Growth-focused portfolio with a strong emphasis on US stocks and low diversification

Report created on Aug 15, 2025

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

Growth Investors

This portfolio is best suited for an investor with a high risk tolerance and a long-term investment horizon. The focus on growth through U.S. equities, particularly in sectors like technology and financial services, suggests an investor comfortable with significant market fluctuations in pursuit of higher returns. It's ideal for those who prioritize capital appreciation over income and are prepared to withstand periods of high volatility.

Positions

This portfolio is heavily weighted towards two ETFs, with 70% in the Invesco S&P 500® Momentum ETF and 30% in the Schwab U.S. Broad Market ETF. The allocation reflects a strong preference for growth, focusing entirely on U.S. equities. While this concentration in the U.S. market and particularly in certain sectors like technology and financial services may offer high growth potential, it also exposes the portfolio to increased volatility and sector-specific risks. The lack of international exposure and minimal diversification across asset classes could limit the portfolio's resilience to market shifts.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 20.94% with a maximum drawdown of -32.17%. These figures suggest a high-return, high-risk profile, consistent with its growth orientation. The significant returns are primarily driven by a few days of exceptional performance, highlighting the portfolio's sensitivity to market movements. While past performance is impressive, it's essential to remember that it may not guarantee future results, especially given the concentrated risk.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of potential outcomes. The 50th percentile projection suggests a substantial increase, but such simulations have limitations. They cannot predict unforeseen market changes or external economic factors. Investors should consider these projections as one of many tools, not a definitive forecast.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely invested in stocks, offering no asset class diversification. This singular focus on equities, while potentially lucrative during bull markets, leaves the portfolio vulnerable during market downturns. Diversifying across different asset classes, such as bonds or real estate, could provide a buffer against volatility and reduce overall risk.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Consumer Discretionary
    13%
  • Telecommunications
    13%
  • Industrials
    9%
  • Consumer Staples
    8%
  • Health Care
    4%
  • Utilities
    3%
  • Energy
    2%
  • Real Estate
    2%
  • Basic Materials
    1%

Sector allocation leans heavily towards technology and financial services, with significant positions in consumer cyclicals and communication services. This concentration can amplify returns in favorable conditions but also increases susceptibility to sector-specific downturns. Diversifying across a broader range of sectors could mitigate this risk and stabilize portfolio performance over time.

Regions Info

  • North America
    100%

The portfolio's geographic allocation is entirely focused on North America, missing out on potential opportunities in developed and emerging markets elsewhere. This lack of global diversification can limit growth potential and increase exposure to U.S.-specific economic risks. Expanding into international markets could provide additional growth avenues and reduce geographic concentration risk.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    32%
  • Mid-cap
    15%
  • Small-cap
    2%
  • Micro-cap
    1%

The distribution across market capitalizations shows a preference for mega and big-cap stocks, which tend to be more stable than smaller companies but may offer lower growth potential. Including a broader mix of mid, small, and micro-cap stocks could enhance growth prospects and diversification, albeit with increased volatility.

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.

Sharpe ratios in this chart use the active CMA risk-free rate of 2.00% annualized.

Click on the colored dots to explore allocations.

Considering the portfolio's current composition and risk profile, optimizing for the Efficient Frontier could improve the risk-return ratio. This might involve rebalancing asset allocations to achieve a more efficient diversification, potentially enhancing returns for the same level of risk. However, such optimization should align with the investor's risk tolerance and investment horizon.

Dividends Info

  • Schwab U.S. Broad Market ETF 1.20%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 0.78%

The portfolio's dividend yield stands at 0.78%, reflecting a moderate income component. Given the growth orientation, the focus is not on income but on capital appreciation. However, incorporating higher-yielding assets could offer a steady income stream and reduce reliance on market appreciation for returns.

Ongoing product costs Info

  • Schwab U.S. Broad Market ETF 0.03%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.10%

With a total expense ratio (TER) of 0.10%, the portfolio is cost-efficient, which is beneficial for long-term growth. Keeping costs low is crucial for enhancing net returns, especially in a growth-focused portfolio where every percentage point counts towards compounding gains.

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