Growth-focused portfolio with heavy reliance on US stocks and low diversification

Report created on Jul 11, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily skewed towards two ETFs: the Vanguard S&P 500 ETF, which comprises 60% of the portfolio, and the Avantis® U.S. Small Cap Value ETF, making up the remaining 40%. This allocation indicates a strong focus on the US stock market, with a preference for a mix of large-cap and small-cap value stocks. The concentration in just two ETFs, both from the stock asset class, contributes to the portfolio's low diversification score. While such a structure can offer significant growth potential, it also exposes the investor to higher volatility and sector-specific risks.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 16.94%, with a maximum drawdown of -38.98%. These figures suggest robust growth but also highlight periods of substantial volatility. The days that contribute to 90% of returns being concentrated in just 16.0 days further emphasizes the portfolio's susceptibility to sharp, short-term market movements. This performance pattern aligns with the growth profile but requires an investor comfortable with significant fluctuations in portfolio value.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes, with key percentiles showing a 5th percentile at a 52.0% increase and a 67th percentile at a 987.7% increase in value. The high number of simulations with positive returns (978 out of 1,000) and an average annualized return of 18.08% suggest a strong growth trajectory. However, the broad range between the lower and upper percentiles underscores the high risk and uncertainty inherent in this portfolio's strategy.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no diversification into other asset classes such as bonds or real estate. This singular focus on equities maximizes growth potential but also increases risk, particularly during market downturns. Diversifying across different asset classes can help mitigate this risk by providing more stable returns during volatile periods.

Sectors Info

  • Technology
    22%
  • Financials
    20%
  • Consumer Discretionary
    13%
  • Industrials
    11%
  • Energy
    7%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation is spread across technology (22%), financial services (20%), and consumer cyclicals (13%), among others. This sector distribution reflects a balance between high-growth areas and more stable, value-oriented segments. However, the heavy emphasis on technology and financial services sectors can lead to increased volatility, especially in market conditions unfavorable to these industries.

Regions Info

  • North America
    99%

With 99% of assets allocated in North America, the portfolio has a strong home bias, missing out on potential growth opportunities in developed and emerging markets outside the US. This geographic concentration can limit diversification benefits and increase exposure to region-specific risks, such as regulatory changes or economic downturns in the US market.

Market capitalization Info

  • Mega-cap
    28%
  • Large-cap
    21%
  • Micro-cap
    21%
  • Small-cap
    19%
  • Mid-cap
    11%

The market capitalization exposure includes a mix of mega (28%), big (21%), micro (21%), small (19%), and medium (11%) cap stocks. This blend allows for potential high growth from small and micro-cap stocks while maintaining some stability through investments in larger companies. However, the significant allocation to smaller companies, known for their higher volatility, aligns with the portfolio's growth-oriented risk profile.

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.

While the portfolio shows strong historical performance and growth potential, its risk-return profile could be optimized. Utilizing the Efficient Frontier concept, adjustments in asset allocation could potentially yield a higher return for the same level of risk, or the same return with reduced risk. This optimization would involve diversifying across more asset classes and geographies to reduce volatility and improve long-term performance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.40%

The portfolio's average dividend yield of 1.40% contributes to its total return, albeit modestly. While dividends provide a steady income stream, the focus here is clearly on capital appreciation rather than income generation. Investors should consider whether this balance between growth and income aligns with their financial goals and cash flow needs.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.12%

The Total Expense Ratio (TER) of 0.12% is impressively low, which is beneficial for long-term growth as it minimizes the drag on returns caused by fees. The Vanguard S&P 500 ETF's particularly low fee (0.03%) is noteworthy, helping to keep overall costs down despite the slightly higher fee of the Avantis® ETF (0.25%).

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