Growth-focused portfolio with a strong emphasis on US large-cap equities and dividends
Report created on Oct 14, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 40.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 40.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 20.00%
The portfolio is heavily weighted towards US large-cap equities, with a 40% allocation each in the Schwab U.S. Large-Cap Growth ETF and the Vanguard S&P 500 ETF, and a 20% allocation in the Schwab U.S. Dividend Equity ETF. This composition indicates a growth-oriented strategy with a tilt towards dividend-generating assets. However, the concentration in similar asset types and sectors, particularly technology, suggests low diversification across asset classes and geography, which could expose the portfolio to higher volatility and sector-specific risks.
Growth
Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.11%, with a significant drawdown of -33.10%. The days contributing to 90% of returns number 36, highlighting the portfolio's performance is heavily reliant on short periods of significant gains. This pattern underscores the growth-focused nature of the portfolio but also points to potential volatility, where large drawdowns may occur during market downturns.
Projection
Monte Carlo simulations project a wide range of outcomes, with a median increase of 624.5% in portfolio value over the simulated period. While 999 out of 1,000 simulations resulted in positive returns, this range of outcomes underscores the inherent uncertainty in forecasting future performance, especially given the portfolio's concentration in high-growth, high-volatility sectors. It's crucial to remember that such simulations are based on historical data and cannot account for unforeseen market shifts.
Asset classes
- Stocks 100%
The portfolio is entirely invested in stocks, with no allocation to other asset classes such as bonds or real estate. This singular focus enhances potential returns but also increases risk, particularly in market downturns where diversification across asset classes could mitigate losses. The absence of investments in fixed income or alternative assets limits opportunities for risk-adjusted returns and portfolio stability.
Sectors
- Technology 36%
- Consumer Discretionary 11%
- Telecommunications 11%
- Financials 10%
- Health Care 10%
- Industrials 7%
- Consumer Staples 7%
- Energy 5%
- Basic Materials 2%
- Utilities 1%
- Real Estate 1%
Sector allocation is heavily weighted towards Technology (36%), with significant investments in Consumer Cyclicals and Communication Services. This concentration enhances exposure to sectors with high growth potential but also increases sensitivity to sector-specific risks, such as regulatory changes or technological disruptions. Diversifying into underrepresented sectors or increasing allocations to defensive sectors could provide a buffer against volatility.
Regions
- North America 100%
The geographic allocation is exclusively focused on North America, with no exposure to international markets. This concentration in a single region can limit growth opportunities available in emerging markets or developed markets outside of the US. Incorporating international equities could enhance diversification and potentially reduce portfolio risk while tapping into global growth trends.
Market capitalization
- Mega-cap 44%
- Large-cap 34%
- Mid-cap 19%
- Small-cap 2%
The portfolio's market capitalization exposure is skewed towards Mega (44%) and Big (34%) cap stocks, with minimal exposure to Medium, Small, and Micro caps. This bias towards larger companies aligns with the portfolio's growth and stability objectives but may limit potential gains from smaller, high-growth companies. A more balanced allocation across different market caps could enhance returns and diversification.
Redundant positions
-
High correlationVanguard S&P 500 ETFSchwab U.S. Large-Cap Growth ETF
The high correlation between the Vanguard S&P 500 ETF and the Schwab U.S. Large-Cap Growth ETF indicates overlapping holdings that contribute little to diversification. This redundancy not only concentrates risk but also reduces the portfolio's ability to withstand sector-specific downturns. Reducing overlap by reallocating assets could improve diversification and risk management.
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.
The current portfolio could be optimized by addressing the high correlation between assets and the lack of diversification across asset classes and geographies. Utilizing the Efficient Frontier concept could identify a mix of investments that maximizes returns for a given level of risk. However, optimization should also consider factors beyond risk and return, such as investment goals and time horizon.
Dividends
- Schwab U.S. Dividend Equity ETF 3.90%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.42%
The dividend yields from the ETFs contribute to the portfolio's total yield of 1.42%, with the Schwab U.S. Dividend Equity ETF offering a substantial yield of 3.90%. While dividends provide a steady income stream and can contribute to total returns, the overall yield reflects the portfolio's growth orientation over income generation. Balancing growth and income strategies could provide a more consistent return profile across market cycles.
Ongoing product costs
- Schwab U.S. Dividend Equity ETF 0.06%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.04%
The portfolio benefits from low total expense ratios (TER) across the ETFs, averaging 0.04%. This cost efficiency supports higher net returns over the long term by minimizing the drag on performance due to fees. Maintaining a focus on low-cost investments is a prudent strategy, especially in a growth-oriented portfolio where compounding returns can significantly impact wealth accumulation.
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