, cash, or alternatives. That 100% equity stance is the main reason for both the strong performance potential and the larger swings along the way. Stocks have historically offered higher long‑term growth than bonds, but with sharper drawdowns during market stress. For a “balanced investor” risk score, this is actually an aggressive implementation because there’s no buffer from fixed income. The upside is maximum participation in equity growth; the trade‑off is having fewer defensive levers if markets fall. The main takeaway is that staying comfortable through volatility is essential for this kind of all‑stock approach.
Sectors
- Technology 25%
- Financials 16%
- Consumer Discretionary 11%
- Industrials 11%
- Telecommunications 9%
- Health Care 8%
- Energy 7%
- Consumer Staples 5%
- Basic Materials 5%
- Utilities 2%
- Real Estate 2%
Sector exposure is led by technology at about 25%, followed by financials, consumer discretionary, and industrials. The overall mix still spans every major sector, from energy to utilities and real estate, which is a nice sign of broad diversification. Tech is meaningfully present but not overwhelmingly dominant, which helps balance growth potential with cyclicality and defensiveness from other areas. In environments with rising interest rates or pressure on growth stocks, tech‑heavy allocations can be choppier. Here, the spread across sectors is well‑balanced and aligns closely with broad market standards, which helps smooth returns compared with a more narrowly focused sector bet.
Regions
- North America 81%
- Europe Developed 7%
- Japan 3%
- Asia Developed 3%
- Asia Emerging 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio leans heavily toward North America at 81%, with relatively small slices in Europe, Japan, and other regions. That’s a stronger US tilt than global benchmarks, which usually have lower US weight and more non‑US developed and emerging exposure. The benefit is riding US market strength when it leads, as it has for much of the last decade. The trade‑off is higher vulnerability if the US underperforms other regions or faces country‑specific shocks. For investors who want broader global balance, adding more international exposure can reduce reliance on one economy, while still keeping the US as a core anchor.
Market capitalization
- Mega-cap 37%
- Large-cap 30%
- Mid-cap 19%
- Small-cap 8%
- Micro-cap 5%
Market cap exposure is skewed to larger companies, with 37% in mega‑caps and 30% in large‑caps, plus a meaningful 32% combined in mid, small, and micro caps. This is a positive sign: the portfolio captures the stability and liquidity of big names while leaving room for smaller companies, which historically can offer higher long‑term growth but also more volatility. The dedicated small‑cap value ETF reinforces this diversification. Compared with a pure large‑cap index, this structure should behave slightly differently across cycles, sometimes lagging when mega‑caps dominate and helping when smaller or cheaper stocks come back into favor.
True holdings
-
NV NVIDIA Corporation 5.12%
Part of fund(s):- Vanguard S&P 500 ETF
-
AA Apple Inc 4.65%
Part of fund(s):- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 3.47%
Part of fund(s):- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 2.43%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 2.16%
Part of fund(s):- Vanguard S&P 500 ETF
-
AV Broadcom Inc 1.80%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 1.72%
Part of fund(s):- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 1.68%
Part of fund(s):- Vanguard S&P 500 ETF
-
TS Tesla Inc 1.34%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
-
BR Berkshire Hathaway Inc 1.10%
Part of fund(s):- Vanguard S&P 500 ETF
- Top 10 total 25.47%
Looking through the ETFs, the biggest underlying exposures are familiar mega‑cap names like NVIDIA, Apple, Microsoft, and Amazon, plus other large US growth companies. Several appear in multiple funds, which quietly increases concentration even though there are only three ETFs. This “hidden overlap” means a chunk of risk is tied to a relatively small set of big companies, especially in US growth and tech‑related areas. Because only top‑10 ETF holdings are captured, actual overlap is likely higher. The main takeaway is that headline diversification by number of ETFs is decent, but underlying company exposure is more concentrated than it first appears.
Factors
Factor exposures are essentially neutral across value, size, momentum, quality, yield, and low volatility. Factor exposure describes how much a portfolio leans into traits like cheapness, trend, or stability that research links to returns. Here, all readings hover near the 50% “market‑like” level, meaning there’s no strong tilt toward or away from any specific factor. The advantage is that performance should broadly resemble the overall market rather than betting heavily on a single style. The flip side is there’s no deliberate factor edge being pursued. This well‑balanced factor profile matches a core, diversified equity approach without big style swings.
Risk contribution
-
Vanguard S&P 500 ETF
Weight: 70.00% 71.2% -
American Century ETF Trust
Weight: 20.00% 16.6% -
Avantis® U.S. Small Cap Value ETF
Weight: 10.00% 12.2%
Risk contribution shows how much each holding adds to overall ups and downs, which can differ from its weight. The Vanguard S&P 500 ETF is 70% of the portfolio but contributes about 71% of the risk, so it’s very much the main driver. The small‑cap value ETF is only 10% by weight but contributes over 12% of risk, reflecting its bumpier nature; that’s a classic case where a small slice still has an outsized impact. This is not inherently bad, just something to be intentional about. Adjusting position sizes over time can help align each holding’s risk impact with comfort levels.
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 1.02, meaning it delivers decent return per unit of volatility. The efficient frontier shows that, using only these same holdings, different weightings could reach a Sharpe up to 1.28 with similar or slightly lower risk. Being about 2.6 percentage points below the frontier at the current risk level suggests there’s room to improve efficiency just by reweighting, without adding new funds. The minimum‑variance and max‑Sharpe mixes both offer higher expected return with lower or similar risk, so a more optimized allocation within the same three ETFs could enhance the trade‑off.
Dividends
- American Century ETF Trust 3.20%
- Avantis® U.S. Small Cap Value ETF 1.40%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.62%
The overall dividend yield is about 1.62%, with the American Century ETF providing the highest yield at around 3.2%. Dividends are the cash payments companies make to shareholders and can be a meaningful part of long‑term returns, especially when reinvested. In this portfolio, income is present but not dominant; growth and capital appreciation are the main drivers. For someone focused on accumulation rather than current income, this level is sensible and keeps flexibility. If a higher cash payout were desired in the future, shifting more weight toward income‑oriented strategies could increase yield, though often at the cost of pure growth exposure.
Ongoing product costs
- American Century ETF Trust 0.34%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.11%
Total ongoing fund costs (TER) average a very low 0.11%, driven by the ultra‑cheap Vanguard S&P 500 ETF at 0.03% and reasonably priced satellite funds. The TER is the annual fee charged by the ETFs, taken from fund assets, and it quietly compounds over time. Keeping this number low is one of the most reliable ways to improve long‑term outcomes because every dollar not spent on fees stays invested. These costs are impressively low and support better long‑term performance. From a cost perspective, this setup is already in a very strong place, and there’s little pressure to optimize further.
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