A growth focused portfolio tilted to large cap United States companies with modest diversification

Report created on Aug 23, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is very concentrated in three broad equity ETFs, with roughly three fifths in a major large cap index, about a quarter in a core global equity fund, and the rest in a growth tilted basket of big innovative companies. Everything is firmly in the growth camp, with only a tiny allocation to cash and no explicit stabilizers like bonds or guaranteed products. This structure matters because it sets expectations: returns will closely track global stock markets, especially large United States businesses. To smooth the ride a bit, an investor could slowly introduce a small slice of defensive assets or a more balanced equity fund, especially as time horizon shortens or major life goals get closer.

Growth Info

Historically, this mix has been very strong, with a compound annual growth rate (CAGR) of about 17%. CAGR is like the average speed of a car over a long trip, smoothing out bumps along the way. A $10,000 starting amount growing at 17% for 10 years would land around $48,000, ignoring taxes and fees. The downside has also been meaningful, with a roughly 28% maximum drawdown, meaning at one point the portfolio could have fallen from $100,000 to about $72,000. That kind of drop is normal for a growth profile. Past performance can’t predict the future, but it does show this structure has historically rewarded patience through volatility.

Projection Info

The Monte Carlo results show a wide but mostly positive range of possible futures, which fits a growth heavy equity strategy. Monte Carlo simulations use many “what if” paths based on historical patterns to estimate where values might end up; they’re a bit like running 1,000 alternate timelines using past return and volatility stats. Here, even the lower 5th percentile outcome more than doubles starting capital, while median and higher outcomes grow several times over. That’s encouraging, but it relies on history continuing to rhyme. Simulations can’t account for unknown shocks or regime changes, so an investor might treat them as rough guideposts and still keep an emergency fund and short term cash outside this portfolio.

Asset classes Info

  • US Equity
    84%
  • Stocks
    7%
  • Cash
    1%

Nearly everything here is in equities, with about 84% in one major equity market and 7% in broader global stocks, plus just a sliver in cash. That means returns will be driven overwhelmingly by stock market movements rather than interest rates or bond markets. This allocation is well aligned with a growth label and can work well for long horizons, but it doesn’t provide much cushion during deep bear markets. Many widely used benchmarks blend in more defensive assets. Someone wanting a slightly smoother experience could gradually add a small percentage of lower volatility holdings while keeping the core equity growth engine intact for long term compounding.

Sectors Info

  • Technology
    35%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is notably tilted toward technology and related growth areas, with tech alone around a third of the portfolio, and meaningful weights in communication services and consumer cyclicals. That tilt helps explain the strong historical returns, since these areas have led markets for years. It also raises sensitivity to rising interest rates or periods when growth stocks fall out of favour. On the positive side, you’re still holding all 11 major sectors, which is better diversified than a narrow thematic approach. To reduce boom bust swings, an investor could shift a small slice toward more balanced sector exposure over time, while keeping a deliberate overweight in growth themes if that tilt is intentional.

Regions Info

  • North America
    92%
  • Europe Developed
    4%
  • Japan
    2%
  • Asia Emerging
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily anchored in North America, at over 90%, with only small allocations to Europe, Japan, and emerging Asia. This is quite common relative to popular benchmarks but does leave results tied mainly to one economic region and one currency bloc. When that region leads, as it has recently, returns feel great; when it lags, the portfolio may underperform more globally balanced mixes. This allocation is well-balanced against many growth style portfolios but could be nudged more global if an investor wants to spread political, regulatory, and sector risks. Even moving a modest amount toward non North American equities can make the overall return stream less dependent on any single market.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    17%
  • Small-cap
    2%

The market capitalization breakdown shows a strong lean to mega and big companies, with only a small slice in mid caps and almost none in small caps. Mega caps are the household names that dominate indexes; they tend to be more stable businesses but can also be richly valued, especially during growth booms. This size profile aligns closely with major global benchmarks and helps keep liquidity and trading costs low. However, it slightly limits exposure to potential higher growth smaller companies. For someone comfortable with extra volatility, a gradual, modest increase in mid and small cap exposure could boost diversification and long term return potential without overturning the portfolio’s large cap foundation.

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 a risk return chart, this mix likely sits near the higher risk, higher reward end of the Efficient Frontier. The Efficient Frontier is a curve showing the best possible trade off between volatility and return for a given set of assets when you only change their weights. With three overlapping growth ETFs, there may be room to slightly improve efficiency by trimming redundancy and adding a small slice of lower volatility or more diversifying assets. Efficiency here doesn’t mean owning everything or minimizing risk; it means getting the most expected return for the level of bumpiness you’re willing to tolerate while keeping the same basic building blocks in play.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core Equity Portfolio 0.90%
  • iShares NASDAQ 100 (CAD Hedged) 0.10%
  • Weighted yield (per year) 0.55%

The total yield around 0.55% is quite low, reflecting a growth oriented, large cap tech heavy mix. Dividend yield is the cash payment investors receive each year as a percentage of portfolio value; it’s like rent from owning businesses. Here, most of the expected return comes from price appreciation rather than income. That’s totally fine for someone still in the accumulation phase who reinvests everything, because it allows companies to keep more cash for reinvestment. For investors wanting income later, it may be useful over time to tilt a portion toward slightly higher yielding equity or mixed strategies, while recognizing that chasing yield too aggressively can increase risk or reduce overall growth.

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