A growth-focused portfolio with dominant US exposure and low-cost ETFs

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 suits an investor with a moderate to high-risk tolerance, seeking growth over a long-term horizon. It is ideal for those who prioritize capital appreciation and are comfortable with potential market fluctuations. The focus on US equities and low-cost ETFs aligns with investors who value efficiency and broad market exposure. While it offers a modest dividend yield, the primary goal is growth rather than income generation. This portfolio is well-suited for individuals looking to build wealth and willing to endure short-term volatility for long-term gains.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    60.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    20.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%

This portfolio is composed primarily of ETFs, with a strong focus on US equities. The Vanguard S&P 500 ETF holds a significant 60% weight, while the Avantis U.S. Small Cap Value ETF and Vanguard Total International Stock Index Fund ETF Shares each account for 20%. Compared to common benchmarks, this portfolio is heavily weighted towards large-cap US stocks, with some exposure to small-cap and international equities. This composition suggests a growth-oriented strategy, with a focus on capital appreciation. Diversification could be enhanced by incorporating other asset classes, such as bonds or alternative investments, to balance potential risks associated with equity market volatility.

Growth Info

Historically, this portfolio has demonstrated strong performance, with a Compound Annual Growth Rate (CAGR) of 15.35%. This impressive growth rate indicates that the portfolio has outperformed many common benchmarks over the same period. However, it also experienced a maximum drawdown of -36.31%, highlighting its susceptibility to market downturns. While past performance is not indicative of future results, understanding these trends can help set realistic expectations. To mitigate potential losses, consider strategies that provide downside protection, such as incorporating more defensive assets or implementing stop-loss measures.

Projection Info

Forward projections using Monte Carlo simulations show varied potential outcomes, with the 5th percentile at 42.74% and the 50th percentile at 457.7%. The 67th percentile projects a 707.03% return, reflecting the portfolio's growth potential. These simulations use historical data to estimate future performance, but it's crucial to remember that they don't guarantee results. With 975 out of 1,000 simulations yielding positive returns, the portfolio seems well-positioned for growth. However, it's wise to periodically review and adjust the allocation to align with changing market conditions and personal investment goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is nearly entirely invested in stocks, accounting for over 99% of the allocation. While this concentration can drive growth during bullish markets, it also increases exposure to equity market volatility. Compared to benchmarks that often include a mix of stocks and bonds, this asset class distribution is more aggressive. To enhance diversification and potentially reduce risk, consider incorporating other asset classes, such as fixed income or real assets. This adjustment could provide more stability in times of market stress and contribute to a smoother overall return profile.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Consumer Discretionary
    12%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Energy
    6%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation of this portfolio is varied, with notable concentrations in Technology (23.57%), Financial Services (17.91%), and Consumer Cyclicals (11.66%). These sectors are often associated with higher growth potential, but they can also be more volatile, especially during economic downturns. Compared to common benchmark allocations, the portfolio's sector distribution is well-diversified, covering a broad range of industries. This diversification can help mitigate sector-specific risks. However, it's important to monitor sector trends and consider rebalancing if one sector becomes significantly overweight or underweight relative to market conditions.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America, with 80.9% exposure. While this reflects the dominance of US equities, it limits exposure to international markets. Europe, Asia, and other regions collectively account for less than 20% of the portfolio. Compared to global benchmarks, this geographic allocation is less diversified, potentially missing out on growth opportunities in emerging markets. To enhance global diversification, consider increasing exposure to underrepresented regions. This approach can provide a hedge against domestic market fluctuations and tap into broader economic growth drivers.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 1.72%

With a total dividend yield of 1.72%, this portfolio provides a modest income stream, primarily driven by the Vanguard Total International Stock Index Fund ETF Shares, which offers a 3.4% yield. Dividend income can enhance total returns, especially during periods of market volatility. While the yield is not the primary focus for growth-oriented portfolios, it can still contribute to overall performance. Investors seeking higher income might consider increasing exposure to dividend-focused funds. However, it's important to balance income needs with growth objectives to maintain the portfolio's risk-return profile.

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 0.08%
  • Weighted costs total (per year) 0.08%

The total expense ratio (TER) of 0.08% for this portfolio is impressively low, primarily due to the Vanguard S&P 500 ETF's minimal fees. Low costs are advantageous as they enhance long-term returns by reducing the drag on performance. Compared to industry averages, this portfolio's costs are well-aligned with best practices, supporting efficient growth. While the current cost structure is favorable, it's prudent to periodically review fees to ensure they remain competitive. Consider whether any higher-fee assets could be replaced with lower-cost alternatives without sacrificing performance.

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.

The portfolio's risk-return profile could potentially be optimized using the Efficient Frontier concept, which seeks the best possible risk-return ratio. This approach involves adjusting the allocation of existing assets to achieve maximum returns for a given level of risk. While the portfolio is already well-diversified across sectors and geographies, fine-tuning the allocation could improve efficiency. It's important to note that optimization is based solely on the current assets and their weightings. Regular reviews and adjustments can help maintain an optimal balance as market conditions evolve.

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