A growth-focused portfolio with heavy S&P 500 exposure and international diversification

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio is best suited for an investor with a growth-oriented profile, comfortable with higher levels of risk for the chance of higher returns. Ideal for those with a long-term investment horizon, it caters to individuals who can withstand market volatility in pursuit of substantial capital appreciation. The investor likely values U.S. market performance but is open to some international exposure to diversify and capitalize on global opportunities.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    70.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    15.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    15.00%

The portfolio predominantly consists of the Vanguard S&P 500 ETF, making up 70% of the allocation, alongside the Avantis® U.S. Small Cap Value ETF and Vanguard Total International Stock Index Fund ETF Shares, each accounting for 15%. This structure suggests a strong tilt towards large-cap U.S. equities with a strategic diversification into international markets and U.S. small-cap sectors. The heavy reliance on a single ETF emphasizes confidence in the U.S. market's long-term growth potential but raises questions about over-concentration risks.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.48%, with a significant maximum drawdown of -35.60%. These figures indicate a high-growth trajectory, albeit with substantial volatility, as evidenced by the steep drawdown. The performance underscores the portfolio's aggressive growth stance, which has paid off in the past but also suggests potential vulnerability during market downturns.

Projection Info

Monte Carlo simulations, which use historical data to forecast various future scenarios, predict a wide range of outcomes for this portfolio. With 949 out of 1,000 simulations yielding positive returns, the median projection suggests a 392.8% growth. However, the presence of a small percentage of negative outcomes highlights the inherent uncertainties in investing, reminding investors of the risk-reward balance.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio's allocation is entirely in stocks, with no exposure to cash, bonds, or other asset classes. This singular focus on equities maximizes growth potential but also increases volatility and risk. Diversifying across different asset classes can provide a buffer against stock market fluctuations, potentially smoothing out returns over time.

Sectors Info

  • Technology
    25%
  • Financials
    18%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral distribution leans heavily towards technology and financial services, followed by consumer cyclicals and industrials. This concentration in high-growth sectors aligns with the portfolio's overall growth objective but may also amplify volatility, particularly in market corrections. A more balanced sectoral spread could mitigate some of this risk.

Regions Info

  • North America
    85%
  • Europe Developed
    6%
  • Asia Emerging
    3%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

With 85% of investments in North America, the portfolio has a strong domestic focus. The remaining 15% in international stocks, including developed Europe, emerging Asia, and other regions, provides some global exposure. However, the minimal allocation to emerging markets and certain developed regions might limit potential gains from global economic growth.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    28%
  • Mid-cap
    15%
  • Small-cap
    8%
  • Micro-cap
    7%

The market capitalization breakdown shows a preference for mega and big-cap stocks, which are perceived to be less risky than smaller companies. However, the inclusion of small and micro-cap stocks, mainly through the Avantis® U.S. Small Cap Value ETF, introduces growth potential and diversification benefits, albeit with higher volatility.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.90%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.72%

The dividend yields from the ETFs contribute to the portfolio's total yield of 1.72%, offering a modest income stream in addition to potential capital gains. This yield, while not the primary focus of a growth-oriented portfolio, adds a layer of return that can compound over time, especially in a reinvestment strategy.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.07%

The portfolio benefits from low total expense ratios (TER), averaging 0.07%, which is favorable for long-term growth as lower costs directly translate to higher net returns. The Vanguard S&P 500 ETF's exceptionally low fee is a highlight, emphasizing the cost-efficiency of index fund investing.

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.

Considering the Efficient Frontier, the portfolio's current allocation suggests a strong position for maximizing returns for the given level of risk. However, the heavy emphasis on the S&P 500 and the limited asset class diversification could be areas for optimization. Adjusting the allocation to include bonds or alternative investments could potentially enhance the risk-return profile.

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