A growth-focused portfolio with heavy reliance on US large-cap equities and low diversification

Report created on Jun 8, 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 heavily weighted toward US large-cap equities, with a 100% allocation to stocks and no exposure to other asset classes or international markets. The composition is split among three ETFs: 40% in Schwab U.S. Dividend Equity ETF, 40% in Schwab U.S. Large-Cap Growth ETF, and 20% in Vanguard S&P 500 ETF. This allocation reflects a strong bias towards growth-oriented investment strategies, yet it exhibits low diversity both in terms of asset classes and geographic exposure.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.41%, with a significant maximum drawdown of -32.84%. These numbers suggest a high-growth trajectory, albeit with considerable volatility. The days contributing to 90% of returns being limited to 31 indicate that the portfolio's performance heavily depends on short, strong market rallies, a characteristic common in growth-focused investments.

Projection Info

Monte Carlo simulations, based on historical data, project a wide range of outcomes for this portfolio. With 996 out of 1,000 simulations showing positive returns, the median projected growth is impressive. However, the reliance on historical data in these simulations means future market changes, not reflected in past trends, could impact actual performance differently. Such projections should be seen as one of many tools in assessing potential future performance, not a guarantee.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks, without diversification into other asset classes like bonds or real estate, positions it for higher potential returns but also exposes it to greater market volatility. This single-asset class approach simplifies the investment strategy but does not capitalize on the risk-reducing benefits of broader diversification.

Sectors Info

  • Technology
    30%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Consumer Staples
    10%
  • Financials
    9%
  • Telecommunications
    9%
  • Energy
    9%
  • Industrials
    8%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation shows a heavy emphasis on technology, healthcare, and consumer cyclicals, which are sectors often associated with growth strategies. However, the concentration in these sectors, especially technology, increases susceptibility to sector-specific risks. Diversifying across a broader range of sectors could mitigate some of this risk.

Regions Info

  • North America
    100%

The portfolio's geographic allocation is entirely focused on North America, lacking exposure to international markets. This concentration in a single region can limit opportunities for global diversification and reduce the portfolio's ability to capitalize on growth in emerging and developed markets outside the US.

Market capitalization Info

  • Large-cap
    37%
  • Mega-cap
    37%
  • Mid-cap
    22%
  • Small-cap
    3%
  • Micro-cap
    1%

The balance between big, mega, and medium market capitalization indicates a focus on established companies with a smaller portion allocated to smaller cap stocks. This composition supports the portfolio's growth orientation but may limit potential gains from high-growth small and micro-cap investments.

Redundant positions Info

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

The high correlation between the Schwab U.S. Large-Cap Growth ETF and the Vanguard S&P 500 ETF suggests redundancy in the portfolio, diminishing the diversification benefits. Reducing overlap by reallocating assets could enhance portfolio efficiency without significantly altering the 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.

Optimizing this portfolio involves addressing the high correlation between assets to improve diversification benefits. By reallocating investments to reduce overlap, the portfolio can achieve a more efficient risk-return profile, potentially moving closer to the Efficient Frontier, where each unit of risk is optimized for maximum return.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 4.00%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 2.02%

The dividend yield across the portfolio averages to 2.02%, with the Schwab U.S. Dividend Equity ETF contributing significantly to this figure. While dividends provide a stream of income, the focus on growth ETFs means this portfolio prioritizes capital appreciation over income generation.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low total expense ratios (TER), averaging 0.05%, which is favorable for long-term growth by minimizing cost drag on returns. Keeping investment costs low is a critical component of maximizing net returns, especially in a growth-focused strategy.

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