A broadly diversified equity portfolio with a strong US tilt and a focused healthcare growth tilt

Report created on Nov 4, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is a pure equity mix with about two thirds in broad US stocks, a quarter in international stocks, and a sizable tilt toward healthcare. Compared with a typical balanced benchmark that usually holds bonds and cash, this mix is more growth‑oriented and relies entirely on stock market behavior. That matters because without bonds, portfolio swings can be larger in tough markets, even if long‑term growth potential is higher. Keeping the overall equity structure is fine if the goal is long‑term growth, but it could help to think about whether some stabilizing assets are needed as time horizon shortens or if income needs become more important.

Growth Info

Historically, a 13% compound annual growth rate (CAGR) means $10,000 would have grown to roughly $34,000 over 10 years, which is very strong by most standards. CAGR is like your average speed on a long road trip, smoothing out ups and downs. The max drawdown of about -33% shows that at one point, the portfolio temporarily lost a third of its value, which is normal for an all‑stock approach but emotionally challenging. This history lines up with equity benchmarks and suggests the structure has worked well. Still, past performance only shows what happened under previous conditions, not what must happen next.

Projection Info

The Monte Carlo results, using 1,000 simulations and an annualized return of about 12.35%, paint a wide range of possible futures. Monte Carlo is basically a “what if” engine that reruns many alternate market histories based on past patterns to see where the portfolio might land. The 5th percentile ending at about 65% of the starting value shows real downside risk, while the median and higher percentiles suggest strong growth potential. This distribution is consistent with an aggressive equity mix. These projections can be a useful planning tool, but they’re driven by historical data and assumptions, so they can’t capture unexpected structural shifts or new economic regimes.

Asset classes Info

  • Stocks
    100%

All assets here are in the stock category, with 0% in bonds, cash, or alternatives. That’s very different from a typical “balanced” mix, which might hold 40–60% in bonds to reduce volatility. A 100% equity approach maximizes exposure to company growth and can compound strongly over long periods, especially for investors who can ignore short‑term noise. On the flip side, this structure will feel every bear market more intensely and may require more emotional resilience. If stability, capital preservation, or shorter‑term goals are important, layering in some non‑stock assets over time could help smooth the ride without completely sacrificing long‑term growth potential.

Sectors Info

  • Health Care
    28%
  • Technology
    22%
  • Financials
    13%
  • Industrials
    8%
  • Consumer Discretionary
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is well spread overall, with technology, financials, industrials, and consumer areas all present, but healthcare stands out at about 28%, clearly above typical broad market weights. This creates a focused tilt toward a defensive growth area that often holds up relatively well in slowdowns but can be sensitive to regulation and policy changes. Tech exposure around the low‑20% range is broadly in line with major benchmarks, which is a solid sign for diversification. Keeping this healthcare overweight is fine if it’s intentional, but it’s worth checking that such a large tilt still matches your comfort level and that no single sector ends up dominating risk during specific cycles.

Regions Info

  • North America
    77%
  • Europe Developed
    10%
  • Japan
    4%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, around 77% is in North America, with the rest spread across developed Europe, Japan, and smaller allocations to emerging regions. This lines up pretty closely with global market weights, where US and North American companies dominate major indexes, so it’s a good sign from a diversification standpoint. The smaller but meaningful slice in Europe and Asia helps reduce dependence on any single economy. The allocation to emerging and less‑developed markets is modest, which keeps risk moderate but slightly limits potential diversification benefits from faster‑growing regions. Overall, this geographic mix is well‑balanced and aligns closely with global standards for a home‑biased US investor.

Market capitalization Info

  • Large-cap
    40%
  • Mega-cap
    39%
  • Mid-cap
    18%
  • Small-cap
    2%

The portfolio leans heavily toward mega and large‑cap companies, with nearly 80% in those segments and only a small slice in mid and small caps. Large and mega caps tend to be more stable, widely followed, and often less volatile than small companies, which supports a smoother ride than a small‑cap‑heavy approach. The trade‑off is slightly less exposure to the higher growth potential and diversification benefits smaller firms sometimes bring. This structure is very similar to mainstream indexes, which is a strong indicator of sensible construction. If desired, a slightly higher mid or small‑cap presence could modestly increase growth potential, but it would also nudge volatility higher.

Redundant positions Info

  • iShares Core MSCI Total International Stock ETF
    Vanguard Total International Stock Index Fund ETF Shares
    High correlation

Most holdings move broadly in line with global equity markets, and there’s a particularly high overlap between the two international stock ETFs. Correlation describes how investments move together; when correlation is high, diversification benefits are smaller during big market swings. Having both international funds that track similar segments doesn’t add much extra risk protection, even though it looks diversified on paper. The overall equity mix is still broadly diversified across sectors and regions, which is a plus. However, trimming redundant positions that behave almost identically could simplify the structure and make it easier to see where risk is really coming from, without sacrificing meaningful diversification.

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 sits firmly in the high‑return, high‑volatility corner of the Efficient Frontier. The Efficient Frontier is the set of portfolios that offer the best possible trade‑off between risk (ups and downs) and return, using the same building blocks. Since all holdings are equities, it’s already near the “fast lane” of that curve, with little room to cut volatility without also cutting expected return unless additional asset types are added. Within the current menu, fine‑tuning mainly means simplifying overlapping positions and checking that the healthcare tilt matches your preferences, while recognizing that “efficient” here refers to risk‑return, not necessarily income or other personal goals.

Dividends Info

  • iShares Core Dividend Growth ETF 2.00%
  • iShares Core MSCI Total International Stock ETF 2.80%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Health Care Select Sector SPDR® Fund 1.60%
  • Weighted yield (per year) 1.71%

The overall dividend yield of about 1.71% is modest, reflecting a growth‑tilted equity portfolio where returns are expected to come more from price appreciation than from income. Individual holdings, like the dividend growth ETF and international funds, offer somewhat higher yields than the main US fund, helping to slightly boost income while still focusing on quality companies that can grow payouts over time. Dividends can act like a small “paycheck” that can be reinvested to compound faster or used for spending in later years. For someone prioritizing long‑term growth rather than high current income, this blended yield level is quite reasonable and consistent with global equity benchmarks.

Ongoing product costs Info

  • iShares Core Dividend Growth ETF 0.08%
  • iShares Core MSCI Total International Stock ETF 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Health Care Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.06%

The average total expense ratio around 0.06% is impressively low and a real strength of this portfolio. Costs work like slow leaks in a tire; the less you lose each year to fees, the more of the market’s return you keep. These fee levels are well below typical mutual fund averages and line up with best‑in‑class index products. Over decades, shaving even 0.3–0.5 percentage points off annual costs can translate to many thousands of dollars of extra wealth. One possible improvement would be reducing overlapping funds to avoid paying twice for very similar exposure, but overall, the current fee structure strongly supports long‑term compounding.

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