A focused investment strategy with 100% allocation in Vanguard S&P 500 Index ETF

Report created on May 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is entirely invested in the Vanguard S&P 500 Index ETF, which tracks the performance of the S&P 500 Index, comprising 500 of the largest U.S. companies. The single-asset class exposure to U.S. equity offers simplicity but comes with low diversification. This concentration in one geographic region and market segment (large-cap U.S. equities) does not spread risk across different asset classes or global markets, which is typically recommended for balanced risk profiles.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.30% with a maximum drawdown of -27.43%. These figures indicate strong growth potential but also significant volatility, as evidenced by the maximum drawdown. The days contributing to 90% of returns number just 33, highlighting how short periods of high returns have disproportionately influenced overall performance. This underscores the importance of a long-term investment horizon to weather volatility.

Projection Info

Monte Carlo simulations, using 1,000 iterations, project a wide range of potential outcomes, from a 118.0% increase in the 5th percentile to a 741.8% increase in the 67th percentile. This suggests a high degree of uncertainty in future returns, with a substantial portion of simulations forecasting positive growth. However, it's crucial to note that these projections are based on historical data, and past performance is not indicative of future results.

Asset classes Info

  • US Equity
    100%

The portfolio's allocation is solely in U.S. equity, providing exposure to a broad spectrum of sectors within the American economy. While this concentration in one asset class simplifies the investment strategy, it lacks diversification across different types of assets, such as bonds or international stocks, which could reduce risk and potentially stabilize returns over various market conditions.

Sectors Info

  • Technology
    31%
  • Financials
    14%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%
  • Basic Materials
    2%

Sector allocation closely mirrors the S&P 500's composition, with significant weightings in Technology, Financial Services, and Healthcare. This sector distribution reflects the current economic landscape of the U.S. However, the heavy emphasis on technology (31%) could expose the portfolio to sector-specific risks, such as regulatory changes or rapid market shifts.

Regions Info

  • North America
    99%

Geographically, the portfolio is almost exclusively invested in North American equities (99%), offering little to no exposure to developed or emerging markets outside of this region. This geographic concentration in a single market increases susceptibility to regional economic downturns and misses out on potential growth opportunities in international markets.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization breakdown—46% mega, 34% big, 18% medium, and 1% small—indicates a strong leaning towards larger companies. While this may offer stability and lower volatility compared to smaller companies, it potentially limits higher growth opportunities that smaller caps can provide.

Dividends Info

  • Vanguard S&P 500 Index ETF 1.10%
  • Weighted yield (per year) 1.10%

The Vanguard S&P 500 Index ETF's dividend yield of 1.10% contributes to the portfolio's total return, providing a steady income stream in addition to potential capital gains. However, the yield is relatively modest, emphasizing the portfolio's focus on growth through price appreciation.

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