A growth-focused portfolio with high concentration in US large-cap stocks and low diversification

Report created on Aug 4, 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 concentrated in U.S. large-cap stocks, allocated almost equally across three Schwab ETFs: U.S. Large-Cap, U.S. Dividend Equity, and U.S. Large-Cap Growth ETFs. This composition suggests a strong growth orientation but reveals a low level of diversification. The portfolio's heavy reliance on a single asset class and similar sectors within the U.S. market increases its vulnerability to market volatility specific to these areas.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 14.77%, the portfolio has demonstrated strong historical performance. However, the maximum drawdown of -33.15% indicates significant volatility and potential risk during market downturns. It's essential to note that while past performance is a useful indicator, it does not guarantee future returns. The days contributing most to returns highlight the portfolio's susceptibility to short-term market movements.

Projection Info

The Monte Carlo simulation, using 1,000 iterations, projects a wide range of outcomes, with the median scenario suggesting a substantial increase in value. However, the presence of a 5th percentile outcome at 84.9% of the initial value underscores the risk of loss. This forward-looking tool helps in understanding potential volatility but relies on historical data, which may not always predict future movements accurately.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely in stocks, with no exposure to other asset classes like bonds or real estate, which could offer diversification benefits and potentially reduce volatility. This singular focus increases the portfolio's sensitivity to stock market fluctuations, emphasizing the need for a more balanced approach to asset allocation.

Sectors Info

  • Technology
    32%
  • Consumer Discretionary
    11%
  • Health Care
    11%
  • Financials
    10%
  • Telecommunications
    9%
  • Consumer Staples
    8%
  • Energy
    8%
  • Industrials
    8%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocation is predominantly in technology, with significant investments also in consumer cyclicals, healthcare, and financial services. This sector concentration aligns with the portfolio's growth strategy but may increase risk during sector-specific downturns. Diversifying across a broader range of sectors could mitigate some of this risk.

Regions Info

  • North America
    99%

Geographic exposure is almost exclusively North American, with negligible diversification outside this region. This concentration in a single geographic area limits exposure to potential growth in other global markets and increases susceptibility to regional economic and political events.

Market capitalization Info

  • Large-cap
    38%
  • Mega-cap
    36%
  • Mid-cap
    22%
  • Small-cap
    3%

The portfolio's focus on big and mega-cap companies suggests a preference for established, potentially less volatile companies. However, the limited exposure to medium, small, and micro-cap stocks restricts opportunities for higher growth rates that these smaller companies can offer, albeit with increased risk.

Redundant positions Info

  • Schwab U.S. Large-Cap ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The high correlation between the Schwab U.S. Large-Cap ETF and the Schwab U.S. Large-Cap Growth ETF indicates redundancy, reducing the diversification benefits within the portfolio. Diversifying into assets with low correlation can help in spreading risk and potentially smoothing out returns over time.

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.

The portfolio could benefit from optimization to improve its risk-return profile. Removing overlapping assets and introducing non-correlated investments could enhance diversification. While the Efficient Frontier can guide these adjustments for an optimal risk-return balance, it's important to consider that this optimization is based on historical data, which may not fully predict future performance.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Schwab U.S. Large-Cap ETF 1.20%
  • Weighted yield (per year) 1.83%

The dividend yield of the portfolio averages 1.83%, with the Schwab U.S. Dividend Equity ETF contributing the most. Dividends can provide a steady income stream and contribute to total returns, especially in volatile or down markets. However, the focus on growth assets typically means lower overall yield.

Ongoing product costs Info

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

The portfolio's total expense ratio (TER) of 0.04% is impressively low, which supports better long-term performance by minimizing the drag on returns due to costs. Keeping costs low is a crucial aspect of investment strategy, particularly in a growth-oriented portfolio where compounding returns over time is a priority.

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