Concentrated healthcare leader combined with a broad low cost US equity foundation for growth
Report created on Jul 22, 2024Risk profile
5/7
Diversification profile
3/5
Positions
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NV Novo Nordisk A/S
NVO - US6701002056 50.00% -
SC Schwab U.S. Broad Market ETF
SCHB - US8085241029 50.00%
This portfolio is extremely simple and very focused: half is in a single healthcare stock and the other half in a broad US equity ETF. That means 100% stocks, no bonds or alternatives, which lines up with a “growth” risk profile rather than a capital‑preservation one. Simplicity is powerful because it’s easier to understand what you own and why it moves. The flip side is that a 50% position in one company makes the overall results heavily dependent on that business. Anyone using a structure like this should be genuinely comfortable with equity market swings and with one company driving a big share of outcomes.
Growth
Over the last decade, a hypothetical $1,000 grew to about $2,561, which is solid but behind both the US market and the global market. The portfolio’s CAGR, or compound annual growth rate, was 9.89% versus 13.77% for the US and 11.24% globally, meaning slower average annual growth. Max drawdown hit about −45%, noticeably worse than the roughly −34% drops in the benchmarks. Drawdown is the worst peak‑to‑trough fall, and it tells you how much pain you had to sit through. The key takeaway is that this mix has delivered less return while taking tougher hits, which is a cue to think about whether that risk/return balance still feels right.
Asset classes
- Stocks 100%
Asset‑class exposure is all‑in on equities, with 100% in stocks and no ballast from bonds or cash‑like holdings. Equities historically offer higher long‑term growth but also sharper short‑term swings, which aligns with a growth‑investor risk score of 5/7. Compared with many balanced portfolios that mix in bonds to dampen volatility, this structure will likely feel bumpier, especially during recessions or rate shocks. The positive side is full participation in equity recoveries and long‑run compounding. Anyone using a 100% equity mix should have a long time horizon and be psychologically ready to hold through big drops without being forced to sell at bad moments.
Sectors
- Health Care 55%
- Technology 16%
- Financials 6%
- Consumer Discretionary 5%
- Industrials 5%
- Telecommunications 5%
- Consumer Staples 2%
- Energy 2%
- Utilities 1%
- Real Estate 1%
- Basic Materials 1%
Sector‑wise, healthcare dominates at 55%, driven by the large Novo Nordisk position, with technology the next biggest at 16% and the rest spread fairly thinly. A typical global equity benchmark would not have healthcare anywhere near this high, so this is a big intentional tilt. Sector tilts matter because different areas of the market react differently to interest rates, regulation, and economic cycles. A healthcare‑heavy mix could hold up differently than the market during growth scares or policy changes affecting drug pricing. The main takeaway is that returns will be heavily tied to how this one segment of the economy performs versus the broader market over time.
Regions
- Europe Developed 50%
- North America 50%
Geographically, the split is very neat: roughly 50% developed Europe, 50% North America. That’s a much larger European stake, and lower US weight, than most global benchmarks that tend to lean more heavily toward the US. This balance gives meaningful diversification away from a pure US focus, which can help if US markets lag. At the same time, it introduces currency and policy risk linked to Europe, especially through the large Novo Nordisk stake. Overall, this two‑region mix is simple but gives genuine international exposure rather than being home‑country only, which is a constructive step toward broader diversification.
Market capitalization
- Large-cap 66%
- Mega-cap 21%
- Mid-cap 10%
- Small-cap 3%
- Micro-cap 1%
By market capitalization, the portfolio is dominated by large and mega‑cap companies, with only a small slice in mid, small, and micro caps. Large and mega caps tend to be more established businesses with deeper liquidity and often more stable earnings, which can reduce some idiosyncratic risk compared with a heavy small‑cap tilt. On the other hand, smaller companies sometimes offer higher growth potential over long periods. This cap structure is quite similar to common broad‑market benchmarks, which is a positive sign: outside of the single‑stock overweight, the overall size mix looks mainstream and supportive of diversified, market‑like behavior.
True holdings
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NV NVIDIA Corporation 3.35%
Part of fund(s):- Schwab U.S. Broad Market ETF
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AA Apple Inc 2.90%
Part of fund(s):- Schwab U.S. Broad Market ETF
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MS Microsoft Corporation 2.23%
Part of fund(s):- Schwab U.S. Broad Market ETF
-
AM Amazon.com Inc 1.61%
Part of fund(s):- Schwab U.S. Broad Market ETF
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GO Alphabet Inc Class A 1.38%
Part of fund(s):- Schwab U.S. Broad Market ETF
-
AV Broadcom Inc 1.20%
Part of fund(s):- Schwab U.S. Broad Market ETF
-
GO Alphabet Inc Class C 1.10%
Part of fund(s):- Schwab U.S. Broad Market ETF
-
ME Meta Platforms Inc. 1.04%
Part of fund(s):- Schwab U.S. Broad Market ETF
-
TS Tesla Inc 0.84%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Schwab U.S. Broad Market ETF
- Top 10 total 65.66%
Looking through the ETF’s top holdings, the single stock position clearly dominates: Novo Nordisk is 50% of total exposure by itself. The rest of the top look‑through names are the usual mega‑cap US giants like NVIDIA, Apple, Microsoft, Amazon, Alphabet, and Meta, each only a few percent of the total portfolio. That means there’s no major hidden overlap problem beyond what’s intentional: one big stock plus a diversified US basket. Because only top‑10 ETF holdings are used, overlap with mid‑sized names is understated, but the overarching story is straightforward concentration in one company plus broad market exposure.
Factors
Factor exposure shows a few notable tilts. Yield is high at 75%, meaning a bias toward income‑paying stocks, while low volatility is also high at 69%, suggesting a lean toward historically steadier names. Value sits low at 36%, showing a mild tilt away from traditional “cheap” stocks. Factor investing is about these underlying traits that research has linked to long‑term returns, like income, stability, or momentum. A high yield and low‑vol mix may cushion some downside and produce a smoother ride but might lag in roaring, speculative markets. The mild anti‑value tilt means the portfolio may favor quality and growth over deep‑discount turnarounds.
Risk contribution
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Novo Nordisk A/S
Weight: 50.00% 69.8% -
Schwab U.S. Broad Market ETF
Weight: 50.00% 30.2%
Risk contribution makes the concentration story crystal clear: Novo Nordisk is 50% of the portfolio by weight but almost 70% of the total risk. The broad US ETF is the other half of the weight but only about 30% of total volatility. Risk contribution measures how much each holding drives the portfolio’s ups and downs, which can be very different from simple weight. Here, the single‑stock position is the main “loud instrument in the orchestra.” If the goal is to rely less on one company’s fortunes, dialing down that weight and shifting more into diversified vehicles would spread risk more evenly without needing more holdings overall.
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 mix sits below the efficient frontier, with a Sharpe ratio of 0.48 versus 0.73 for the optimal portfolio using the same holdings. Sharpe ratio measures return per unit of risk, like miles per gallon for your portfolio. Being about 2 percentage points below the frontier at the same risk level means the same ingredients could be combined more effectively just by changing weights. The minimum‑variance and max‑Sharpe mixes offer higher expected returns with lower volatility. In plain terms, history suggests that dialing back the single‑stock concentration and letting the diversified ETF do more heavy lifting could improve the overall tradeoff.
Dividends
- Novo Nordisk A/S 4.60%
- Schwab U.S. Broad Market ETF 0.90%
- Weighted yield (per year) 2.75%
The overall dividend yield around 2.75% is decent for a growth‑oriented, all‑equity setup, helped a lot by Novo Nordisk’s 4.6% yield relative to the ETF’s 0.9%. Dividends can be an important part of total return, especially over long stretches where prices move sideways but payouts keep compounding. For someone reinvesting dividends, this yield steadily buys more shares, quietly boosting long‑term growth. For someone later in their journey, it could also support a modest income stream. It’s worth remembering that dividends aren’t guaranteed and can be cut, but a balanced mix of yield and growth is generally a healthy sign.
Ongoing product costs
- Schwab U.S. Broad Market ETF 0.03%
- Weighted costs total (per year) 0.02%
Costs are an area of real strength. The US broad market ETF has an expense ratio of just 0.03%, pulling the blended portfolio cost down to about 0.02%, which is impressively low. Low ongoing fees matter because they’re one of the few things an investor can reliably control, and even tiny differences compound over decades. Here, almost all the “fee drag” is minimized, letting more of the return stay in your pocket. This cost profile is fully aligned with best practices for long‑term investing and gives a solid foundation, especially compared with many actively managed funds that charge 0.5–1.0% or more each year.
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