A growth-focused portfolio with strong reliance on US equities and moderate international exposure
Report created on Jun 9, 2025Risk profile
5/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 60.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 30.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 10.00%
This portfolio predominantly consists of US equity ETFs, with a significant 60% allocation to the Vanguard S&P 500 ETF and 30% to the Invesco S&P 500® Momentum ETF, emphasizing large-cap and momentum strategies within the US market. The remaining 10% is allocated to the Vanguard Total International Stock Index Fund ETF Shares, providing some international diversification. The heavy tilt towards US equities and the S&P 500 in particular, coupled with a modest international presence, suggests a strategy that leans heavily on the performance of the US market while attempting to capture some global equity growth.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 17.95%, with a maximum drawdown of -32.96%. This indicates a high growth potential but also a significant risk, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 32.0 days highlights the portfolio's volatility and the importance of staying invested during critical market movements to capture gains.
Projection
The Monte Carlo simulation, using 1,000 scenarios, projects a wide range of outcomes with a median (50th percentile) increase of 743.8% in value, illustrating robust growth potential. However, the wide gap between the 5th and 67th percentiles (110.5% to 1,049.4%) underscores the uncertainty and risk inherent in the portfolio. This reinforces the need for investors to have a high risk tolerance and a long-term investment horizon to weather volatility.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no diversification into bonds, cash, or alternative investments. This allocation is consistent with its growth profile but increases volatility and risk. Diversifying across more asset classes could reduce risk without significantly compromising growth potential, especially during market downturns where non-equity assets might offer stability.
Sectors
- Technology 27%
- Financials 16%
- Consumer Discretionary 12%
- Telecommunications 11%
- Industrials 9%
- Health Care 8%
- Consumer Staples 7%
- Energy 3%
- Utilities 3%
- Real Estate 2%
- Basic Materials 2%
Sector allocation is concentrated in Technology, Financial Services, and Consumer Cyclicals, making up over half of the portfolio. This concentration in growth-oriented sectors aligns with the portfolio's overall growth strategy but also increases susceptibility to sector-specific downturns. Broadening sector exposure could mitigate this risk while still aligning with growth objectives.
Regions
- North America 90%
- Europe Developed 4%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 1%
Geographic exposure is heavily skewed towards North America (90%), with minimal allocations to developed Europe, Asia, and other regions. This concentration benefits from the robust performance of US equities but limits exposure to potential growth in emerging and developed markets outside the US. Increasing international diversification could enhance returns and reduce geographic risk.
Market capitalization
- Mega-cap 49%
- Large-cap 34%
- Mid-cap 16%
- Small-cap 1%
The portfolio's focus on Mega (49%) and Big (34%) cap stocks emphasizes stability and growth potential of large, established companies. While this may reduce the volatility associated with smaller companies, it also may limit opportunities for higher growth rates that small and mid-cap stocks can offer. A more balanced market cap allocation could provide a better risk-reward trade-off.
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.
Optimizing this portfolio using the Efficient Frontier could identify a mix of assets that offers the best possible risk-return ratio based on historical data. However, it's important to note that past performance is not indicative of future results, and the Efficient Frontier is a theoretical concept that assumes historical correlations and volatilities will continue, which may not always be the case. Adjusting the asset allocation could potentially increase diversification and reduce risk without significantly compromising growth potential.
Dividends
- Invesco S&P 500® Momentum ETF 0.50%
- Vanguard S&P 500 ETF 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.22%
The portfolio's dividend yield, averaging 1.22%, contributes to its total returns, with the international ETF offering the highest yield. While dividends are not the primary focus of this growth-oriented portfolio, they provide a passive income stream and can offer some cushion during market dips. Balancing growth and income-generating assets could further optimize returns.
Ongoing product costs
- Invesco S&P 500® Momentum ETF 0.13%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.06%
With a total expense ratio (TER) of 0.06%, the portfolio benefits from low management costs, enhancing net returns over the long term. Low costs are crucial for long-term growth, as they compound significantly over time. The portfolio's focus on low-cost ETFs is a prudent strategy, ensuring more of the investment's growth is retained by the investor.
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