Growth-focused portfolio with a strong lean towards US equities and minimal international exposure
Report created on Jun 12, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 90.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 10.00%
The portfolio is heavily weighted towards the Vanguard S&P 500 ETF at 90%, with the remaining 10% in the Vanguard Total International Stock Index Fund ETF Shares. This composition indicates a strong preference for US equities, aligning with a growth-oriented investment strategy but limiting geographical diversification. The asset allocation is entirely in stocks, underscoring a high growth potential but also a higher risk profile, particularly given the absence of fixed income or alternative asset classes which could provide a buffer during market volatility.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.43%, with a maximum drawdown of -33.97%. The days contributing to 90% of returns number just 29, highlighting the portfolio's performance is significantly influenced by a few key days. This volatility underscores the portfolio's risk level but also its potential for high returns. Compared to a balanced portfolio, this growth profile is expected but requires an investor comfortable with significant market fluctuations.
Projection
Utilizing Monte Carlo simulations, which forecast future performance based on historical data, the portfolio shows a wide range of outcomes. The 50th percentile outcome suggests a potential 263.6% increase, while the 5th and 67th percentiles indicate a wider possible performance spectrum. It's crucial to note that while these simulations provide a broad view of potential outcomes, they cannot predict future market conditions or guarantee returns.
Asset classes
- Stocks 100%
The portfolio's 100% allocation to stocks, without any allocation to cash, bonds, or other asset classes, underscores a high-risk, high-reward strategy. This singular focus on equities enhances growth potential but also increases susceptibility to market downturns. Diversifying across asset classes could mitigate risk without significantly compromising growth potential.
Sectors
- Technology 30%
- Financials 15%
- Health Care 11%
- Consumer Discretionary 10%
- Telecommunications 9%
- Industrials 8%
- Consumer Staples 6%
- Energy 3%
- Utilities 3%
- Real Estate 2%
- Basic Materials 2%
Sector allocation is concentrated in technology, financial services, and healthcare, which are sectors typically associated with high growth. This sector concentration, while potentially boosting returns, also exposes the portfolio to sector-specific risks. A more balanced sector distribution could provide a smoother return profile, especially during sector-specific downturns.
Regions
- North America 90%
- Europe Developed 4%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 1%
Geographically, the portfolio is heavily skewed towards North America (90%), with minimal exposure to other regions. This concentration in a single market enhances exposure to US economic conditions while limiting potential benefits from global diversification. Expanding international exposure could reduce geographic risk and tap into growth opportunities in other markets.
Market capitalization
- Mega-cap 47%
- Large-cap 34%
- Mid-cap 18%
- Small-cap 1%
The portfolio's market capitalization breakdown shows a preference for mega and large-cap stocks, which are typically less volatile than smaller companies. This allocation supports the portfolio's growth objectives while providing some level of stability. However, incorporating a broader range of market caps could further diversify risk and potentially uncover additional growth avenues.
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.
Regarding risk vs return optimization, the current allocation suggests a focus on maximizing returns, primarily through US equities. While this strategy aligns with growth objectives, incorporating the Efficient Frontier concept could identify adjustments to achieve a more optimal risk-return balance. This might include diversifying across more asset classes or adjusting sector and geographic exposures to enhance portfolio efficiency.
Dividends
- Vanguard S&P 500 ETF 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.46%
The portfolio yields a total dividend of 1.46%, with the international component offering a higher yield. While dividends are not the primary focus of this growth-oriented strategy, they contribute to total return and can provide a modest income stream or be reinvested for compounding growth. Balancing growth and income-generating assets could enhance the portfolio's yield without significantly compromising its growth potential.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.03%
The portfolio benefits from low costs, with a Total Expense Ratio (TER) of 0.03%. This efficiency is commendable, as lower costs directly translate to better net returns over time. Maintaining a focus on cost efficiency is crucial, especially when considering any portfolio adjustments or additional investments.
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