A growth-focused portfolio with strong U.S. exposure and moderate small-cap value allocation

Report created on Apr 4, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of three ETFs: Vanguard S&P 500 ETF (60%), Avantis U.S. Small Cap Value ETF (20%), and Vanguard Total International Stock Index Fund ETF (20%). This structure leans heavily on U.S. equities, particularly large-cap stocks, while also including a small-cap value component and international exposure. Compared to a typical growth benchmark, this allocation is well-balanced, offering a blend of stability and growth potential. To enhance diversification, consider increasing exposure to other asset classes like bonds or commodities, which could help mitigate risks during market downturns.

Growth Info

Historically, the portfolio has shown strong performance with a CAGR of 12.25%. This growth rate outpaces many standard benchmarks, indicating robust returns over time. However, the portfolio experienced a significant maximum drawdown of -36.31%, reflecting its vulnerability to market volatility. This level of drawdown is typical for a growth-oriented portfolio, but it's crucial to remain aware of such risks. Consider maintaining a cash reserve or diversifying further to cushion against potential future downturns.

Projection Info

The Monte Carlo simulation, which uses historical data to forecast future performance, shows a wide range of potential outcomes. With a 50th percentile projection of a 243.5% increase, the portfolio exhibits strong growth potential. However, the 5th percentile indicates a possible -24.8% decline, highlighting inherent risks. While simulations provide valuable insights, they are not guarantees. Regularly reviewing and adjusting the portfolio based on market conditions and personal goals can help optimize outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks (99%), with a minimal cash position (1%). This allocation aligns with a growth-oriented strategy, providing significant exposure to equity markets. However, the lack of bonds or alternative investments may increase volatility. While the stock-heavy approach can yield high returns, it also exposes the portfolio to greater market fluctuations. Diversifying into other asset classes could enhance stability, especially during economic downturns.

Sectors Info

  • Technology
    23%
  • Financials
    19%
  • Consumer Discretionary
    12%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Energy
    6%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio's sector allocation is diverse, with notable concentrations in technology (23%) and financial services (19%). Such a distribution mirrors common growth benchmarks, offering exposure to sectors with high growth potential. However, tech-heavy portfolios may experience greater volatility during periods of interest rate hikes. Balancing sector weights by increasing exposure to defensive sectors like healthcare or consumer staples could help mitigate risks and improve overall stability.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily concentrated in North America (81%), with limited exposure to other regions. While this focus has historically benefited from the strong performance of U.S. markets, it may limit potential gains from emerging markets or other international opportunities. Expanding geographic diversification could reduce dependency on U.S. market performance and capture growth in other regions, providing a more balanced global investment approach.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    27%
  • Mid-cap
    14%
  • Small-cap
    11%
  • Micro-cap
    10%

The portfolio's market capitalization distribution is well-rounded, with significant exposure to mega-cap (37%) and big-cap (27%) stocks, complemented by medium (14%), small (11%), and micro (10%) caps. This mix provides a balance between stability and growth potential. Small and micro-cap stocks can offer higher returns but come with increased volatility. Maintaining this distribution supports diversification, but monitoring the balance is key to aligning with changing market conditions.

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.

The portfolio's current allocation appears to align well with the Efficient Frontier, offering a favorable risk-return ratio. This means the portfolio is likely optimized for its current asset mix, balancing growth potential with acceptable risk levels. While the Efficient Frontier provides valuable insights, it's based solely on historical data and current assets. Regular reviews and adjustments, considering personal goals and market changes, can help maintain this optimization over time.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.78%

With a total dividend yield of 1.78%, the portfolio offers moderate income potential. The Vanguard Total International Stock Index Fund ETF contributes the highest yield at 3.10%, enhancing income diversification. While dividends are not the primary focus of a growth strategy, they can provide a steady income stream and help cushion against market volatility. Reinvesting dividends can further compound growth over time, maximizing long-term returns.

Ongoing product costs Info

  • 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) 0.08%

The portfolio's total expense ratio (TER) is impressively low at 0.08%, reflecting cost-effective management. Low costs are crucial for long-term performance, as they minimize the drag on returns. The Vanguard S&P 500 ETF's expense ratio of 0.03% is particularly noteworthy, offering broad market exposure at minimal cost. Continuously monitoring and managing costs ensures that more of your investment returns stay in your pocket, supporting better long-term outcomes.

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