A growth-focused portfolio with strong US exposure and moderate international diversification

Report created on Jan 11, 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 heavily weighted towards equities, with 99.56% in stocks and minimal allocations in cash, bonds, and other asset classes. This composition aligns with a growth-focused strategy, aiming for capital appreciation over time. The significant allocation to the Vanguard S&P 500 ETF at 55% indicates a strong preference for large-cap US equities. For a more balanced risk-return profile, consider adding more bonds or alternative assets to cushion against market volatility.

Growth Info

Historically, the portfolio has delivered a robust Compound Annual Growth Rate (CAGR) of 14.33%, outperforming many benchmarks. However, the maximum drawdown of -36.78% highlights potential risks during market downturns. This performance underscores the high-risk, high-reward nature of growth strategies. While past performance is not a guarantee of future results, maintaining diversification can help mitigate potential losses in adverse market conditions.

Projection Info

The Monte Carlo simulation, a statistical tool using historical data to forecast potential returns, indicates a favorable outlook. With 956 out of 1,000 simulations showing positive returns, the portfolio's median projected growth is 361.65%. However, it's crucial to remember that simulations are based on past data, and actual future performance can vary. Regularly reviewing and adjusting the portfolio can help adapt to changing market conditions and maintain alignment with investment goals.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation to equities at 99.56% is significantly higher than typical benchmarks, which often include more bonds for risk management. This heavy equity weighting can lead to higher volatility but also offers greater growth potential. To enhance diversification, consider increasing exposure to other asset classes like bonds or real assets, which can provide stability and reduce overall portfolio risk during market fluctuations.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    12%
  • Consumer Discretionary
    12%
  • Health Care
    8%
  • Telecommunications
    6%
  • Energy
    6%
  • Basic Materials
    6%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is well-distributed, with technology, financial services, and industrials being the largest sectors. This diversified sector exposure aligns with common benchmarks, providing a balanced approach to capturing growth opportunities across different industries. However, the technology sector's 21.68% allocation may lead to higher volatility, especially during periods of tech market corrections. Regular sector reviews can ensure alignment with market trends and personal risk tolerance.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Japan
    7%
  • Asia Emerging
    3%
  • Australasia
    2%
  • Asia Developed
    2%
  • Africa/Middle East
    1%

The portfolio is predominantly invested in North American equities at 72.26%, with moderate exposure to Europe and Japan. This geographic distribution aligns with a US-centric growth strategy but limits exposure to emerging markets. While this can reduce certain geopolitical risks, it may also miss out on higher growth opportunities in emerging regions. Consider gradually increasing allocations to underrepresented areas to enhance global diversification and capture potential growth.

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 can be optimized further using the Efficient Frontier, which suggests the best risk-return balance based on current assets. While the portfolio already shows a strong growth orientation, slight adjustments in asset allocation could enhance returns without significantly increasing risk. This involves reallocating within existing holdings to achieve an optimal mix, ensuring the portfolio remains aligned with growth objectives and risk tolerance.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.40%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.12%

With a total dividend yield of 2.12%, the portfolio offers a modest income stream, primarily from the Avantis® International Small Cap Value ETF and Vanguard Total International Stock Index Fund. Dividends can provide a steady income, especially during market downturns when capital appreciation may slow. For investors seeking higher income, consider reallocating towards higher-yielding assets, keeping in mind the trade-off between yield and growth potential.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) is a low 0.12%, which is excellent for long-term growth as lower fees compound over time. The Vanguard S&P 500 ETF's TER of 0.03% is particularly cost-effective. Keeping costs low is crucial for maximizing net returns. Regularly reviewing the cost structure and exploring lower-cost alternatives can help maintain this advantage, ensuring more of the portfolio's returns are retained.

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