Growth-focused portfolio with high concentration in US large-cap and momentum stocks
Report created on Aug 17, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 75.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 25.00%
This portfolio predominantly invests in two ETFs: the Schwab U.S. Large-Cap Growth ETF and the Invesco S&P 500® Momentum ETF, with a substantial 75% allocated to the former. This concentration reflects a strategic choice to target growth through large-cap companies, particularly in the technology sector, which comprises 44% of the portfolio. The focus on growth and momentum within the U.S. market underlines an aggressive growth strategy, albeit with low diversification across asset classes and geography, as 100% of the assets are allocated to stocks in North America.
Growth
The portfolio has shown an impressive Compound Annual Growth Rate (CAGR) of 22.21%, despite experiencing a maximum drawdown of -32.04%. This performance is indicative of the high-growth, high-volatility nature of the investment strategy, where significant returns are often accompanied by substantial risks. The fact that 90% of the returns came from just 38 days highlights the impact of short-term, high-growth periods on the overall performance.
Projection
Monte Carlo simulations, which run thousands of potential scenarios to predict future performance, suggest a wide range of outcomes for this portfolio. The median projection shows a 1,658.2% increase, with a 5th percentile at 307.7% and a 67th percentile at 2,458.4%, indicating a high degree of uncertainty. Such projections, while useful for understanding potential volatility and reward, are based on past performance and should be interpreted with caution as they do not guarantee future results.
Asset classes
- Stocks 100%
The portfolio's allocation is entirely within stocks, showcasing a lack of asset class diversification. This approach can lead to higher volatility, as stocks are generally more susceptible to market fluctuations compared to bonds or other asset classes. While this can offer higher returns, especially in bullish markets, it also increases the risk during downturns.
Sectors
- Technology 44%
- Telecommunications 14%
- Consumer Discretionary 13%
- Financials 10%
- Health Care 6%
- Industrials 5%
- Consumer Staples 4%
- Energy 1%
- Basic Materials 1%
- Utilities 1%
- Real Estate 1%
Technology, Communication Services, and Consumer Cyclicals dominate the sector allocation, making up over 70% of the portfolio. This concentration in high-growth sectors can lead to significant returns during market upswings but may also expose the portfolio to higher volatility and sector-specific risks. Diversifying across more sectors could potentially reduce volatility without drastically compromising growth prospects.
Regions
- North America 100%
The portfolio's exclusive focus on North America, particularly the U.S., limits geographic diversification. While the U.S. market is a hub for large-cap growth and technology companies, expanding into other developed or emerging markets could provide additional growth opportunities and mitigate region-specific risks.
Market capitalization
- Mega-cap 62%
- Large-cap 25%
- Mid-cap 12%
- Small-cap 1%
With a heavy emphasis on mega and large-cap stocks, the portfolio is positioned to benefit from the stability and growth potential of the largest U.S. companies. However, this focus may limit exposure to the potentially higher growth rates of mid and small-cap companies. Including smaller companies could introduce more diversification and possibly enhance returns over the long term.
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.
Despite its strong performance, the portfolio's current configuration is not on the Efficient Frontier, suggesting there's room for optimization. Adjusting the asset allocation could potentially achieve a more favorable risk-return profile. Specifically, diversifying across more asset classes and regions could enhance returns for the same level of risk.
Dividends
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Invesco S&P 500® Momentum ETF 0.60%
- Weighted yield (per year) 0.45%
With a total dividend yield of 0.45%, the portfolio leans towards growth rather than income generation. This is typical for portfolios concentrated in growth and momentum stocks, where the primary focus is on capital appreciation. Investors prioritizing long-term growth over immediate income streams might find this approach aligns with their goals.
Ongoing product costs
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Invesco S&P 500® Momentum ETF 0.13%
- Weighted costs total (per year) 0.06%
The portfolio benefits from low costs, with a total expense ratio (TER) of 0.06%. This efficiency is crucial for long-term growth, as lower costs directly translate to higher net returns. Especially in growth-focused strategies, minimizing expenses is a key factor in maximizing the compounding effect over time.
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