A growth-focused portfolio with strong U.S. exposure and moderate risk profile

Report created on Feb 25, 2025

Risk profile Info

5/7
Growth
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Diversification profile Info

4/5
Broadly Diversified
← Less diversification More diversification →

Positions

This portfolio is heavily weighted towards equities, with a dominant 60% allocation to the Vanguard S&P 500 ETF. The remaining assets are spread across international stocks and small-cap value equities. Such a composition leans towards growth, with a focus on large-cap U.S. equities. Compared to a typical benchmark, this portfolio is U.S.-centric, potentially limiting global diversification. To enhance diversification, consider incorporating more varied asset classes, such as bonds or alternative investments, which could provide stability during market volatility.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 14.78%, indicating robust growth potential. However, it also experienced a significant maximum drawdown of -34.95%, reflecting its vulnerability during market downturns. Compared to a typical benchmark, this performance is commendable for growth-focused investors. While past performance does not guarantee future results, maintaining a diversified approach can help mitigate risks in volatile markets. Consider periodic rebalancing to ensure alignment with your risk tolerance and investment goals.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, indicates a wide range of potential portfolio values. With a 50th percentile outcome of 400% growth, the projections are optimistic. However, the 5th percentile suggests a 20% increase, highlighting potential risks. While simulations provide a glimpse into possible futures, they are not foolproof. Regularly reviewing your portfolio's alignment with your financial goals and risk tolerance can help navigate uncertainties. Adjusting allocations based on changing market conditions may enhance long-term outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks, comprising 99% of the total. This allocation aligns with a growth-oriented strategy but limits diversification benefits. Compared to a balanced benchmark, this portfolio could benefit from increased exposure to fixed-income or alternative assets. Diversifying across asset classes can reduce volatility and provide a cushion during market downturns. Consider gradually introducing bonds or other asset classes to achieve a more balanced risk-return profile.

Sectors Info

  • Technology
    25%
  • Financials
    17%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation reveals a notable concentration in technology, comprising 25% of the portfolio, followed by financial services at 17%. This tech-heavy focus may lead to higher volatility, especially during interest rate hikes or market corrections. Compared to common benchmarks, there is a moderate sectoral balance, yet overexposure to specific sectors can increase risk. Regularly reviewing sector allocations and adjusting as necessary can help maintain diversification and manage sector-specific risks effectively.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The portfolio's geographic allocation is predominantly North American, with 81% exposure. This heavy U.S. focus may limit global diversification benefits. Compared to a global benchmark, the portfolio underweights emerging markets and other regions. Expanding geographic diversification can mitigate region-specific risks and capture growth opportunities abroad. Consider increasing exposure to international markets, particularly in emerging economies, to enhance diversification and potential returns.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    7%
  • Micro-cap
    5%

The portfolio's market capitalization distribution is well-spread, with a focus on mega and big-cap stocks, comprising 70% of the allocation. This balance provides stability and growth potential but may limit exposure to smaller, high-growth companies. Compared to a typical benchmark, the allocation is relatively balanced. To capture more growth opportunities, consider increasing exposure to small and micro-cap stocks, which can offer higher returns albeit with increased risk.

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 can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio based on current assets. This optimization focuses on reallocating existing investments to achieve maximum efficiency. While the current allocation aligns with growth objectives, periodic adjustments can enhance returns. Consider using optimization tools to explore potential allocation changes that improve risk-adjusted returns. Regularly revisiting this strategy ensures ongoing alignment with your investment goals.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.88%

The portfolio offers a reasonable dividend yield of 1.88%, with the Schwab U.S. Dividend Equity ETF contributing significantly at 3.50%. Dividends provide a steady income stream, especially beneficial in volatile markets. Compared to growth-focused portfolios, this yield is moderate. For income-focused investors, increasing dividend-paying assets could enhance returns. Consider balancing growth and income by adjusting allocations towards higher-yielding investments, ensuring alignment with your financial goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, supporting better long-term performance by minimizing costs. Low fees enhance net returns, especially over extended periods. Compared to industry averages, this TER is highly competitive. Maintaining low costs is crucial for maximizing returns. Regularly reviewing and optimizing fund selections can help sustain cost efficiency. Consider evaluating alternative funds with similar objectives but lower fees to further reduce expenses.

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