Two fund US stock portfolio with broad market exposure and efficient low cost structure
Report created on May 4, 2024Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 50.00%
The portfolio is extremely simple: two broad US stock ETFs split 50/50, leaving you 100% in equities. One fund tracks large US companies, while the other covers almost the entire US stock market, including mid and small caps. Structurally, this is basically a pure-stock “growth” setup with no bonds, cash, or alternatives. That matters because all your ups and downs come from one main engine: stocks. The clear upside is clarity and ease of management; the tradeoff is sharper swings when markets drop. As a general takeaway, this kind of setup fits investors who truly accept big temporary drops in exchange for long-term growth potential.
Growth
From 2016 to early 2026, $1,000 grew to about $3,593, a compound annual growth rate (CAGR) of 13.67%. CAGR is like the average speed of a road trip, smoothing out the bumps. This is very close to the broad US market’s 13.82% and comfortably ahead of the global market’s 11.30%. The worst peak-to-trough drop, or max drawdown, was -34.50%, similar to the reference markets. That confirms you’re getting classic equity-like volatility with benchmark-like returns. The main lesson: this setup has historically tracked the US market well, but past performance doesn’t guarantee future results, and similar drawdowns are very possible again.
Asset classes
- Stocks 100%
Asset class exposure is extremely concentrated: 100% in stocks. There is no built-in ballast from bonds, cash, or defensive assets that typically soften drawdowns. Being fully in equities usually boosts long‑term expected returns but also magnifies volatility, especially during recessions or market panics. Many diversified portfolios blend in some bonds to dampen swings and provide dry powder to rebalance after drops. The positive angle here is clarity: the portfolio is unapologetically growth-focused and tax‑efficient. The main takeaway is that time horizon and temperament need to match this all‑stock stance, since big short‑term losses should be considered a normal part of the journey.
Sectors
- Technology 32%
- Financials 12%
- Telecommunications 10%
- Health Care 10%
- Consumer Discretionary 10%
- Industrials 9%
- Consumer Staples 5%
- Energy 4%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector-wise, the portfolio leans heavily toward technology at about 32%, with the rest spread across financials, communication-related industries, health care, consumer areas, and smaller allocations elsewhere. This tech-tilt is broadly similar to major US indices today, so you’re aligned with how the market is currently structured rather than making a big active bet. That’s useful because sector weights naturally evolve as the economy changes. The flip side is that if tech stumbles—especially the largest names—your portfolio will feel it. As a general guideline, staying close to broad market sector weights, as you do here, is usually a solid indicator of diversified growth exposure.
Regions
- North America 99%
Geographically, exposure is almost entirely in North America, around 99%. That means company revenues, regulation, and currency exposure are highly tied to the US environment, even though many firms operate globally. A common global benchmark spreads more across multiple regions, creating a balance between different economic cycles and policy regimes. Being so US-focused has paid off over the last decade, but it also means more vulnerability if the US market underperforms other regions for a stretch. The main takeaway: the portfolio strongly expresses a “US is my home base” view; anyone wanting more resilience against country-specific shocks might consider whether additional non-US exposure fits their goals.
Market capitalization
- Mega-cap 43%
- Large-cap 33%
- Mid-cap 19%
- Small-cap 4%
- Micro-cap 1%
Market capitalization exposure is tilted toward mega and large caps, with 76% in those biggest companies and the rest in mid, small, and micro caps. This pattern closely mirrors the US market’s natural weighting, where giants dominate total value. Large caps tend to be more stable and widely researched, while mid and small caps can bring extra growth potential but also more volatility. Including some smaller companies, as you do through the total market fund, adds breadth without drifting far from market norms. The implication is that you’re not making an extreme size bet; you get a mostly large-cap ride with a modest booster from the smaller end.
True holdings
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NV NVIDIA Corporation 6.75%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 6.27%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 4.69%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 3.26%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 2.91%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 2.43%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 2.31%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 2.27%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
TS Tesla Inc 1.82%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
BR Berkshire Hathaway Inc 1.47%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 34.16%
Looking through the ETFs, a big chunk of risk is tied to a small group of mega-cap names: NVIDIA, Apple, Microsoft, Amazon, Alphabet, Broadcom, Meta, Tesla, and Berkshire dominate the visible exposure. Several of these appear in both ETFs, so there is hidden overlap even though you own only two funds. Overlap means your fortunes are more tied to these giants than the fund count suggests. Because only ETF top-10 holdings are included, total overlap is actually understated. The takeaway: while you own thousands of stocks on paper, market movements of a handful of very large companies still drive a noticeable share of your outcome.
Factors
Factor exposure is very balanced across value, size, momentum, quality, yield, and low volatility, all sitting close to neutral, or market‑like levels. Factors are like underlying “personality traits” of stocks that research has tied to long‑term returns. Since your tilts are mild to nonexistent, you’re basically accepting whatever factor mix the broad market delivers at any given time. That’s a strength if you don’t want to make specific bets on themes like deep value or high momentum. The key takeaway: behavior in different markets will likely resemble the overall market, without extreme outperformance or underperformance driven by any single factor style.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 50.00% 50.4% -
Vanguard S&P 500 ETF
Weight: 50.00% 49.6%
Risk contribution shows how much each holding drives overall volatility, which can differ from simple weight. Here, the two funds each weigh 50% and contribute almost exactly 50% of the risk, meaning the portfolio’s ups and downs are evenly split between them. Since both are diversified index funds, there’s no single “problem child” dominating risk. That’s a nice alignment and indicates clean position sizing. However, because the funds are highly similar, the real story is that overall risk is concentrated in the US equity market itself. The general lesson: risk feels well-balanced between positions, but not diversified across fundamentally different types of assets.
Redundant positions
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High correlationVanguard Total Stock Market Index Fund ETF SharesVanguard S&P 500 ETF
The two ETFs are effectively perfectly correlated, with a correlation of 1.0. Correlation measures how often two investments move together; 1.0 means they essentially dance in lockstep. That’s not harmful by itself, but it does mean owning both adds very little diversification benefit. You’re basically holding two slightly different lenses on the same US stock universe. In practice, this simplifies behavior: if US stocks are up, both will be up, and vice versa. The useful insight is that diversification here comes from the thousands of underlying companies, not from holding multiple distinct asset types or uncorrelated strategies.
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.
On the risk–return chart, your current mix sits right on or very near the efficient frontier, with a Sharpe ratio of 0.69 versus 0.76 for the optimal combination of the same two funds. The Sharpe ratio compares return to volatility, like judging how much reward you get per unit of stress. Because both the optimal and minimum-variance portfolios end up with the same mix and slightly better stats, it shows the existing allocation is already quite efficient. Reweighting between only these two would not materially change things. The key takeaway: from an optimization standpoint, the structure is already doing its job well for the chosen risk level.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Weighted yield (per year) 1.20%
The portfolio’s dividend yield sits around 1.20%, which is fairly typical for a broad US equity basket today. Dividends are the cash payments companies make to shareholders and can form an important part of total return over time, especially when reinvested. In this case, most of the expected growth likely comes from price appreciation rather than income. That aligns with a growth-minded equity strategy rather than an income-focused one. The main takeaway: this setup works better for compounding and long‑term wealth building than for someone who needs sizable regular cash flow from their investments right now.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.03%
Costs are impressively low, with both ETFs charging a total expense ratio (TER) of just 0.03%. TER is the ongoing annual fee the fund takes to cover management and operations. Low fees matter because they come off returns every single year; over decades, the difference between 0.03% and even 0.5% compounds into a meaningful dollar amount. Being this close to rock‑bottom cost is a major strength and directly supports better long‑term performance. The takeaway: from a fee perspective, this setup is already highly optimized, and there’s little to be gained by trying to shave expenses further.
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