Balanced growth focus with high exposure to US stocks and low international diversification

Report created on Jul 21, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is split evenly between the Vanguard Small-Cap Value Index Fund ETF Shares and the Vanguard S&P 500 ETF, indicating a strategic balance between small-cap value exposure and large-cap growth potential. This composition suggests a growth-oriented strategy with a tilt towards value investing in the small-cap space. However, the diversification is limited, focusing heavily on the US market with minimal international exposure. The portfolio's asset allocation is solely in stocks, with no presence in bonds or alternative investments, which could increase volatility.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 12.79%, which is impressive. However, the maximum drawdown of -38.72% highlights potential volatility and risk, especially during market downturns. The days contributing to 90% of returns are notably few, indicating that a small number of high-return days significantly impact overall performance. This factor underscores the portfolio's reliance on market timing and highlights the risk of missing out on these key days.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, projects a wide range of outcomes, from a 5th percentile of 31.6% to a 67th percentile of 580.5%. This suggests significant uncertainty in future performance, though the majority of simulations result in positive returns. The annualized return across all simulations is 13.84%, slightly above the historical CAGR, indicating potential for continued growth but with considerable risk.

Asset classes Info

  • Stocks
    100%

The portfolio's asset class allocation is entirely in stocks, which can offer high growth potential but also comes with increased volatility compared to portfolios that include bonds or other asset classes. This allocation suits investors with a higher risk tolerance and a longer time horizon, who can withstand market fluctuations in pursuit of higher returns.

Sectors Info

  • Technology
    21%
  • Financials
    17%
  • Industrials
    13%
  • Consumer Discretionary
    12%
  • Health Care
    9%
  • Telecommunications
    6%
  • Real Estate
    6%
  • Consumer Staples
    5%
  • Utilities
    4%
  • Basic Materials
    4%
  • Energy
    3%

Sector allocation is diversified across technology, financial services, industrials, and consumer cyclicals, among others, which mitigates some risk by spreading investments across different areas of the economy. However, the heavy weighting in technology and financial services sectors could lead to higher volatility, given these sectors' sensitivity to economic changes and interest rate fluctuations.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographic exposure is heavily concentrated in North America (99%), with negligible exposure to international markets. This concentration in a single region increases the portfolio's vulnerability to local market downturns and misses out on potential growth opportunities in emerging and developed markets outside the US.

Market capitalization Info

  • Small-cap
    31%
  • Mega-cap
    23%
  • Mid-cap
    21%
  • Large-cap
    18%
  • Micro-cap
    7%

The mix of market capitalizations, with significant allocations to small, mega, and medium-cap stocks, offers a balance between the growth potential of smaller companies and the stability of larger firms. However, the portfolio may still face higher volatility due to the significant small-cap exposure, which tends to fluctuate more than larger-cap stocks.

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 portfolio's expected return is slightly below the optimal portfolio's expected return of 14.58% at a similar risk level. This suggests room for optimization, possibly by adjusting asset allocation or diversifying further internationally, to achieve a better risk-return balance without significantly altering the portfolio's risk profile.

Dividends Info

  • Vanguard Small-Cap Value Index Fund ETF Shares 2.10%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.65%

The dividend yield of the portfolio averages 1.65%, contributing to total returns. While not the primary focus, these dividends provide a steady income stream, which can be particularly beneficial during market downturns or for investors seeking income in addition to capital appreciation.

Ongoing product costs Info

  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) of 0.05% is impressively low, enhancing long-term returns by minimizing costs. Low costs are crucial for maximizing investment efficiency, especially in a growth-focused portfolio where every percentage point of return matters.

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