Growth-oriented portfolio with high exposure to US large-cap stocks and minimal diversification

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 suits an investor with a high risk tolerance and a focus on long-term capital growth. Ideal for those comfortable with significant exposure to the stock market's fluctuations, particularly within the US. The investor likely prioritizes higher potential returns over stability and is prepared to weather periods of high volatility, especially in the technology sector.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    70.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    20.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    10.00%

This portfolio is heavily weighted towards US large-cap stocks, with a 70% allocation in the Vanguard S&P 500 ETF, 20% in the Schwab U.S. Large-Cap Growth ETF, and the remaining 10% in the Avantis® U.S. Small Cap Value ETF. The concentration in large-cap stocks, particularly within the technology sector, suggests a strong growth orientation but comes with low diversification across asset classes and geographies. This structure exposes the portfolio to significant market movements, particularly within the US stock market.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 16.29%, with a maximum drawdown of -34.76%. Notably, 90% of the returns have been generated on just 15 days, indicating that the portfolio's performance is highly sensitive to market swings. Such volatility underscores the growth-focused nature of the investments but also highlights the potential for significant short-term losses.

Projection Info

Monte Carlo simulations, which use historical data to forecast future outcomes, suggest a wide range of potential performances for this portfolio. With 985 out of 1,000 simulations showing positive returns and a median projected increase of 694.9%, the forward-looking outlook appears optimistic. However, the broad spread from the 5th to the 67th percentile underscores the high level of risk associated with this growth strategy.

Asset classes Info

  • Stocks
    100%

The portfolio is solely invested in stocks, lacking exposure to other asset classes such as bonds, real estate, or commodities. This singular focus on equities enhances the portfolio's growth potential but also increases its vulnerability to stock market downturns. Diversifying across asset classes could provide a buffer during periods of stock market volatility.

Sectors Info

  • Technology
    32%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is heavily skewed towards technology, which comprises 32% of the portfolio. While this sector has historically delivered strong growth, it can also be highly volatile, as seen in recent market corrections. Financial services and consumer cyclicals are also significant but to a lesser extent. This sector concentration further amplifies the portfolio's risk and return profile.

Regions Info

  • North America
    99%
  • Europe Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Asia Developed
    0%
  • Africa/Middle East
    0%

Geographically, the portfolio is almost entirely invested in North America (99%), with no exposure to international markets. This geographic concentration limits diversification benefits and increases susceptibility to US market-specific risks. Considering global equities could potentially reduce risk through geographical diversification.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    28%
  • Mid-cap
    15%
  • Small-cap
    6%
  • Micro-cap
    5%

The portfolio's market capitalization breakdown shows a strong preference for mega and large-cap stocks, which constitute 74% of the allocation. While these companies tend to be more stable than their smaller counterparts, the portfolio may miss out on the higher growth potential often found in small and micro-cap stocks.

Redundant positions Info

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

The high correlation between the Vanguard S&P 500 ETF and the Schwab U.S. Large-Cap Growth ETF indicates overlapping investments that do not contribute to diversification. This redundancy can amplify losses during market downturns, as both ETFs are likely to move in tandem.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.17%

Dividend yields across the portfolio average 1.17%, with the highest yield from the Avantis® U.S. Small Cap Value ETF at 1.80%. While dividends contribute to the portfolio's total return, the primary focus remains on capital appreciation given the growth orientation of the underlying investments.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from relatively low costs, with a total expense ratio (TER) of 0.05%. Lower costs can significantly enhance long-term returns by minimizing the drag on performance. This cost efficiency is a positive aspect of the portfolio's construction.

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.

Optimizing the portfolio for a better risk-return profile could involve reducing the overlap between the Vanguard S&P 500 ETF and the Schwab U.S. Large-Cap Growth ETF. Diversifying across more asset classes and geographies could also improve the portfolio's resilience against market volatility, aligning it more closely with the Efficient Frontier.

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