A broadly diversified low cost stock portfolio with strong growth tilt and moderate balance
Report created on Aug 11, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 50.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 30.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 10.00% -
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 10.00%
This portfolio is built almost entirely from broad stock index funds, with half in a total US market fund, a solid chunk in total international, and smaller tilts toward US dividend payers and US large growth. That creates a core-and-satellite structure: a broad, market-like base plus small style tilts. This matters because your overall behavior will still largely follow global stock markets, while the tilts slightly change income and growth characteristics. The overall setup is well-aligned with common benchmarks and “lazy portfolio” best practices, which is a real strength. If anything, the biggest tweak to consider is whether both growth and dividend tilts are needed on top of the already broad US fund.
Growth
Historically, this mix produced a compound annual growth rate (CAGR) of about 13.66%. CAGR is like your average speed on a long road trip, smoothing out ups and downs to show the typical yearly pace. A -34% max drawdown shows that in a severe downturn, the portfolio can fall by about a third, which is normal for an equity-heavy mix but still emotionally tough. The fact that 90% of returns came from just 33 days highlights how missing a few big days can seriously hurt results. While this history is strong and aligns well with broad equity benchmarks, it’s still just the past, not a guarantee of future outcomes.
Projection
The Monte Carlo analysis ran 1,000 simulated futures using patterns from historical data, mixing random return paths to show a range of outcomes. Think of it as rolling the dice many times with realistic odds rather than predicting one exact future. The 5th percentile ending value near 92.6% suggests that in a very rough scenario, values might be roughly flat over the period, while the median around 512% and higher percentiles show strong potential growth. The very high share of positive simulations and a 15.32% average simulated return are encouraging, but simulation relies on past behavior and assumptions, so it can understate new risks or regime changes.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio is 99% in stocks with only about 1% in cash, and effectively nothing in bonds or alternatives. Asset classes are simply broad buckets like stocks, bonds, and real estate, and they often react differently to economic news. Being almost all in stocks maximizes long-term growth potential but raises short-term volatility: big swings up and down become more likely. Compared with many “balanced” benchmarks that might hold 40% or more in bonds, this is more growth-oriented. This setup is great for long horizons and strong risk tolerance, but anyone needing steadier values could think about adding more defensive assets instead of only adjusting within equities.
Sectors
- Technology 27%
- Financials 15%
- Consumer Discretionary 11%
- Industrials 11%
- Health Care 10%
- Telecommunications 9%
- Consumer Staples 6%
- Energy 5%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Sector-wise, the portfolio is nicely spread across all major economic areas, with technology largest at 27%, followed by financials, consumer, industrials, and healthcare. This is very similar to broad market benchmarks and is a strong indicator of healthy diversification. Tech-heavy allocations can see bigger moves when interest rates change or when growth expectations shift, so there may be some extra sensitivity there, but the presence of financials, industrials, defensives, and others helps balance that risk. Overall, the sector mix is well-balanced and aligns closely with global standards, so there’s no pressing need for big changes unless there’s a deliberate desire to tilt toward or away from specific economic themes.
Regions
- North America 72%
- Europe Developed 11%
- Asia Emerging 5%
- Japan 5%
- Asia Developed 4%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, about 72% is in North America with the rest spread across Europe, Asia, Japan, and smaller allocations to emerging regions. This looks very similar to a global market-cap benchmark, where US and North America naturally dominate because those markets are huge. That’s a positive alignment: it captures global opportunity while recognizing the size and depth of US markets. The modest exposure to emerging regions offers some diversification and growth potential without overwhelming the portfolio. If someone wanted to lean more heavily into non-US markets, they could increase the share of international holdings, but as it stands, the global spread is broadly diversified and quite reasonable for a US-based investor.
Market capitalization
- Mega-cap 41%
- Large-cap 33%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 1%
The market cap exposure is heavily tilted toward mega and large companies, with smaller slices in mid, small, and micro caps. Market capitalization is just company size; big firms tend to be more stable and widely followed, while small ones can be more volatile but sometimes faster-growing. This pattern matches most broad equity benchmarks and keeps portfolio behavior fairly close to standard global indices, which is a plus for predictability and simplicity. The 20% or so in smaller companies still adds some diversification and growth spice. If there’s ever a desire for more “small-cap premium,” that would mean nudging exposure to smaller firms higher, but it’s not a necessity here.
Redundant positions
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High correlationSchwab U.S. Large-Cap Growth ETFVanguard Total Stock Market Index Fund ETF Shares
The high correlation between the US large-cap growth ETF and the total US market ETF means they tend to move almost in lockstep. Correlation is a score from -1 to 1 showing how similarly two assets move; when it’s high, you’re essentially doubling down on the same pattern rather than spreading risk. That growth ETF tilt mostly adds concentration in the same big US growth names already present in the total market fund. Because of this, it may not add much diversification benefit. Trimming or simplifying overlapping exposures can keep things cleaner and still maintain the same overall risk level, while freeing room for assets that behave more differently.
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.
From a risk–return angle, this portfolio could likely sit close to the Efficient Frontier. The Efficient Frontier is the set of mixes that give the best possible tradeoff between expected return and volatility using the same building blocks. Here, optimization would focus only on shifting weights among the existing funds, not adding new assets. Because several components are highly correlated, especially the US growth tilt with the total US fund, there’s an opportunity to simplify while keeping similar expected returns. Efficiency doesn’t mean “perfect diversification” or matching any one benchmark; it just means getting as much expected return as reasonably possible for the level of risk taken.
Dividends
- Schwab U.S. Dividend Equity ETF 3.80%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard Total Stock Market Index Fund ETF Shares 1.10%
- Vanguard Total International Stock Index Fund ETF Shares 2.70%
- Weighted yield (per year) 1.78%
The total portfolio yield around 1.78% reflects a mix of a high-yield dividend ETF, moderate-yield international stocks, and lower-yield US growth stocks. Dividend yield is the yearly cash payout as a percentage of your investment, like “rent” paid by your shares. The dedicated dividend ETF at roughly 3.8% helps boost income above what a pure growth portfolio would provide, which can be useful for investors who like regular cash flows or want a smoother total return profile. Just keep in mind that chasing yield alone isn’t always best; total return (price changes plus dividends) still matters more than income level by itself over long periods.
Ongoing product costs
- Schwab U.S. Dividend Equity ETF 0.06%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
Total ongoing costs are impressively low at roughly 0.04% per year. These expense ratios are like a small annual “membership fee” charged by the funds, and here they’re far below the average for actively managed products. Over decades, even a 0.5%–1% difference in fees can add up to tens of thousands of dollars, so this cost structure strongly supports better long-term performance. The lineup already uses broad, low-cost index ETFs, which is absolutely on the right track. At this level, there’s limited room or need for further cost-cutting; any future tweaks should probably be driven by risk, simplicity, or goals, not by chasing slightly lower fees.
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