A growth focused portfolio leaning heavily on large US companies with moderate diversification across regions

Report created on Aug 23, 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 straightforward and growth oriented, with 60% in a broad US large‑cap tracker and 40% in a global equity ETF. That means it’s essentially 87%+ in stocks, 1% in cash, and a small residual “other,” which lines up with a balanced‑to‑growth profile rather than conservative. This clarity is a strength: simple portfolios are easier to understand and manage. The tilt toward equities means higher long‑term growth potential but more bumps along the way. If a smoother ride is desired, gradually building a small allocation to defensive assets like high‑quality bonds or cash‑like holdings could help, while keeping the core two‑fund structure intact.

Growth Info

Using a simple example, a $10,000 investment growing at the historical 16.14% CAGR (Compound Annual Growth Rate, the “average speed” of growth per year) would have risen very strongly over the last decade‑plus. That level of CAGR clearly outpaces typical broad benchmarks, which is consistent with a heavy equity tilt and a strong run from large US stocks. The max drawdown of about ‑28% shows that the portfolio can fall a lot during rough markets, even if it recovers later. This past success is encouraging, but it’s crucial to remember that such high returns are unlikely to persist forever and that past performance never guarantees future results.

Projection Info

The Monte Carlo analysis runs 1,000 simulated futures using historical return and volatility patterns, a bit like generating many possible “weather forecasts” for markets. The median outcome of about 693% and higher percentiles near 971% suggest strong potential growth if markets behave anything like the past. The 5th percentile at roughly 175% still shows a gain, which looks very optimistic and likely reflects a particularly strong historical data set for large US equities. It’s important to treat these numbers as rough guideposts, not promises. Future markets can behave very differently, especially if interest rates, inflation, or global growth shift away from historical norms.

Asset classes Info

  • US Equity
    76%
  • Stocks
    11%
  • Cash
    1%

Asset class exposure is dominated by equities: 76% is tagged as US equity plus another 11% as broader equity, with just 1% in cash. That’s more aggressive than a classic “balanced” mix, which often has a sizable bond portion. The upside is strong long‑term growth potential and a clear alignment with equity benchmarks, which helps keep tracking error low. The trade‑off is that portfolio swings will largely mirror stock market ups and downs. For someone wanting more resilience in deep market stress, gradually adding a sleeve of lower‑volatility assets over time could improve stability while preserving the simple, low‑maintenance structure.

Sectors Info

  • Technology
    30%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector exposure is nicely spread: technology around 30%, financials 16%, then a mix of consumer, industrials, communication, healthcare, and smaller allocations to energy, materials, utilities, and real estate. This looks similar to common global equity benchmarks, which is a strong sign of healthy diversification. The tech tilt has helped a lot in recent years but can increase volatility when interest rates rise or when growth stocks fall out of favour. Keeping this broadly market‑like sector mix is sensible; rather than making big sector bets, simple periodic rebalancing back to target weights can help avoid accidental over‑concentration after strong rallies in any one area.

Regions Info

  • North America
    88%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

Geographically, North America at 88% dominates, with modest exposure to Europe and small allocations to Japan and the rest of developed and emerging Asia. This home‑region and US tilt has been rewarding over the last decade, as US markets have outperformed many others. The flip side is concentration risk: if North American markets lag or face a prolonged downturn, the portfolio will feel it strongly. Increasing non‑North‑American exposure a bit closer to global market weights could reduce dependence on one region’s economic and policy environment while still preserving the strong core in familiar North American companies.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

By market cap, this portfolio is clearly large‑cap focused: 44% mega, 33% big, 18% medium, and only 3% small companies. This lines up closely with most major equity benchmarks and is generally positive, as large firms tend to be more stable, more liquid, and easier to analyze. The relatively low small‑cap allocation means less exposure to the higher risk/higher potential upside part of the market. Staying close to market‑cap weights is perfectly reasonable. If a bit more long‑term growth potential is desired (and volatility is acceptable), slightly increasing mid and small‑cap exposure could add diversification and return potential at the margin.

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 classic Efficient Frontier chart—where efficiency means the best possible trade‑off between risk and return using the available assets—this mix sits toward the higher‑risk, higher‑return side because both ETFs are very equity heavy. Within just these two funds, “optimizing” mostly means nudging their weights to better match your comfort with volatility rather than increasing diversification dramatically. For example, a slightly larger allocation to the more globally spread ETF might trim US concentration a bit. Any optimization based solely on historical risk and return has limits, though, because future market behaviour can differ, and efficiency does not automatically capture goals like income or capital preservation.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.66%

The overall dividend yield around 0.66% is relatively low, reflecting a growth‑tilted portfolio dominated by large US companies that often reinvest profits instead of paying them out. Dividends are the cash payments companies distribute to shareholders, and they can be useful for income‑focused investors or as a buffer in flat markets. For a growth‑oriented approach, a lower yield isn’t a problem, especially when capital gains have been strong. If reliable cash flow becomes a bigger priority down the road, gradually layering in higher‑yielding equity or more income‑oriented holdings could help, while still keeping the current broad‑market core as the main growth engine.

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