Focused low cost us equity tracker portfolio with efficient risk return balance for growth
Report created on May 4, 2024Risk profile
5/7
Diversification profile
2/5
Positions
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VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 60.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 40.00%
The structure is extremely simple: two broad US equity ETFs with 60% in a total market fund and 40% in a large‑cap index. This means 100% exposure to stocks and zero exposure to bonds or alternatives. Simplicity like this is powerful because it is easy to understand and maintain, and avoids many behavioral mistakes. The tradeoff is that there is little flexibility to fine‑tune risk through different asset types. For someone comfortable with stock market swings, this kind of straightforward setup can work well, but anyone wanting smoother returns might usually mix in assets that behave differently from equities.
Growth
Over roughly ten years, $1,000 grew to about $3,580, a compound annual growth rate (CAGR) of 13.63%. CAGR is like your average yearly “cruising speed” over the full trip, smoothing out bumps. The portfolio slightly lagged the US market by 0.19% per year but beat the global market by 2.33% annually, which is a strong long‑term outcome. Max drawdown of about -35% shows the depth of the worst peak‑to‑trough fall, very similar to the benchmarks. This history is solid, but all historical data has limits, and future returns can be very different from the last decade.
Asset classes
- Stocks 100%
All assets are in stocks, with no allocation to bonds, cash, or real assets. That makes this a pure growth‑oriented equity portfolio, which is usually more volatile day‑to‑day but offers higher long‑run return potential than mixed portfolios. Compared with many broad benchmarks that include fixed income, this is a more aggressive stance. This equity‑only structure aligns well with longer time horizons where an investor can ride out significant drawdowns. For anyone needing shorter‑term stability or predictable withdrawals, adding some lower‑volatility asset classes is a common way to dampen swings without abandoning growth entirely.
Sectors
- Technology 32%
- Financials 12%
- Telecommunications 10%
- Health Care 10%
- Consumer Discretionary 10%
- Industrials 10%
- Consumer Staples 5%
- Energy 4%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector exposure is tilted toward technology at 32%, with solid representation across financials, telecom, health care, consumer areas, and industrials. This mix is broadly similar to mainstream US indexes, which is a good sign for diversification within equities. A tech‑heavier profile often benefits during innovation‑driven bull markets but can be more sensitive when interest rates rise or when growth stocks fall out of favor. The presence of defensives like consumer staples, utilities, and health care helps a bit in downturns but won’t fully offset big market shocks in an all‑equity portfolio. Overall, sector balance is healthy and close to standard benchmarks.
Regions
- North America 99%
Geographically, exposure is almost entirely in North America at 99%. That means results are tightly linked to the US economy, policy, and currency. This has been advantageous over the last decade, with US markets outperforming many other regions, which is clear in the outperformance versus the global benchmark. The tradeoff is less diversification against country‑specific risks like regulatory shifts, tax changes, or long stretches where non‑US markets lead. Many global benchmarks allocate more to international equities than this, so the tilt here is clearly home‑biased. Whether that’s comfortable depends on how much global balance is desired outside this account.
Market capitalization
- Mega-cap 43%
- Large-cap 32%
- Mid-cap 19%
- Small-cap 4%
- Micro-cap 1%
Market cap exposure is dominated by mega‑ and large‑caps at about 75%, with mid‑caps making up most of the rest and a small slice in small and micro‑caps. This mirrors broad market behavior and contributes to the neutral factor profile. Larger companies tend to be more stable and liquid, which can make the ride slightly smoother than a portfolio heavily loaded with small caps. The small and micro exposure adds a bit of extra growth and volatility without dominating overall risk. This is a textbook “market‑like” size mix and aligns well with common index investing best practices.
True holdings
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NV NVIDIA Corporation 6.64%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 6.19%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 4.63%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 3.22%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 2.88%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 2.40%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 2.28%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 2.24%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
TS Tesla Inc 1.80%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
BR Berkshire Hathaway Inc 1.45%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 33.71%
Looking through the ETFs, the largest underlying exposures are mega‑cap US names like NVIDIA, Apple, Microsoft, Amazon, and Alphabet. Several appear in both ETFs, which creates hidden concentration in those giants even though only top‑10 holdings were analyzed. This overlap is normal for broad US funds and helps explain why returns are so close to the US market benchmark. The flip side is that portfolio behavior will be heavily influenced by a small group of big companies. Anyone holding additional single‑stock positions in these names elsewhere should view them together to understand their true combined exposure.
Factors
Factor exposures across value, size, momentum, quality, yield, and low volatility all sit near the neutral 50% mark. Factor exposure describes how much a portfolio leans into characteristics that research has linked to returns, like cheapness (value) or stability (low volatility). Here, the lack of strong tilts means behavior should be close to a broad market index without big style bets. That’s beneficial for anyone wanting a simple, core holding that doesn’t rely on one investing style working. It also means there’s room, if desired elsewhere, to add more focused factor strategies without worrying about clashing tilts in this core.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 60.00% 60.4% -
Vanguard S&P 500 ETF
Weight: 40.00% 39.6%
Risk contribution shows how much each holding adds to the portfolio’s overall ups and downs. In this case, the total market ETF contributes about 60% of risk and the S&P 500 ETF about 40%, almost exactly matching their weights. That tells us there are no hidden “risk bombs” where a small position drives a big share of volatility. Because both funds are broad US equities with near‑identical behavior, their risk profiles line up neatly. If the goal is a single coherent risk engine, this is nicely aligned; if the goal is diversification across different risk drivers, the overlap is the main limitation.
Redundant positions
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High correlationVanguard Total Stock Market Index Fund ETF SharesVanguard S&P 500 ETF
Correlation measures how closely two investments move together, with 1.0 meaning they move almost identically. The two ETFs here have a correlation of 1.0, so they rise and fall together, offering almost no diversification benefit between them. This isn’t inherently bad; it simply means the portfolio behaves like one unified US equity index rather than a mix of different return streams. For reducing overall risk, diversification has to come from adding assets that behave differently, not from rearranging similar building blocks. Within a pure‑equity approach, this tight correlation also explains why performance is so close to the US market benchmark.
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 the risk‑return chart, the current portfolio sits right on or very near the efficient frontier. The efficient frontier represents the best expected return you can get for each level of risk, using only the existing holdings in different weightings. The Sharpe ratio of 0.69 is close to 0.76 for the optimal mix, and interestingly the optimal and minimum‑variance portfolios coincide, meaning there’s little room to improve either risk or return by merely reweighting these two ETFs. That’s a strong signal that the current allocation is already efficient for a pure US equity approach.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Weighted yield (per year) 1.20%
The overall dividend yield sits around 1.20%, reflecting the current payout level of US large and broad‑market stocks. Dividends are the cash income companies share with shareholders, and over long periods they can be a meaningful part of total return, even when the headline yield looks modest. Here, the focus is clearly on total return—price growth plus dividends—rather than high income. For someone still in the accumulation phase, this low‑to‑moderate yield is aligned with a growth mindset, where dividends are typically reinvested to buy more shares and compound over time.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.03%
Total ongoing costs are extremely low at about 0.03% per year. The TER (Total Expense Ratio) is the annual fee the ETF provider charges to run the fund, and shaving it down this far is a real structural advantage. Costs are one of the few things investors can reliably control, and over decades even small fee differences compound into large dollar gaps. These fees are meaningfully below typical active funds and even many other passive products. The costs are impressively low, supporting better long‑term performance and leaving more of the portfolio’s return in the investor’s pocket each year.
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