A cautious yet growth-oriented portfolio with a strong emphasis on US equities
Report created on Nov 24, 2025Risk profile
3/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
AV American Century ETF Trust
AVGV - US0250722164 15.00% -
JA Janus Detroit Street Trust - Janus Henderson AAA CLO ETF
JAAA - US47103U8457 15.00%
This portfolio is predominantly invested in US equities, with a significant 70% allocation to the Vanguard S&P 500 ETF, reflecting a strong bias towards large-cap stocks. The remaining 30% is split evenly between the American Century ETF Trust and the Janus Henderson AAA CLO ETF, introducing a mix of sector-specific and credit-oriented strategies. This composition suggests a cautious approach to risk, aiming for steady growth through well-established companies, while the inclusion of CLOs and sector-specific ETFs adds a layer of diversification and potential for higher yield.
Growth
With a Compound Annual Growth Rate (CAGR) of 17.11% and a maximum drawdown of -16.04%, the portfolio has demonstrated robust growth with relatively moderate downturns. The performance is notably impressive, considering the cautious risk profile. The days contributing to 90% of returns highlight the impact of significant market movements on portfolio performance, underscoring the importance of staying invested through market cycles for achieving long-term growth.
Projection
The Monte Carlo simulation, with 1,000 runs, projects a wide range of outcomes, from a 234.3% increase at the 5th percentile to a 775.1% increase at the 67th percentile. This suggests a strong likelihood of positive returns, with an annualized return across all simulations of 15.45%. However, it's important to remember that these projections, based on historical data, cannot guarantee future performance. They offer a useful perspective on potential volatility and return scenarios.
Asset classes
- Stocks 85%
- Bonds 15%
The portfolio's asset allocation leans heavily towards stocks (85%), with a smaller bond component (15%), reflecting a strategy that prioritizes growth while employing bonds to mitigate volatility. This allocation is typical for investors with a moderate risk tolerance, aiming to balance the pursuit of returns with the need for stability. The absence of cash or alternative investments further underscores the portfolio's focus on long-term growth.
Sectors
- Technology 27%
- Financials 12%
- Consumer Discretionary 10%
- Telecommunications 8%
- Industrials 7%
- Health Care 7%
- Consumer Staples 4%
- Energy 4%
- Basic Materials 2%
- Utilities 2%
- Real Estate 1%
Sector allocation is led by a 27% investment in technology, followed by financial services and consumer cyclicals. This sector spread indicates a growth-oriented strategy, as these sectors often lead market performance during economic expansions. However, the heavy concentration in technology could expose the portfolio to sector-specific risks, such as regulatory changes or market corrections. Diversifying into underrepresented sectors could help mitigate these risks.
Regions
- North America 79%
- Europe Developed 2%
- Japan 1%
- Asia Emerging 1%
- Asia Developed 1%
The geographic allocation is predominantly North American (79%), with minimal exposure to developed Europe, Japan, and emerging Asian markets. This concentration in the US market leverages the robust performance of American corporations but also exposes the portfolio to regional economic and political risks. Increasing exposure to international markets could enhance diversification and potentially tap into growth opportunities abroad.
Market capitalization
- Mega-cap 35%
- Large-cap 27%
- Mid-cap 17%
- Small-cap 4%
- Micro-cap 1%
The portfolio's market capitalization exposure is weighted towards mega (35%) and big (27%) cap stocks, with lesser allocations to medium, small, and micro caps. This bias towards larger companies is consistent with the portfolio's cautious risk profile, as these firms generally offer more stability and resilience during market downturns. However, incorporating a greater variety of market caps could improve diversification and capture growth in dynamic smaller companies.
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 current allocation demonstrates a well-thought-out balance between risk and return, closely aligning with the Efficient Frontier concept. This balance suggests that the portfolio is optimized for the highest possible return at the given level of risk. However, continuous reassessment is essential, as shifts in market dynamics and personal financial goals may necessitate reallocation to maintain this optimal balance.
Dividends
- American Century ETF Trust 2.10%
- Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 5.50%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.98%
The portfolio's average dividend yield of 1.98% contributes to its total return, with the Janus Henderson AAA CLO ETF offering a particularly high yield of 5.50%. This income stream can provide a buffer against market volatility and contribute to compounding growth over time. Considering the portfolio's cautious profile, maintaining a focus on dividend-yielding investments aligns with the strategy of balancing growth with income generation.
Ongoing product costs
- American Century ETF Trust 0.26%
- Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 0.21%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.09%
The total expense ratio (TER) of 0.09% is impressively low, enhancing net returns for the investor. The Vanguard S&P 500 ETF, with its minuscule expense ratio of 0.03%, is a major contributor to keeping overall costs down. Minimizing investment costs is crucial for long-term growth, as even small differences in fees can significantly impact compounded returns over time.
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