A growth tilted diversified ETF portfolio concentrated in US large caps with modest bond allocation

Report created on Aug 2, 2024

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.

Positions

The portfolio is dominated by broad US equity ETFs complemented by growth and dividend ETFs with a small bond sleeve and minimal cash. Weightings place 20% each in two core broad US ETFs plus multiple overlapping large-cap growth funds and a 5% bond holding. This structure produces an overall equity tilt far above a typical balanced benchmark that mixes stocks and bonds more evenly. For practical management it’s advisable to consolidate redundant exposures into a smaller set of core holdings to preserve the intended risk profile while keeping rebalancing simple and transparent.

Growth Info

Using a hypothetical $10,000 initial investment and the stated CAGR of 14.79% (CAGR measures average annual growth similar to an average speed over a long trip) that amount would roughly quadruple over ten years illustrating a strong historical up-cycle. The portfolio’s max drawdown of -32.39% shows it experienced significant stress during downturns. Comparing to broad benchmarks helps contextualize this result: higher historical returns here also came with deeper drops. Historical figures are useful for understanding past behavior but cannot predict future returns, so they should inform but not dictate allocation decisions.

Projection Info

A Monte Carlo simulation runs many randomized paths using historical return patterns to show a range of possible future outcomes; it’s like simulating many different weather forecasts based on past climate. With 1,000 simulations this portfolio had a median (50th) end value of about 455% of the start and a 5th percentile outcome near 81.7%, and 995 simulations showed positive returns. These projections indicate a high probability of gains but also a tail of poor outcomes; simulated paths depend on historical inputs and assumptions so they should be treated as scenario guidance not guarantees.

Asset classes Info

  • Stocks
    94%
  • Bonds
    5%
  • Cash
    1%

Asset class allocation is heavily equity oriented at about 94% stocks, 5% bonds and 1% cash. That equity weight is much higher than conventional balanced allocations which often sit around 60% stocks 40% bonds for risk mitigation. High equity share increases long-term growth potential but raises volatility and sequence risk for shorter horizons. A practical recommendation is to align the stock bond mix with the intended time horizon and spending needs—adding bonds or other low-correlation assets can dampen drawdowns and smooth outcomes without abandoning growth objectives.

Sectors Info

  • Technology
    34%
  • Financials
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Health Care
    8%
  • Industrials
    8%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

Sector exposure is notably tech heavy at roughly one third of the portfolio followed by financials and consumer cyclicals. Sector concentration matters because industries cycle differently; for example tech-heavy portfolios can be more sensitive to interest rate moves and valuation swings. The current sector mix matches common growth tilts but reduces the benefits of diversification during sector-specific shocks. To improve resilience consider trimming concentrated sector bets or adding noncorrelated sectors to reduce sensitivity to any single industry without losing the portfolio’s long-term growth intent.

Regions Info

  • North America
    82%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic exposure is strongly North America focused at about 82% leaving modest developed international and scarce emerging market representation. Geographic diversification spreads political economic and currency risks across regions; heavy home bias can increase exposure to single-country macro events. For a globally minded strategy adding more developed ex‑US and emerging market exposure can lower single-country concentration and capture different growth cycles. Keep in mind international allocations can increase return variability in the short term while potentially improving risk adjusted returns over long horizons.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    29%
  • Mid-cap
    16%
  • Small-cap
    3%
  • Micro-cap
    1%

Market capitalization is skewed to very large stocks with Mega and Big caps totaling about 74% while mid small and micro caps contribute the balance. Large-cap focus typically brings higher liquidity, more stable cash flows and lower volatility than smaller caps but can limit exposure to higher long-term growth potential that smaller companies sometimes deliver. Investors seeking additional return potential might modestly increase mid and small cap exposure, while those prioritizing stability could maintain the large-cap tilt—either choice should reflect time horizon and tolerance for short-term drawdowns.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Growth Index Fund ETF Shares
    Vanguard Total World Stock Index Fund ETF Shares
    Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

Several core equity ETFs in the portfolio move closely together creating a highly correlated cluster. Correlation measures how assets move in relation to each other like how two boats on the same current tend to rise and fall together. High correlation reduces diversification benefits especially during market stress because overlapping exposures can all drop at once. The clear recommendation is to reduce redundant holdings and keep one or two diversified core funds while using distinct satellite positions for specific tilts; this preserves desired bets while improving true diversification.

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.

Efficient Frontier optimization identifies portfolios that offer the best expected return for a given level of risk using only the current asset set and their historical relationships. Think of it as plotting the best tradeoffs between speed and fuel efficiency for different cars. Before running optimization it’s crucial to remove overlapping highly correlated ETFs because they provide little new information and can distort the frontier. Once holdings are consolidated optimization can help suggest allocation shifts among the remaining assets to improve the portfolio’s risk return profile while keeping objectives and constraints in focus.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total World Stock Index Fund ETF Shares 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.30%

The portfolio’s overall yield is modest around 1.3% with higher yields coming from the bond and dividend ETFs. Dividends and interest contribute to total return and can offer income or serve as a buffer in weak markets. For investors seeking income, the current yield may be low relative to income-focused benchmarks; for growth-oriented investors a low yield is acceptable because capital appreciation is the main return source. Consider whether income needs exist—if so reweighting toward higher-yielding assets or increasing the bond sleeve could better match objectives while accepting the tradeoff in growth.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

Fund expense ratios are exceptionally low with a weighted total expense ratio near 0.04% (TER is the ongoing fee charged by funds similar to the running cost of owning a vehicle). Low costs are a strong positive because fees compound and materially reduce long-term returns if high. Maintaining a low-cost core is recommended while ensuring any consolidation choices do not increase tax friction. Regularly review trading commissions tax impacts and platform fees to keep effective costs minimal; small savings in expense ratios can translate to meaningful improvements in long-term outcomes.

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