A high growth tilted stock portfolio with strong diversification but overlapping large cap exposure

Report created on Aug 11, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is almost fully in stocks, split across four broad, low-cost ETFs, with no bonds and only a tiny cash slice. The largest position tracks the total US market, followed by international stocks, plus explicit tilts to US small cap value and US large cap growth. Compared to many growth benchmarks, this is more concentrated in equities and more factor-tilted, but still well diversified across thousands of companies. This setup is powerful for long-term compounding but can be emotionally tough in deep downturns. If volatility feels uncomfortable, dialing back the pure equity share or reducing factor tilts could help smooth the ride while keeping a long-term growth focus.

Growth Info

Historically, a portfolio like this turning $10,000 into roughly $44,000 over 10 years would match a 16.1% CAGR (Compound Annual Growth Rate), which measures the “average speed” of growth per year. That’s stronger than many broad equity benchmarks over the same stretch, but it came with a max drawdown of about -36%, meaning a sizeable temporary loss from peak to trough. Only 19 days made up 90% of total gains, showing how missing a few strong days can seriously hurt results. This history is encouraging, but past returns are not a promise; it’s wise to mentally budget for similar or worse drawdowns in future bear markets.

Projection Info

The Monte Carlo analysis runs 1,000 simulated futures using past return and volatility patterns to see a range of outcomes. Think of it as rolling the dice on many alternate histories based on what markets have done before. The median path (50th percentile) ending near 659% suggests strong upside if markets behave similarly, while the 5th percentile at about 70.5% shows that much lower outcomes are possible. An average simulated annual return of 18.37% is attractive but not guaranteed. Simulations assume that future market behavior resembles the past, which is a big if, so it helps to treat these numbers as rough guideposts for planning rather than precise expectations.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The allocation is 99% stocks and 1% cash, with no meaningful bonds or alternative assets. That’s a classic “growth profile” setup, prioritizing long-term appreciation over short-term stability. It lines up with a risk score of 5 out of 7 and a strong diversification score, since the stock holdings span many regions and company sizes. This equity-heavy mix can work well for long horizons, but it can also lead to sharp swings during market stress. If short-term spending needs or sleep-at-night comfort are priorities, introducing a modest buffer of defensive assets could help reduce the impact of deep drawdowns without completely sacrificing growth potential.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Consumer Discretionary
    13%
  • Industrials
    11%
  • Telecommunications
    8%
  • Health Care
    8%
  • Energy
    6%
  • Consumer Staples
    4%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector exposure is broad and well spread: technology (~26%) leads, followed by financials, consumer cyclicals, and industrials, with smaller but meaningful weights in communication services, healthcare, energy, consumer defensive, materials, real estate, and utilities. This looks similar to many global growth benchmarks, where tech and related areas dominate. A tech-heavy tilt can boost returns during innovation booms but often increases sensitivity to interest rates and sentiment shifts. The current breakdown is well-balanced and aligns closely with global standards. If concern rises about overreliance on a single theme, trimming the most aggressive growth exposure rather than reshaping everything can keep the overall structure intact.

Regions Info

  • North America
    76%
  • Europe Developed
    9%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, about 76% is in North America, with most of the rest spread across developed Europe, Japan, and other developed Asia, plus smaller slices in emerging markets. That overweight to the US mirrors many global portfolios and recent benchmark trends, where the US has outperformed. This alignment is actually a strength right now, but it does mean results are heavily tied to the health of the US economy and policy. For some investors, gradually nudging more toward non-US markets can help diversify currency, political, and growth risks. For others, maintaining the US tilt is acceptable as long as they understand that regional concentration can cut both ways.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    23%
  • Mid-cap
    14%
  • Small-cap
    13%
  • Micro-cap
    11%

Market cap exposure is nicely tiered: roughly 60% in mega and big companies, with the rest spread across mid, small, and even micro caps. That structure provides stability from larger firms plus extra growth and risk from smaller names, especially via the dedicated small cap value ETF. This mix is more diversified by size than many plain-vanilla benchmarks, which lean heavier on mega caps. That’s a positive for long-term growth potential but can mean sharper swings when smaller companies fall out of favor. If volatility spikes feel uncomfortable, slightly easing off the smallest segments can keep diversification benefits while toning down the most extreme moves.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The portfolio’s US total market ETF and the US large cap growth ETF are highly correlated, meaning they tend to move in very similar ways. Correlation is a measure of how often assets rise or fall together; when it’s high, you get less diversification benefit in a downturn. Here, the growth ETF largely doubles up exposure to similar large US names already inside the total market fund. The core structure is still broadly diversified, but trimming overlapping positions can simplify the lineup and make each holding pull its own weight. Replacing redundancy with truly different risk drivers can improve resilience without changing the risk level dramatically.

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 basis, this portfolio already sits in a strong spot, but it could likely move closer to the Efficient Frontier. The Efficient Frontier is the set of portfolios that offer the best possible return for each risk level, given the specific building blocks you use. Here, the main tweak would be rebalancing between the existing ETFs and possibly reducing the highly correlated pair of US large cap funds. That doesn’t mean chasing the highest return, but instead adjusting weights so that, for the same overall volatility, expected return is as high as possible. Any optimization should still respect comfort with drawdowns and practical rebalancing rules.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.50%

The overall yield around 1.5% is modest, which fits a growth-focused equity portfolio. Dividends are the cash payouts companies distribute to shareholders; they can be an important part of total return, especially for more conservative or income-focused approaches. Here, the international fund and small cap value ETF provide most of the yield, while the growth ETF is naturally low yielding. This setup makes sense for someone prioritizing capital appreciation over immediate cash flow. If future goals include more regular income—say, for retirement spending—gradually shifting a portion toward higher yielding, more stable holdings later on can help, while leaving the growth engine mostly intact today.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.08%

Portfolio costs are impressively low, with a blended expense ratio around 0.08%. The expense ratio is the annual fee charged by funds, and keeping it low is one of the few “sure things” in investing because every dollar not spent on fees stays invested to compound. Compared with many actively managed setups, this level of cost is a big advantage and aligns well with best practices. The slightly higher fee on the small cap value fund is reasonable given its more specialized strategy. There’s no obvious pressure to cut costs further; the bigger opportunity is likely in simplifying overlapping funds rather than shaving a basis point or two.

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