A focused approach on US equities with a strong dividend yield and growth potential

Report created on Aug 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is highly concentrated, with 90% invested in the Schwab U.S. Dividend Equity ETF and 10% in the Schwab U.S. Large-Cap Growth ETF. Such a composition suggests a strong preference for U.S. equities, particularly those offering dividends. The allocation leans heavily towards large-cap stocks, which typically offer more stability than their smaller counterparts but may limit potential for high growth rates seen in more diversified or aggressive portfolios. This concentration in a single asset class and geographic region, while simplifying the investment strategy, significantly reduces diversification.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 13.80%, which is impressive. However, the maximum drawdown of -32.97% indicates substantial volatility and potential risk, particularly for investors with lower risk tolerance. It's important to note that days contributing to 90% of returns were limited to 31, suggesting that the portfolio's performance is highly dependent on specific periods of significant gains. This could imply vulnerability to market fluctuations and emphasizes the need for a well-considered risk management strategy.

Projection Info

Monte Carlo simulations, which generate a range of outcomes based on historical data to estimate future performance, suggest a wide range of potential future values for this portfolio. With a median projected increase of 634.1% and 994 out of 1,000 simulations showing positive returns, the outlook seems generally positive. However, the reliance on historical data means these projections cannot guarantee future performance, especially considering the portfolio's low diversification and potential susceptibility to market shifts.

Asset classes Info

  • Stocks
    100%

The entire portfolio is invested in stocks, with no allocation to bonds, commodities, or alternative investments. This singular focus on equities enhances potential returns but also increases risk, particularly in market downturns. Diversifying across different asset classes can reduce volatility and provide a safety net during stock market declines.

Sectors Info

  • Energy
    18%
  • Consumer Staples
    17%
  • Health Care
    15%
  • Technology
    15%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Financials
    9%
  • Telecommunications
    5%
  • Basic Materials
    2%

The sector allocation shows a balanced exposure across energy, consumer defensive, healthcare, and technology sectors, each representing a significant portion of the portfolio. This sectoral balance can mitigate some risks associated with stock investing. However, the absence of investments in utilities and real estate sectors, and minimal exposure to basic materials, might limit opportunities to benefit from diversification across all economic cycles.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

With 99% of assets allocated in North America and a negligible 1% in developed Europe, the portfolio's geographic exposure is narrowly focused. This concentration in the U.S. market limits exposure to potential growth in emerging markets or diversification benefits from developed markets outside North America. Expanding geographic exposure could enhance returns and reduce volatility over the long term.

Market capitalization Info

  • Large-cap
    56%
  • Mid-cap
    31%
  • Mega-cap
    7%
  • Small-cap
    6%
  • Micro-cap
    1%

The emphasis on big (56%) and medium (31%) cap stocks, with minimal exposure to mega, small, and micro caps, indicates a conservative approach favoring established companies. While this may offer stability, incorporating a wider range of market caps could improve diversification and potential for growth, as smaller companies often outperform larger ones over the long term.

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.

While the portfolio demonstrates a strong yield and has historically performed well, its risk versus return profile could be enhanced through diversification across more asset classes and geographies. Employing the Efficient Frontier model could identify an allocation that offers a better risk-return ratio, potentially improving long-term outcomes without significantly increasing risk.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Weighted yield (per year) 3.46%

The portfolio's dividend yield is attractive, particularly from the Schwab U.S. Dividend Equity ETF. Dividends can provide a steady income stream and contribute to total returns, especially in volatile or declining markets. However, focusing too heavily on dividend-yielding stocks may lead to missed opportunities in high-growth sectors that reinvest earnings instead of paying dividends.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Weighted costs total (per year) 0.06%

The total expense ratio (TER) of 0.06% is impressively low, which is beneficial for long-term performance as lower costs translate directly into higher net returns for investors. This cost efficiency is a strong aspect of the portfolio, ensuring that more of the investment's returns are retained by the investor rather than being consumed by management fees.

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