Growth-focused portfolio with high exposure to US large-cap stocks and low diversification

Report created on Oct 16, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards US large-cap stocks, with a 100% allocation to equities and a significant concentration in technology, financial services, and communication services sectors. The use of three ETFs, two of which are from Schwab focusing on broad market and large-cap growth, and one from Invesco targeting S&P 500 momentum, indicates a strategy leaning heavily on growth-oriented large-cap US stocks. The overlap between the ETFs, especially those from Schwab, suggests redundancy in asset allocation.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 20.96% and a maximum drawdown of -32.38%, the portfolio has demonstrated robust growth with significant volatility. The performance is impressive, but the days contributing to 90% of returns being concentrated in just 39 days highlight the portfolio's reliance on short-term gains, which could be risky for investors with a lower risk tolerance.

Projection Info

The Monte Carlo simulation, with all simulations showing positive returns and a median projected increase of 1,288.3%, suggests a strong growth potential. However, it's important to remember that Monte Carlo simulations are based on historical data and assumptions that may not accurately predict future market conditions. This forward projection should be viewed as one of many tools in assessing potential portfolio performance.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks, without any allocation to bonds, real estate, or alternative investments, indicates a high-risk, high-reward strategy. While this can offer significant growth opportunities, especially in bullish markets, it lacks the protective diversification that other asset classes can provide during downturns.

Sectors Info

  • Technology
    38%
  • Financials
    15%
  • Telecommunications
    14%
  • Industrials
    8%
  • Consumer Discretionary
    8%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Energy
    2%
  • Real Estate
    1%
  • Basic Materials
    1%

The sectoral allocation shows a heavy tilt towards technology, financial services, and communication services. This concentration can lead to higher volatility, particularly if these sectors underperform. Diversifying across a broader range of sectors could help mitigate sector-specific risks and stabilize returns over time.

Regions Info

  • North America
    100%

The geographic allocation is entirely focused on North America, missing out on potential growth opportunities and diversification benefits from developed and emerging markets outside the US. This geographical concentration increases the portfolio's exposure to US market risks.

Market capitalization Info

  • Mega-cap
    50%
  • Large-cap
    33%
  • Mid-cap
    14%
  • Small-cap
    2%

The market capitalization breakdown, with a dominant focus on mega and big cap stocks, aligns with the portfolio's growth and risk profile. While these companies often offer more stability and less volatility than smaller caps, the portfolio may miss out on the higher growth potential that smaller companies can provide.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Schwab U.S. Broad Market ETF
    High correlation

The high correlation between the Schwab U.S. Large-Cap Growth ETF and the Schwab U.S. Broad Market ETF indicates redundancy, contributing little to diversification. Reducing overlap by reallocating assets could enhance the portfolio's risk-adjusted returns by introducing non-correlated assets that behave differently under various market conditions.

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.

Before optimizing, it's crucial to address the portfolio's lack of diversification and the redundancy of highly correlated assets. By diversifying across more asset classes, sectors, and geographies, and reducing overlap between the ETFs, the portfolio could achieve a more favorable risk-return profile. Optimization should focus on enhancing diversification to manage risk while maintaining the growth trajectory.

Dividends Info

  • Schwab U.S. Broad Market ETF 1.10%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Weighted yield (per year) 0.68%

The portfolio's overall dividend yield of 0.68% is relatively low, reflecting its growth focus over income generation. Investors seeking cash flow from their investments might consider a higher allocation to assets with higher dividend yields. However, for growth-oriented investors, reinvesting these dividends could compound future growth.

Ongoing product costs Info

  • Schwab U.S. Broad Market ETF 0.03%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.08%

With a total expense ratio (TER) of 0.08%, the portfolio benefits from relatively low costs, which is commendable. Lower costs mean more of the investment's return is retained by the investor, supporting better long-term performance. This is particularly important in growth-focused strategies where compound growth plays a critical role.

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