A low cost equity heavy portfolio with strong US tilt and notable energy overweight

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This setup fits an investor with a moderately high risk tolerance who is focused primarily on long‑term growth rather than short‑term stability. They are comfortable riding through significant market drops, even 30%–40%, as long as the long‑run odds still favor strong compounding. Typical goals might include building retirement wealth, growing a nest egg over decades, or funding major future expenses far down the road. The investment horizon is likely 10 years or more, and the investor accepts that an equity‑only portfolio can feel uncomfortable during bear markets. They value simplicity, low fees, and broad market exposure, and they are less concerned with generating high current income from dividends.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    85.00%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares
    VEA - US9219438580
    10.00%
  • Vanguard Energy Index Fund ETF Shares
    VDE - US92204A3068
    5.00%

This portfolio is very simple and very equity heavy: about 99% in stocks, nearly all via three broad ETFs. Around 85% tracks a large US index, 10% adds developed markets outside the US, and 5% is a focused energy slice. Compared with a typical “balanced” benchmark, which often mixes stocks and bonds, this setup leans much more toward growth and volatility. That’s powerful for long-term wealth building but can feel rough in deep downturns. Someone using this structure might think about whether they truly want an all‑stock core, or whether slowly layering in some stabilizing assets over time would better match a “balanced” risk label.

Growth Info

Historically, this mix has delivered a very strong compound annual growth rate (CAGR) of about 15.9%. CAGR is just the smoothed “per year” growth rate, like averaging the speed of a car over a long road trip. Starting from $10,000, that rate would have grown to roughly $43,900 over 10 years, compared with much lower growth for a typical balanced stock‑and‑bond benchmark. The flip side is a max drawdown of about –34.6%, meaning at one point the portfolio dropped by roughly a third. That’s a big emotional test, so it’s good to check if such swings fit your comfort level, especially in future bear markets.

Projection Info

The Monte Carlo analysis, which runs 1,000 random “what if” market paths using historical patterns, points to a wide range of outcomes. Monte Carlo is like simulating many alternate timelines based on past return and volatility data. The median scenario (50th percentile) suggests more than quadrupling the starting value, while even the low‑end 5th percentile still shows a positive outcome around 35%. About 977 of 1,000 runs ended higher than the starting point, which aligns with the strong equity bias. But it’s important to remember these are simulations, not guarantees. Markets change, and future returns could be lower, so planning should still assume bumps along the way.

Asset classes Info

  • Stocks
    99%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

All the meaningful exposure here sits in one asset class: stocks. This makes the portfolio highly growth‑oriented and closely tied to equity market cycles. A more traditional balanced benchmark would hold a sizable slice of bonds or cash‑like instruments to cushion downturns and smooth returns. The current setup scores as only moderately diversified because, while it owns thousands of underlying companies, they’re all in the same broad category of risk. For someone comfortable with this, staying disciplined through volatility becomes the key job. Others might prefer adding a modest allocation to less volatile assets over time to reduce the size and frequency of account value swings.

Sectors Info

  • Technology
    31%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    8%
  • Energy
    8%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

Sector exposure is nicely spread across the major parts of the economy, but with a few clear tilts. Technology leads at about 31%, followed by financials, consumer cyclicals, communications, healthcare, and a noticeable 8% in energy thanks to the dedicated energy ETF. This sector mix is actually quite similar to common large‑cap benchmarks, which is a good sign for diversification, though the energy overweight adds some extra commodity and policy sensitivity. Tech‑heavy and cyclical sectors can be more volatile when interest rates move or growth expectations change. If the energy tilt and tech weight are intentional, that’s fine; if not, trimming concentrated sector bets could create a smoother ride.

Regions Info

  • North America
    91%
  • Europe Developed
    5%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%
  • Asia Emerging
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%
  • Latin America
    0%

Geographically, the portfolio is strongly US‑centric, with about 91% in North America and only a modest slice in developed markets abroad. That US focus has worked very well over the last decade, as American large‑caps have outpaced many other regions. It also means results are heavily tied to US economic policy, interest rates, and corporate earnings cycles. Common global benchmarks usually allocate more to international markets, providing a buffer if US stocks underperform for a stretch. Keeping a US tilt is reasonable, especially for a US‑based investor, but slowly nudging up non‑US developed exposure over time could increase diversification without dramatically changing the overall growth profile.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    35%
  • Mid-cap
    19%
  • Small-cap
    2%
  • Micro-cap
    0%

The portfolio leans toward larger companies, with around 43% in mega‑caps and 35% in big caps, plus a meaningful 19% in mid‑caps and a small slice in small caps. This structure lines up closely with broad market benchmarks, which is excellent for diversification and liquidity. Large and mega‑cap stocks tend to be more stable and widely researched, while mid and small caps can add some extra growth potential and volatility. This blend is a strong core for long‑term investing. If anything, the limited small‑cap exposure suggests that returns will likely track major headline indexes rather than swinging wildly with more speculative segments of the market.

Dividends Info

  • Vanguard Energy Index Fund ETF Shares 2.70%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 3.00%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 1.37%

The portfolio’s total dividend yield of roughly 1.37% is on the low‑to‑moderate side for an equity‑only strategy, reflecting its tilt toward large US growth companies. Dividends are cash payments from companies, and they can be a useful component of total return, especially for investors who like a bit of income. The developed markets and energy ETFs boost yield somewhat, with payouts around 3.0% and 2.7% respectively, but the dominant US index pulls the overall average down. For long‑horizon growth, this is perfectly reasonable and tax‑efficient. Those seeking more current income might, over time, consider modestly increasing exposure to higher‑yielding but still broadly diversified equity or income‑oriented holdings.

Ongoing product costs Info

  • Vanguard Energy Index Fund ETF Shares 0.10%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.04%

Costs here are impressively low, with a total expense ratio around 0.04%. Expense ratio is the annual fee taken by the fund manager, and shaving even a few tenths of a percent can add a lot to long‑term outcomes, much like avoiding a slow leak in a tire. Compared with many actively managed funds, these charges are tiny and strongly support compounding. This aligns with best practices seen in many evidence‑based portfolios, where low fees, broad diversification, and simple structures are preferred. With costs already this low, there isn’t much to optimize on the fee front; the bigger levers now are asset mix, risk level, and behavior during market swings.

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.

From a risk‑return standpoint, this portfolio sits high on the growth side and could likely be shifted closer to an “efficient frontier” while keeping the same basic building blocks. The efficient frontier is the set of portfolios that offer the most expected return for each level of risk, purely by changing the mix between existing holdings. Right now, the concentrated equity allocation and energy tilt increase volatility without much clear evidence of a better risk‑adjusted trade‑off. Slightly dialing down the riskiest slice and raising the share of more broadly diversified holdings could, in theory, maintain most of the return potential while softening drawdowns, all without introducing new products or complex strategies.

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