Growth-oriented portfolio with a strong focus on large-cap U.S. equities and moderate diversification

Report created on Apr 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards large-cap U.S. equities, with the Vanguard S&P 500 ETF making up 55% and the Schwab U.S. Large-Cap Growth ETF at 20%. This composition suggests a focus on established, stable companies, which typically offer lower volatility compared to smaller firms. However, the portfolio's limited exposure to small-cap stocks and international markets may leave it vulnerable to domestic market fluctuations. Consider incorporating more diverse asset types to mitigate risk and enhance potential returns.

Growth Info

Historically, the portfolio has performed well, with a CAGR of 14.58%. This indicates strong growth potential, especially in bullish market conditions. However, the maximum drawdown of -33.91% highlights susceptibility to market downturns. Comparing this to a benchmark like the S&P 500, which has shown similar drawdowns, suggests that while the portfolio is robust, it shares common vulnerabilities with the broader market. Maintaining a balanced approach could help manage risks during volatile periods.

Projection Info

The Monte Carlo simulation, which uses historical data to forecast future outcomes, reveals a promising median return of 462.8%. However, it's important to note that past performance does not guarantee future results. The simulation shows a wide range of potential outcomes, emphasizing the inherent uncertainty in investing. To improve reliability, consider stress-testing the portfolio under various market conditions and adjusting allocations to enhance resilience against adverse scenarios.

Asset classes Info

  • Stocks
    100%

With 100% allocation in stocks, the portfolio lacks diversification across asset classes, which could increase risk during market downturns. A more balanced portfolio might include bonds or alternative investments to cushion against equity market volatility. Comparing the portfolio's allocation to a typical balanced benchmark reveals a heavier reliance on equities, suggesting a need for diversification to achieve a more stable risk-return profile.

Sectors Info

  • Technology
    35%
  • Financials
    12%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is heavily concentrated in technology, which comprises 35% of the allocation. While this sector has driven significant growth, it also introduces volatility, particularly during interest rate hikes. A more balanced sector allocation could provide stability and reduce risk. Diversifying into sectors like consumer staples or utilities might help mitigate the impact of tech sector swings and align the portfolio more closely with broader market benchmarks.

Regions Info

  • North America
    89%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Japan
    2%

The portfolio's geographic allocation is heavily skewed towards North America, with 89% exposure. This concentration limits diversification benefits and increases vulnerability to U.S. market-specific risks. Expanding exposure to regions like Europe or emerging markets can enhance diversification and tap into growth opportunities outside the U.S. Aligning geographic allocation with global benchmarks could provide a more balanced risk-return profile.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    29%
  • Mid-cap
    16%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio leans heavily towards mega and big-cap stocks, comprising 74% of the allocation. While these companies offer stability, the limited exposure to small and micro-cap stocks may restrict growth potential. A more balanced allocation across market capitalizations could enhance diversification and capture opportunities in smaller, potentially higher-growth companies. This approach aligns with practices seen in more diversified benchmarks.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The Schwab U.S. Large-Cap Growth ETF and Vanguard S&P 500 ETF are highly correlated, which may limit diversification benefits. High correlation means these assets tend to move together, reducing the portfolio's ability to withstand market fluctuations. Consider replacing one of these ETFs with a less correlated asset to improve diversification and reduce risk. This adjustment can enhance the portfolio's resilience against market downturns.

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 could benefit from optimization using the Efficient Frontier concept, which seeks the best possible risk-return ratio. Currently, the high correlation between some assets limits diversification benefits. By adjusting allocations to include less correlated assets, the portfolio can potentially achieve a more efficient risk-return balance. This optimization focuses on reallocating existing assets rather than adding new ones, ensuring alignment with growth objectives.

Dividends Info

  • Pacer US Small Cap Cash Cows 100 ETF 1.30%
  • Schwab U.S. Large-Cap Growth ETF 0.50%
  • VanEck Semiconductor ETF 0.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.34%

The portfolio's dividend yield is 1.34%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the highest yield at 3.10%. Dividends can provide a steady income stream, which is beneficial for investors seeking regular returns. However, the overall yield is modest, suggesting a focus on growth rather than income. To increase yield, consider adding higher-dividend-paying assets, balancing growth and income objectives.

Ongoing product costs Info

  • Pacer US Small Cap Cash Cows 100 ETF 0.59%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is impressively low at 0.11%, supporting better long-term performance by minimizing costs. Low costs are crucial for maximizing net returns over time. This efficient cost structure aligns with best practices in portfolio management. Maintaining this low-cost approach while ensuring adequate diversification and risk management will continue to support the portfolio's growth objectives.

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