A growth-focused portfolio with strong domestic emphasis and limited international diversification

Report created on Dec 14, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of three ETFs, with the Vanguard S&P 500 ETF making up 60% of the allocation, indicating a strong focus on large-cap U.S. equities. The Avantis U.S. Small Cap Value ETF accounts for 20%, adding exposure to smaller, potentially higher-growth domestic companies. The remaining 20% is allocated to the Vanguard Total International Stock Index Fund, providing some global diversification. This composition suggests a preference for domestic growth while maintaining a moderate level of international exposure. To enhance diversification, consider adding more asset classes or increasing exposure to non-U.S. markets.

Growth Info

Historically, the portfolio has delivered a robust compound annual growth rate (CAGR) of 15.97%, reflecting strong past performance. However, it has also experienced a significant maximum drawdown of -36.31%, indicating vulnerability during market downturns. This highlights the importance of understanding market volatility and its impact on long-term performance. While past performance can offer insights, it does not guarantee future results. To manage risk, consider strategies like rebalancing or incorporating assets with lower volatility.

Projection Info

Using Monte Carlo simulations, this portfolio's future performance was projected with 1,000 iterations. The median outcome suggests a potential 491.86% return, while the 5th percentile indicates a 45.85% return, highlighting uncertainty in future gains. Monte Carlo simulations use historical data to estimate a range of possible outcomes, illustrating the variability of future performance. Although useful, these projections are not foolproof and should be considered alongside other analyses. To prepare for different scenarios, regularly review and adjust your portfolio based on market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.62% of the allocation in equities, and a negligible amount in cash and other assets. This high equity concentration suggests a focus on growth, but it also increases exposure to market volatility. Diversification across asset classes can help mitigate risk and improve stability. Consider incorporating fixed-income or alternative assets to balance the portfolio and reduce potential drawdowns during market downturns.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Energy
    6%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation reveals a significant concentration in Technology (23.68%), Financial Services (17.70%), and Consumer Cyclicals (11.47%). While these sectors have driven growth, they also introduce sector-specific risks. A balanced sector allocation can enhance diversification and reduce exposure to sector downturns. To achieve this, consider adjusting allocations to underrepresented sectors like Utilities or Real Estate, which can provide stability and income during volatile periods.

Regions Info

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

The portfolio is predominantly focused on North America, with 80.77% of the allocation, limiting global diversification. While this aligns with the portfolio's growth focus, it also increases vulnerability to regional economic fluctuations. Geographic diversification can help mitigate these risks and capture growth opportunities in other regions. Consider increasing exposure to emerging markets or other developed regions to enhance global diversification and potentially improve risk-adjusted returns.

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 current portfolio can potentially be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio by adjusting asset allocations. This involves reallocating between existing holdings to balance risk and return more effectively. While optimization can enhance efficiency, it should align with individual risk tolerance and goals. Regularly review the portfolio and make necessary adjustments to maintain optimal performance in changing market conditions.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.62%

The portfolio's dividend yield stands at 1.62%, with the Vanguard Total International Stock Index Fund contributing a higher yield of 3.0%. While dividends provide a steady income stream, they play a minor role in this growth-focused portfolio. To enhance income without sacrificing growth, consider increasing exposure to dividend-paying stocks or funds. This can improve cash flow and provide a buffer during market downturns, supporting long-term wealth accumulation.

Ongoing product costs Info

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

The portfolio's total expense ratio (TER) is 0.08%, reflecting low management fees. This cost efficiency is beneficial for long-term returns, as lower fees mean more capital remains invested. However, it's crucial to regularly review and compare fees with similar funds to ensure competitiveness. Consider exploring alternative funds with lower fees or similar costs but better performance to maximize returns without increasing expenses.

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