Concentrated Costco exposure with balanced fund diversifier and strong risk adjusted historic performance
Report created on Mar 24, 2026Risk profile
- Secure Speculative
The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.
Diversification profile
- Focused Diversified
The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.
Positions
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CO Costco Wholesale Corp
COST - US22160K1051 60.00% -
TR T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
TRRFX - US74149P8124 40.00%
This portfolio is extremely concentrated, with 60% in a single stock and 40% in a near-retirement target-date mutual fund. Structurally, that means one company drives most of the day‑to‑day moves, while the fund quietly spreads the rest across bonds, cash, and diversified equities. Composition matters because what you own, and how much of it, explains most of your risk and return over time. Here, the blend pairs a focused “bet” with a broad, conservative anchor. The key takeaway is that overall risk looks balanced on paper, but real-world outcomes will still be heavily shaped by the fortunes of that single company.
Growth
Historically, the portfolio has done very well: an initial $1,000 growing to $5,557 since 2016, versus $3,796 for the U.S. market and $3,036 for global stocks. The CAGR, or Compound Annual Growth Rate, is 18.63%, meaning average yearly growth far above the market’s 14.32% and 11.78%. Max drawdown, the worst peak‑to‑trough drop, was -25.79%, notably milder than the roughly -34% seen in the benchmarks, which is impressive given the single‑stock tilt. This combination of higher return and smaller worst loss is unusually strong, but it relies on past data; markets change, so future results can differ a lot from this history.
Projection
The Monte Carlo simulation projects possible 10‑year futures by randomly “replaying” patterns from past returns to create 1,000 different paths. It shows all simulations ending positive, with an average annualized return of 17.69% and a wide range of outcomes: roughly tripling at the low end (5th percentile) to more than tenfold growth at the median and above. Monte Carlo is helpful for visualizing uncertainty rather than producing a prediction. Its big limitation is that it assumes the future behaves somewhat like the past, which may not hold if company fundamentals or interest rates change dramatically. Treat these results as illustrative of risk and spread of outcomes, not as guarantees.
Asset classes
- Stocks 60%
By asset class, the portfolio looks like 60% direct stock and 40% wrapped in a near‑retirement fund that itself mixes bonds, cash, and diversified equities. Compared with a typical “balanced” allocation, which might split stocks and bonds more evenly, this leans somewhat growth‑oriented but still has a meaningful stabilizing fixed‑income component through the fund. Asset allocation matters because stocks usually drive growth and volatility, while bonds and cash help cushion downturns. This setup is reasonably aligned with a moderate risk profile: plenty of equity upside from the single stock, plus a multi‑asset ballast that has likely helped soften past market shocks and smooth returns.
Sectors
- Consumer Staples 60%
- No data 40%
Sector‑wise, the portfolio is overwhelmingly tied to a single consumer defensive company, with the remaining 40% categorized as “unknown” because the mutual fund’s top holdings are mixed. Consumer defensive businesses often sell everyday essentials, which can be more resilient when the economy slows. However, heavy focus on one such company still introduces business‑specific risk: changes to competition, margins, or regulation can matter more than broad sector trends. A well‑balanced sector mix usually spreads exposure across multiple types of businesses so no single theme dominates. Here, the defensive character is a plus, but the real story remains single‑company dependence rather than broad sector diversification.
Regions
- North America 88%
- % Developed Markets 38%
- Europe Developed 6%
- % Emerging Markets 2%
- Asia Emerging 2%
- Japan 2%
- Asia Developed 1%
Geographically, the portfolio leans heavily on North America at 88%, with smaller slices in Europe, Japan, and emerging markets via the mutual fund. That North American bias is common for U.S.‑based investors and, in recent years, has been rewarded as U.S. markets outperformed many others. Relative to global benchmarks that hold more non‑U.S. exposure, this setup is more domestically focused but not exclusively so. The benefit is familiarity and alignment with the world’s largest equity market; the trade‑off is more sensitivity to U.S. economic and policy cycles. The modest exposures to developed and emerging markets still help add some global diversification without dominating overall risk.
Market capitalization
- Mega-cap 76%
- Large-cap 13%
- Mid-cap 9%
- Small-cap 2%
- Micro-cap 1%
By market capitalization, the portfolio is clearly tilted toward larger, established companies: about 76% mega cap, 13% big, 9% medium, and only a small sliver in small and micro caps. Large and mega caps tend to be more stable, with deeper resources and more diversified businesses, which can reduce the chance of extreme individual failures. Smaller companies, while potentially higher growth, generally come with bumpier rides. This size mix fits nicely with a balanced risk profile: it favors dependable giants as the main drivers, with limited exposure to more volatile smaller names. That helps keep portfolio behavior more predictable across different parts of the economic cycle.
True holdings
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CO Costco Wholesale Corp 60.00%
-
0 T ROWE PRICE LIMITED DURATION INFLATION FOCUSED BOND FUND 7.17%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
-
1 T ROWE PRICE NEW INCOME FUND INC 6.43%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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2 T ROWE PRICE INTERNATIONAL BOND FUND - USD HEDGED 2.45%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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3 T ROWE PRICE VALUE FUND INC 2.36%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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4 T ROWE PRICE GROWTH STOCK FUND INC 2.26%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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5 T ROWE PRICE HEDGED EQUITY FUND 1.67%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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6 T ROWE PRICE US LARGE-CAP CORE FUND INC 1.60%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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7 T ROWE PRICE DYNAMIC GLOBAL BOND FUND 1.46%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
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8 T ROWE PRICE US TREASURY MONEY FUND INC 1.46%
Part of fund(s):- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
- Top 10 total 86.86%
On a look‑through basis, the underlying exposures confirm very high concentration in Costco at 60% of the total, with the rest spread mainly across T. Rowe Price bond and equity funds. Overlap within the mutual fund’s holdings is modest at the top‑10 level, but the single‑stock position already creates the primary concentration. Hidden concentration can occur when the same company appears in multiple funds, but here Costco is held directly, not via the fund. Because only the fund’s top positions are captured, smaller overlapping names may be missed. The practical takeaway: the true story is still “one dominant stock plus a diversified, mostly fixed‑income‑tilted fund” rather than many independent bets.
Factors
Factor exposure shows strong tilts toward low volatility, quality, and momentum, with moderate value and yield, and neutral size. Factors are like underlying “traits” of investments—such as being stable, fast‑rising, or cheap—that help explain performance over time. A pronounced low‑volatility tilt suggests the holdings, on average, have historically moved less than the market, while high quality points to stronger balance sheets and profitability. Momentum exposure means many holdings have been recent winners, which can continue to do well in trending markets but may struggle in sharp reversals. Overall, this factor mix tends to behave defensively yet has participated strongly in past uptrends, which aligns well with the risk classification.
Risk contribution
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Costco Wholesale Corp
Weight: 60.00% 87.0% -
T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND
Weight: 40.00% 13.0%
Risk contribution data makes it clear that Costco, at 60% of the weight, contributes almost 87% of total portfolio volatility. Risk contribution measures how much each holding adds to overall ups and downs, which can differ a lot from its percentage weight. Here, a 1.45 risk‑to‑weight ratio means Costco drives disproportionately more risk than its size alone would suggest, while the mutual fund, with a ratio of 0.33, dampens volatility relative to its weight. This concentrated risk is the main structural vulnerability: if the single stock suffers a company‑specific setback, overall portfolio swings could be much larger than the “balanced” label might imply.
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 the risk‑return chart, this portfolio sits on the efficient frontier, meaning that given these two holdings, its mix achieves one of the best return levels for its risk. The Sharpe ratio, which measures return per unit of volatility, is 1.06—solid, though a different weighting could reach 1.23 at lower risk. There is also a “same‑risk optimized” mix that could, in theory, boost expected return substantially at similar volatility. The implication: the current allocation is already efficient but not mathematically optimal. Simply reweighting between Costco and the retirement fund could potentially improve either risk control or return expectations without adding any new investments.
Dividends
- Costco Wholesale Corp 0.50%
- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND 5.60%
- Weighted yield (per year) 2.54%
The portfolio’s overall dividend yield is about 2.54%, combining a modest 0.50% from Costco with a more generous 5.60% yield from the retirement fund. Dividends are the cash payments companies and funds distribute, and over long periods they can form a big part of total return, especially when reinvested. Here, the income stream appears reasonable for a balanced profile—not ultra‑high, which might signal riskier yield chasing, but high enough to contribute meaningfully. The fund’s higher yield likely reflects its bond and short‑term holdings. For investors who appreciate some ongoing income without sacrificing growth potential, this yield level is quite supportive of long‑term compounding.
Ongoing product costs
- T. ROWE PRICE RETIREMENT 2005 FUND T. ROWE PRICE RETIREMENT 2005 FUND 0.49%
- Weighted costs total (per year) 0.20%
Estimated total ongoing costs (TER) of about 0.20%, with the mutual fund itself at 0.49%, are impressively controlled for an actively managed retirement product paired with a single stock. Costs matter because they come off returns every year; over long horizons, even small differences can compound into large dollar amounts. In this setup, the direct stock has no fund fee, and the retirement fund’s internal cost is reasonable for its active management and asset‑mixing role. This aligns well with good practice: keeping expenses modest so more of the portfolio’s growth flows through to you rather than being absorbed by management charges.
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