A growth-focused portfolio with a heavy tilt towards US equities and low costs
Report created on Jul 21, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 15.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 15.00%
The portfolio is heavily weighted towards US equities, with a 70% allocation in the Vanguard S&P 500 ETF, showcasing a strong bias towards large-cap stocks. The addition of a 15% allocation in both the Avantis® U.S. Small Cap Value ETF and the Vanguard Total International Stock Index Fund ETF Shares introduces a blend of small-cap exposure and international diversification. This composition reflects a growth-oriented strategy, leveraging the historical performance of large-cap stocks while seeking additional growth and value from small caps and international markets.
Growth
Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 15.72%, with a maximum drawdown of -35.60%. This performance indicates a robust growth trajectory, albeit with significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 16.0 days highlights the portfolio's reliance on short, sharp gains, which can be typical for growth-focused investments, especially in the volatile small-cap and international segments.
Projection
Monte Carlo simulations, utilizing 1,000 iterations, project a wide range of potential outcomes for the portfolio, with a median (50th percentile) increase of 437.5%. While simulations provide a broad sense of potential future performance, it's crucial to remember that they are based on historical data, which may not always predict future trends. The simulations' positive return in 961 out of 1,000 cases underscores the portfolio's strong growth potential, but investors should remain aware of inherent uncertainties in market movements.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash reserve (1%). This allocation underscores a high growth potential but comes with increased volatility and risk, particularly in market downturns. The absence of bonds or other fixed-income assets means the portfolio may lack a buffer against stock market volatility, an aspect worth considering for those seeking a more balanced risk profile.
Sectors
- Technology 26%
- Financials 17%
- Consumer Discretionary 12%
- Industrials 10%
- Health Care 8%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 5%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
The sectoral distribution leans heavily towards Technology (26%) and Financial Services (17%), followed by Consumer Cyclicals and Industrials. This sectoral allocation is poised to capture growth in innovative and foundational economic sectors but may be susceptible to sector-specific risks, such as regulatory changes or economic cycles affecting technology and finance industries. Diversifying across a broader range of sectors could mitigate some of these risks.
Regions
- North America 86%
- Europe Developed 6%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
With 86% of assets allocated to North America, the portfolio has a strong domestic focus, complemented by a modest international exposure. This geographical distribution leverages the stability and growth potential of the US economy but may underutilize opportunities in emerging markets and developed international markets. Expanding international exposure could enhance diversification and potentially tap into higher growth rates abroad.
Market capitalization
- Mega-cap 39%
- Large-cap 29%
- Mid-cap 15%
- Small-cap 8%
- Micro-cap 8%
The market capitalization breakdown reveals a balanced exposure across mega (39%), big (29%), medium (15%), small (8%), and micro (8%) caps. This distribution supports diversification across different company sizes, potentially reducing volatility and improving risk-adjusted returns. However, the heavy tilt towards larger companies aligns with the portfolio's growth orientation, given their historical stability and performance.
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.
Considering the Efficient Frontier, the portfolio may already be optimized for its current asset allocation, aiming for the best possible risk-return ratio based on historical data. However, the concept of "efficiency" should not preclude the consideration of further diversification or rebalancing to adapt to changing market conditions or personal risk tolerance. Continuous monitoring and adjustment could help maintain an optimal balance between risk and return.
Dividends
- Avantis® U.S. Small Cap Value ETF 1.70%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.52%
The dividend yields from the ETFs contribute to the portfolio's total yield of 1.52%, adding a component of income to the growth-focused strategy. While the yields are relatively modest, they offer a passive income stream that can compound over time or provide liquidity. Investors might consider the role of dividends in their overall return expectations, especially in growth-oriented portfolios where reinvestment can accelerate compounding.
Ongoing product costs
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.07%
The portfolio's total expense ratio (TER) of 0.07% is impressively low, maximizing the potential for net returns. Lower costs are crucial for long-term growth, as they reduce the drag on performance. This lean cost structure is a significant strength of the portfolio, ensuring that more of the investment's growth is retained by the investor.
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