A growth tilted stock heavy portfolio with strong US focus and very low investment costs

Report created on Nov 3, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is almost fully in stocks through broad index ETFs, with three big “core” funds taking up roughly three quarters of the total. That creates a strong tilt to general stock market growth, with smaller slices in small caps, value, international, and dividends. Compared with a typical balanced benchmark that mixes stocks and bonds, this setup is clearly more aggressive, even though it’s labeled “balanced.” The core building blocks are high quality and this structure is generally aligned with common index-based approaches. However, because several funds track very similar baskets of companies, simplifying overlapping positions could keep the same strategy while making it easier to manage and monitor risk.

Growth Info

Historically, this mix has delivered a very strong compound annual growth rate (CAGR) of about 15.5%. CAGR is just the “average yearly speed” of growth, smoothing out the ups and downs like calculating a car’s average speed on a long trip. A typical blended stock benchmark would have been lower over the same period, so this result is clearly on the strong side. The worst drop, or max drawdown, of around -26% shows meaningful volatility but less than some all‑equity growth portfolios. It’s important to remember that past performance doesn’t guarantee future results; markets move in cycles, and the last decade has been especially kind to US and tech‑tilted portfolios.

Projection Info

The Monte Carlo simulation, which runs 1,000 “what if” scenarios using historical patterns, shows a wide range of possible futures. Monte Carlo is basically a way to roll the dice many times on returns, volatility, and sequence, to see best‑case and worst‑case paths. In these simulations, the median outcome of around 475% over the full horizon reflects strong expected growth, while the 5th percentile at about 73% shows that disappointing results are still possible. The annualized return across simulations, around 15%, lines up with history but is not a promise. These projections are useful for setting expectations, but they’re only estimates built from the past and can miss regime changes or unusual future shocks.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The asset class split is extremely stock heavy at 99% equities and just 1% cash, which is far more aggressive than a typical “balanced” benchmark that usually holds a substantial bond slice. Stocks offer higher long‑term growth potential but can swing sharply in recessions or crises, while bonds and cash usually act as stabilizers and “shock absorbers.” This all‑equity tilt is well aligned with investors focused on long horizons and who can ride out big drawdowns without panic selling. Anyone needing smoother returns, near‑term withdrawals, or more protection in downturns might consider introducing a modest stabilizing allocation while keeping equities as the main engine for long‑term growth.

Sectors Info

  • Technology
    34%
  • Consumer Discretionary
    12%
  • Financials
    12%
  • Telecommunications
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is clearly tilted toward technology at around one‑third of the portfolio, with meaningful positions in consumer cyclicals, financials, and communication services. This sector mix is quite close to broad US market benchmarks, which are also tech heavy, so it’s not an unusual tilt. Tech‑driven allocations often shine when innovation and low interest rates support growth, but they can experience sharper drops when rates rise or when sentiment turns against high‑growth companies. The positive side is that this composition is in line with modern index standards and offers good participation in key drivers of the global economy. Keeping an eye on whether tech creeps even higher over time can help avoid concentration risk.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, about 90% sits in North America, mainly the US, with small allocations to developed markets overseas and a modest slice in emerging markets. This pattern is very similar to many US‑based portfolios and to common cap‑weighted benchmarks, where the US dominates global market value. The upside is strong exposure to a deep, transparent market that’s been a long‑term outperformer. The trade‑off is less diversification if US stocks underperform other regions for a stretch. The existing developed and emerging markets positions are a good start and align with global diversification principles. Gradually nudging non‑US exposure higher over time could further balance regional risks without changing the overall growth profile.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    29%
  • Mid-cap
    16%
  • Small-cap
    10%
  • Micro-cap
    6%

By market cap, the portfolio is anchored in mega and large companies, with nearly 70% in the biggest firms and the rest spread across mid, small, and even some micro caps. Market cap just means the size of a company by stock market value, like comparing big established brands to smaller up‑and‑coming businesses. This mix mirrors broad index norms and is nicely balanced: large caps bring stability and liquidity, while smaller caps add growth potential and diversification. The dedicated small‑cap and small‑cap value slices are a thoughtful way to boost exposure to areas often underrepresented in headline indexes. Overall, this structure is well‑aligned with widely accepted long‑term equity allocation practices.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The portfolio holds both an S&P 500 ETF and a total US stock market ETF, which are highly correlated—meaning they tend to move almost the same way day to day. Correlation is just a measure of how similarly two investments behave; when it’s very high, owning both doesn’t add much diversification. In this case, the overlap means there are effectively two different wrappers around a very similar US large‑cap core. The overall risk profile remains sound, but simplifying by trimming one of the overlapping funds could make the portfolio easier to understand and manage. That kind of clean‑up keeps the same general exposure while reducing redundancy and potential confusion.

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.

On a risk‑return basis, this mix sits in a high‑return, high‑volatility zone that could likely be nudged closer to an Efficient Frontier. The Efficient Frontier is the set of portfolios that offer the best possible return for each level of risk using the same ingredients, like finding the sweet spot of a recipe without adding new ingredients. Here, efficiency gains probably come from cleaning up overlap and fine‑tuning weights among existing funds, not by fundamentally changing strategy. “More efficient” doesn’t always mean more diversified in every dimension; it simply means squeezing the most expected return out of the current risk level, or lowering risk for the same return.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Vanguard Small-Cap Index Fund ETF Shares 1.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.22%

The overall yield of about 1.2% is relatively modest, reflecting the growth‑oriented nature of the holdings and the heavy tilt to US large caps and tech. Yield is the cash income from dividends as a percentage of the portfolio value, like rent on a property but for stocks. Some slices, such as the dividend‑focused and international funds, boost income somewhat with yields above 2%. This setup suits investors who prioritize growth over current cash flow but still want a bit of income. For those who eventually want higher cash distributions, gradually increasing the weight of income‑oriented holdings later in life can raise yield without completely sacrificing growth potential.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The total expense ratio (TER) of about 0.08% is impressively low, especially given the number of individual ETFs. TER is the annual fee charged by funds, like a small ongoing management cost taken from returns. Over decades, even small differences in fees compound into meaningful sums, so keeping costs low is a major advantage. This cost profile lines up very well with best practices and is one of the strongest aspects of the setup. If simplification happens in the future, it would be wise to maintain this low‑fee mindset and avoid higher‑cost options that don’t clearly improve diversification, tax efficiency, or risk control.

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