A tale of two ETFs dancing the same tune in a diversification desert
Report created on Sep 25, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 50.00% -
SP Invesco S&P 500 GARP ETF
SPGP - US46137V4317 50.00%
Let's start with the composition: 50% in Schwab U.S. Dividend Equity ETF and 50% in Invesco S&P 500 GARP ETF. This portfolio screams "I fear change" louder than someone using a flip phone in 2023. It's like betting on both the tortoise and the hare, but if they were running in a circle. The diversification here is so low it's practically subterranean. It's like deciding to diversify your diet by eating both vanilla and French vanilla ice cream.
Growth
Historically, this portfolio has a CAGR of 14.69%, which isn't terrible. But let's not forget that with a max drawdown of -37.88%, it's like enjoying a roller coaster ride until you realize you're not strapped in. Those 30 days that make up 90% of returns? It's like winning the lottery but only because you bought all the tickets. High risk, high reward, but with an unsettling emphasis on the risk part.
Projection
Monte Carlo simulations show a wide range of outcomes, with a 50th percentile projection of 562.4% growth. That's like predicting sunny weather in the UK; hopeful but potentially misguided. Remember, Monte Carlo is like playing video game simulations of your life — interesting, but not always accurate. Betting your future on these numbers is like planning your retirement based on your horoscope.
Asset classes
- Stocks 100%
A 100% allocation to stocks with zero cash or bonds is like driving a car with no brakes or airbags. Sure, you might get to your destination faster, but at what cost? This portfolio's asset class distribution has the diversification of a kid's plate at a buffet — all sweets, no veggies.
Sectors
- Technology 17%
- Consumer Discretionary 16%
- Industrials 14%
- Energy 13%
- Financials 12%
- Health Care 11%
- Consumer Staples 11%
- Telecommunications 4%
- Real Estate 2%
- Basic Materials 1%
The sector spread is not terrible, but it's like saying you have a diversified music taste because you listen to both pop and pop-rock. Heavy on tech and cyclicals, it's set for a feast in bull markets and a famine in bear ones. The negligible allocation to utilities and basic materials is like packing for a trip and forgetting underwear — not critical until it's critically embarrassing.
Regions
- North America 99%
- Europe Developed 1%
With 99% in North America, this portfolio has the geographic diversity of a high school reunion in a small town. Investing almost entirely in the U.S. is like believing the best food in the world can only be found in your hometown diner. Sure, it's comforting, but it's hardly a well-rounded diet.
Market capitalization
- Mid-cap 49%
- Large-cap 39%
- Mega-cap 6%
- Small-cap 5%
- Micro-cap 1%
The market cap allocation is like someone trying to balance their diet by eating both medium and large pizzas. With a heavy tilt towards medium and big caps, it's clear this portfolio is trying to walk the line between growth and stability but ends up looking like it can't decide what to wear to the market's party.
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.
Regarding optimization, this portfolio is like trying to improve your car's fuel efficiency by only filling the tank halfway — it misses the point. The risk-return trade-off here is like a seesaw with all the weight on one side. It's not balanced, and it's not going to end well unless some major adjustments are made.
Dividends
- Schwab U.S. Dividend Equity ETF 3.80%
- Invesco S&P 500 GARP ETF 1.10%
- Weighted yield (per year) 2.45%
The dividend yield strategy is like finding a decent restaurant in a tourist trap — not the best, but better than expected. A total yield of 2.45% is respectable, but relying on dividends from a portfolio this narrowly focused is like expecting nutritional balance from a diet of only protein shakes.
Ongoing product costs
- Schwab U.S. Dividend Equity ETF 0.06%
- Invesco S&P 500 GARP ETF 0.34%
- Weighted costs total (per year) 0.20%
With total TER at 0.20%, at least the costs aren't bleeding you dry. It's like finding out the cheap sunglasses you bought actually do block UV rays. Low fees are the silver lining on a cloud that's otherwise a bit too fluffy and lacking in substance.
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