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

Report created on Jul 21, 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 weighted towards US equities, with a significant concentration in the Vanguard S&P 500 ETF, making up 60% of the portfolio. This is complemented by allocations to the Schwab U.S. Large-Cap Growth ETF and smaller positions in the Avantis® U.S. Small Cap Value ETF and Vanguard Mid-Cap Index Fund ETF Shares. The portfolio's composition reflects a growth-oriented strategy, focusing on large-cap and growth stocks, but it shows a lack of international exposure and asset class diversification.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 17.36%, with a maximum drawdown of -35.28%. These figures indicate strong performance but also suggest a high level of volatility and risk, as evidenced by the significant drawdown. The days contributing to 90% of returns number just 18, highlighting the portfolio's reliance on short-term gains, which can be risky for long-term investors.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median annualized return of 19.05%, suggesting potential for high returns. However, the wide spread between the 5th and 67th percentiles indicates a significant risk of volatility. These projections, while useful, are based on historical data and cannot guarantee future performance. They serve as a reminder of the inherent uncertainties in investing.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, with no allocation to other asset classes such as bonds or real estate. This lack of diversification can increase risk, especially during market downturns when stocks tend to decline in value. Diversifying across different asset classes can help smooth out returns over time and reduce volatility.

Sectors Info

  • Technology
    32%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Industrials
    9%
  • Health Care
    9%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is heavily skewed towards technology, financial services, and consumer cyclicals, which are sectors that can offer high growth but also come with high volatility. The underrepresentation of defensive sectors like utilities and consumer defensive could make the portfolio more susceptible to market swings. Balancing growth-oriented sectors with defensive ones could provide more stability.

Regions Info

  • North America
    99%

The portfolio's geographic allocation is almost entirely focused on North America, with no exposure to international markets. This concentration increases vulnerability to region-specific economic downturns and misses out on potential growth opportunities in emerging and developed markets outside the US.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    26%
  • Mid-cap
    22%
  • Small-cap
    5%
  • Micro-cap
    5%

The market capitalization breakdown shows a preference for mega and big-cap stocks, which tend to be more stable but might offer lower growth potential compared to smaller companies. The small and micro-cap allocations could provide growth opportunities but also add to the portfolio's risk.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Mid-Cap Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the Vanguard S&P 500 ETF, Schwab U.S. Large-Cap Growth ETF, and Vanguard Mid-Cap Index Fund ETF Shares suggests redundancy in the portfolio, limiting diversification benefits. Reducing overlap by reallocating investments could help in achieving a better risk-adjusted return 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.

Considering the Efficient Frontier, this portfolio could be optimized by reducing the overlap in highly correlated assets and introducing non-correlated assets to improve diversification. This approach aims to achieve the most efficient risk-return trade-off, enhancing the portfolio's performance potential without necessarily increasing risk.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Mid-Cap Index Fund ETF Shares 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.12%

The portfolio's dividend yield stands at 1.12%, contributing to its total return. While not the primary focus of a growth-oriented strategy, dividends provide a source of passive income and can offer some cushion during market downturns.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Mid-Cap Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.06%

With a total expense ratio (TER) of 0.06%, the portfolio benefits from low costs, which is commendable. Lower costs contribute to higher net returns over time, an important factor in long-term investment success.

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