Growth-focused portfolio with high exposure to US equities and technology sector

Report created on Jun 9, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is evenly split between the Vanguard Russell 1000 Growth Index Fund ETF Shares and the Vanguard S&P 500 ETF, indicating a strong focus on U.S. equities. Both ETFs are heavily invested in the technology sector, which, while offering growth potential, also increases the portfolio's exposure to sector-specific risks. The lack of international and asset class diversification could limit opportunities for risk mitigation through geographic and asset-type variance.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 15.69%, with a significant drawdown of -32.77%. This performance suggests a high growth potential but comes with considerable volatility. The days contributing most to returns indicate that gains are concentrated in short periods, underscoring the importance of staying invested through market cycles to capture these spikes.

Projection Info

Monte Carlo simulations, using historical data to project future outcomes, show a wide range of potential portfolio values. The 50th percentile outcome suggests substantial growth potential, but the wide spread between the 5th and 67th percentiles highlights the inherent uncertainty and risk in these projections. It's crucial to understand that these simulations are based on past data, which is not a guarantee of future performance.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no presence in bonds, commodities, or alternative investments. This single-asset class focus enhances the portfolio's growth potential but also increases its susceptibility to market volatility. Diversifying across different asset classes can provide a buffer against stock market downturns and reduce overall portfolio risk.

Sectors Info

  • Technology
    40%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Financials
    11%
  • Health Care
    9%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    2%
  • Real Estate
    1%
  • Utilities
    1%
  • Basic Materials
    1%

The sector allocation is heavily weighted towards technology, followed by consumer cyclicals, communication services, and financial services. This concentration in high-growth sectors can lead to higher volatility, especially during market corrections or when these sectors underperform. Diversifying across a broader range of sectors could help stabilize returns over the long term.

Regions Info

  • North America
    100%

The portfolio's geographic allocation is solely focused on North America, missing out on potential growth opportunities and diversification benefits from developed and emerging markets outside the U.S. International exposure could reduce the portfolio's vulnerability to U.S.-specific economic downturns and provide access to faster-growing economies.

Market capitalization Info

  • Mega-cap
    57%
  • Large-cap
    28%
  • Mid-cap
    14%
  • Small-cap
    1%

With a majority of assets in mega and big-cap stocks, the portfolio is positioned for stability and growth potential offered by large, established companies. However, the minimal exposure to medium, small, and micro-cap stocks limits the portfolio's ability to capitalize on the higher growth rates these smaller companies can offer.

Redundant positions Info

  • Vanguard Russell 1000 Growth Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard Russell 1000 Growth Index Fund ETF Shares and the Vanguard S&P 500 ETF indicates overlapping holdings, which reduces the diversification benefits within the portfolio. Diversifying into assets with lower correlation can enhance risk-adjusted returns by spreading risk across different investment types and sectors.

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 this portfolio involves addressing its high correlation and low diversification. By reallocating funds to less correlated assets or those in different asset classes or geographies, the portfolio can achieve a more favorable risk-return profile. This approach aligns with the Efficient Frontier concept, aiming to maximize returns for a given level of risk.

Dividends Info

  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.50%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 0.90%

The portfolio's dividend yield stands at 0.90%, a blend of the yields from both ETFs. This yield contributes to the portfolio's total return, providing a source of income in addition to capital gains. However, the focus on growth-oriented stocks typically results in a lower yield compared to portfolios with a higher allocation to value or high-dividend stocks.

Ongoing product costs Info

  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.06%. Lower costs contribute to higher net returns over time, making this an efficient portfolio from a cost perspective. It's important to maintain this focus on cost efficiency when considering any portfolio adjustments.

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