Growth-focused portfolio with high exposure to US equities and emphasis on dividends and momentum
Report created on Dec 2, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 50.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 50.00%
This portfolio is evenly split between the Schwab U.S. Dividend Equity ETF and the Invesco S&P 500® Momentum ETF, indicating a strategic focus on growth through U.S. equities. The composition leans heavily towards stocks with a notable absence of bonds or alternative investments, which suggests a higher risk tolerance. The emphasis on dividend-yielding and momentum stocks within the U.S. market is designed to capitalize on both stable income and potential capital appreciation. However, the lack of diversity across asset classes and geographic regions could increase volatility and risk.
Growth
With a Compound Annual Growth Rate (CAGR) of 18.08% and a maximum drawdown of -31.83%, the portfolio has demonstrated strong growth potential albeit with significant volatility. The days contributing to 90% of returns being limited to 36 indicates that the portfolio's performance is highly concentrated in specific periods, which may imply risk from market timing. Comparing this performance to a diversified benchmark could help assess the balance between risk and return more effectively.
Projection
Monte Carlo simulations suggest a wide range of potential outcomes, with a median projected increase of 882.7%. While all simulations returned positive outcomes, the variance between the 5th and 67th percentiles underscores the portfolio's risk. It's crucial to remember that simulations use historical data and assumptions that may not predict future conditions accurately. Investors should consider these projections as one of many tools in evaluating potential risk and return.
Asset classes
- Stocks 100%
The portfolio's exclusive investment in stocks, without allocation to bonds, real estate, or cash equivalents, positions it for potentially higher returns, but also higher volatility. This concentration in one asset class reduces the potential benefits of diversification, which can help mitigate risk during market downturns. Diversifying across different asset classes may provide a more balanced risk-reward profile.
Sectors
- Technology 23%
- Financials 14%
- Consumer Staples 12%
- Energy 10%
- Health Care 10%
- Industrials 10%
- Telecommunications 9%
- Consumer Discretionary 7%
- Utilities 2%
- Real Estate 1%
- Basic Materials 1%
Sector allocation shows a heavy emphasis on technology, financial services, and consumer defensive stocks, which can offer growth and stability. However, the limited presence in sectors like real estate and basic materials, combined with the absence of international sectors, may limit opportunities for diversification and exposure to global growth trends. Considering a broader range of sectors could enhance the portfolio's resilience to sector-specific risks.
Regions
- North America 100%
The portfolio's geographic allocation is entirely focused on North America, specifically the U.S. market. This concentration enhances exposure to U.S. economic growth but also increases susceptibility to domestic market fluctuations and geopolitical risks. Expanding geographic diversification to include developed and emerging markets outside of the U.S. could potentially reduce volatility and tap into growth opportunities globally.
Market capitalization
- Large-cap 51%
- Mid-cap 23%
- Mega-cap 21%
- Small-cap 3%
- Micro-cap 1%
The portfolio's market capitalization breakdown, with a majority in big and mega-cap stocks, suggests a preference for established companies likely to offer stability and dividends. However, the minimal exposure to small and micro-cap stocks limits potential for high growth rates these companies can offer. Increasing exposure to smaller caps could enhance growth prospects but would also increase risk.
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 composition and performance, there's room for optimization towards the Efficient Frontier, which could potentially enhance the risk-return profile. Adjusting the asset allocation to include a broader mix of asset classes and geographic exposures might move the portfolio closer to this optimal balance. However, any changes should be aligned with the investor's risk tolerance and investment goals.
Dividends
- Schwab U.S. Dividend Equity ETF 3.70%
- Invesco S&P 500® Momentum ETF 0.60%
- Weighted yield (per year) 2.15%
With a total dividend yield of 2.15%, the portfolio provides a respectable income stream, which is a positive aspect for investors seeking regular income in addition to capital appreciation. The Schwab ETF's higher yield complements the growth orientation of the Invesco ETF, balancing income with potential for capital gains. Monitoring dividend performance and considering the impact of changes in dividend policies on overall returns is advisable.
Ongoing product costs
- Schwab U.S. Dividend Equity ETF 0.06%
- Invesco S&P 500® Momentum ETF 0.13%
- Weighted costs total (per year) 0.10%
The portfolio's total expense ratio (TER) of 0.10% is impressively low, which supports better long-term performance by minimizing the drag on returns caused by fees. This cost efficiency is a strength, particularly in a growth-focused strategy where every percentage point of return matters. Keeping costs low while seeking to optimize for growth and income is a sound approach.
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