Growth-focused portfolio with a strong tilt towards large-cap US equities and minimal diversification
Report created on Jul 21, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 75.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 25.00%
This portfolio is heavily weighted towards the Vanguard S&P 500 ETF, making up 75% of the portfolio, with the remaining 25% allocated to the Avantis® U.S. Small Cap Value ETF. This composition indicates a strong focus on US equities, split between large-cap and small-cap stocks. The high allocation to the S&P 500 ETF suggests a preference for growth and stability offered by large-cap companies, while the small-cap ETF introduces potential for higher returns albeit with increased volatility. The portfolio's diversification is low, with all investments in stocks and a significant concentration in the US market.
Growth
With a Compound Annual Growth Rate (CAGR) of 16.73%, the portfolio has shown strong historical performance. However, the maximum drawdown of -36.92% indicates significant volatility, likely due to its heavy concentration in equities and the inherent risks of the stock market. The days contributing to 90% of returns being limited to 16.0 days highlights the portfolio's performance is heavily reliant on a few significant market movements, underscoring the importance of timing and market conditions in its success.
Projection
Monte Carlo simulations, which use historical data to project future performance, suggest a wide range of potential outcomes for this portfolio. With 974 out of 1,000 simulations showing positive returns, the portfolio's prospects look generally favorable. However, the significant spread between the 5th percentile (30.0% increase) and the 67th percentile (991.5% increase) underscores the high level of uncertainty and risk associated with this investment strategy.
Asset classes
- Stocks 100%
The portfolio is exclusively invested in stocks, with no allocation to bonds, cash, or other asset classes. This singular focus on equities enhances growth potential but also increases susceptibility to market volatility. A more diversified asset allocation could mitigate risk, especially during downturns, by including assets with lower correlation to the stock market.
Sectors
- Technology 26%
- Financials 18%
- Consumer Discretionary 12%
- Industrials 10%
- Health Care 8%
- Telecommunications 8%
- Energy 6%
- Consumer Staples 6%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Sector allocation is fairly diversified within the equity component, with technology (26%) and financial services (18%) being the most prominent. This sectoral distribution is reflective of the broader market composition, particularly of the S&P 500. However, the heavy weighting towards technology could expose the portfolio to sector-specific risks, such as regulatory changes or shifts in consumer behavior.
Regions
- North America 99%
The portfolio's geographic allocation is almost entirely focused on North America (99%), with no exposure to international markets. This concentration in the US market limits global diversification and the potential benefits of international exposure, such as reduced country-specific risk and access to growth opportunities in emerging markets.
Market capitalization
- Mega-cap 35%
- Large-cap 26%
- Mid-cap 14%
- Micro-cap 13%
- Small-cap 12%
The market capitalization breakdown shows a balanced exposure across mega (35%), big (26%), medium (14%), micro (13%), and small (12%) caps. This diversification by market cap is a positive aspect, as it combines the stability of large-cap stocks with the growth potential of small- and micro-cap stocks, potentially smoothing out volatility over time.
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.
Considering the portfolio's current allocation and the Efficient Frontier—an investment concept that aims for the highest returns for a given level of risk—it appears there's room for optimization. By adjusting the asset allocation to include a broader range of asset classes and international exposure, the portfolio could potentially achieve a more favorable risk-return profile, enhancing its efficiency.
Dividends
- Avantis® U.S. Small Cap Value ETF 1.70%
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.32%
The dividend yield of the portfolio stands at 1.32%, derived from the yields of the Vanguard S&P 500 ETF (1.20%) and the Avantis® U.S. Small Cap Value ETF (1.70%). While not the primary focus, these dividends contribute to the portfolio's total returns and provide a modest income stream, which could be reinvested for compounding effects.
Ongoing product costs
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.08%
The portfolio's total expense ratio (TER) of 0.08% is impressively low, maximizing the potential for net returns. Low costs are crucial for long-term investment success, especially in a growth-focused portfolio where every percentage point of return matters. This aspect of the portfolio is well-optimized, aligning with best practices for cost efficiency.
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