A growth tilted low cost portfolio with broad diversification and a strong value and dividend tilt

Report created on Nov 21, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is almost entirely in equities and real estate, with roughly a quarter in a total stock fund plus several value and dividend funds that target similar areas. This creates a clear tilt toward growth and income but also some overlap. Structure matters because owning multiple funds that behave alike may not reduce risk as much as the number of positions suggests. The overall mix is still well-balanced and aligns closely with global standards for a growth profile. Tightening the lineup by deciding which core funds are truly essential could keep the same strategy while making the portfolio easier to understand and maintain.

Growth Info

Historically, the portfolio shows a compound annual growth rate (CAGR) of about 12.8%, meaning an imaginary $10,000 could have grown to around $33,000 over the measured period. That’s strong, especially for a highly diversified mix, and compares favorably to many broad equity benchmarks over long stretches. However, the maximum drawdown of roughly -37% shows it can fall sharply in rough markets, which is typical for growth-tilted equity portfolios. Only 17 days made up 90% of returns, underscoring how a few big days drive long-term results. Staying fully invested and avoiding panic selling during downturns is crucial because missing those rare strong days can severely reduce long-run performance.

Projection Info

The Monte Carlo analysis used 1,000 simulations to estimate future paths based on historical behavior. Monte Carlo is like running thousands of “what if” futures, mixing good and bad markets randomly. The median (50th percentile) outcome shows more than tripling in value, while the pessimistic 5th percentile shows a small loss and the 67th percentile indicates very strong growth. An average annualized simulated return around 11.7% reflects the growth profile but is not a promise. These projections rely on past data and statistical assumptions, so reality can differ, especially if markets behave in unusual ways. Treat them as rough weather forecasts rather than guarantees when judging whether the risk and potential reward feel acceptable.

Asset classes Info

  • Stocks
    92%
  • Real Estate
    7%
  • Cash
    1%

Asset class exposure is dominated by stocks at 92%, with about 7% in real estate and a token 1% in cash. This allocation is clearly growth-oriented and typical of portfolios built for long time horizons. High equity exposure can deliver strong long-term growth but also larger short-term swings compared with mixes that include more bonds or cash. The added real estate slice introduces another income-oriented asset class that often behaves somewhat differently from traditional stocks, which helps diversification. This allocation is well-balanced and aligns closely with global standards for a growth profile, but anyone needing more stability might consider whether a modest shift toward lower-volatility assets would better match future cash needs.

Sectors Info

  • Technology
    20%
  • Financials
    16%
  • Real Estate
    13%
  • Industrials
    12%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Consumer Staples
    5%
  • Telecommunications
    5%
  • Utilities
    4%
  • Energy
    4%
  • Basic Materials
    3%

Sector exposure spans all 11 major sectors, with technology, financials, real estate, and industrials making up the largest pieces. Tech at around 20% is meaningful but not extreme, which helps avoid the heavy concentration sometimes seen in broad equity portfolios. This broad spread is beneficial because different sectors tend to lead or lag at various times; for example, tech-heavy portfolios may experience higher volatility during interest rate hikes, while defensives can hold up better in downturns. Your portfolio's sector composition matches benchmark data, which is a strong indicator of diversification. Keeping sector weights from drifting too far toward any single area over time can help maintain this balanced risk profile as markets move.

Regions Info

  • North America
    83%
  • Europe Developed
    5%
  • Asia Emerging
    4%
  • Asia Developed
    2%
  • Japan
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio leans heavily toward North America at about 83%, with smaller allocations to developed Europe, Asia, emerging markets, and other regions. This home bias is common for U.S.-based investors and has been rewarding in recent years as U.S. markets outperformed many others. However, non‑U.S. holdings still provide helpful diversification because overseas markets can perform differently when currencies, interest rates, or local economies shift. This allocation is well-balanced and aligns closely with global standards for a growth profile, though it is U.S.-tilted. Periodically checking whether the U.S. share has grown beyond comfort due to outperformance can help keep global exposure aligned with long-term preferences.

Market capitalization Info

  • Mid-cap
    30%
  • Large-cap
    27%
  • Mega-cap
    22%
  • Small-cap
    15%
  • Micro-cap
    5%

The portfolio has a healthy mix across company sizes: roughly 22% mega-cap, 27% big, 30% mid, 15% small, and 5% micro. This spread is broader than many cap-weighted benchmarks that tend to lean heavily into the largest companies. Smaller and mid-sized companies often bring higher growth potential but also more volatility and deeper drawdowns during recessions or market stress. This allocation is well-balanced and aligns closely with global standards while adding an intentional tilt toward smaller, value-leaning names. That tilt can be rewarding over long periods but may underperform large growth stocks in certain cycles, so it’s important that the added bumpiness still feels acceptable through different market environments.

Redundant positions Info

  • Vanguard Value Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Small-Cap Value Index Fund ETF Shares
    Vanguard Dividend Appreciation Index Fund ETF Shares
    Vanguard Mid-Cap Value Index Fund ETF Shares
    High correlation

Several core funds—total market, value, small-cap value, mid-cap value, and dividend appreciation—are highly correlated, meaning they tend to move in the same direction at similar times. Correlation in investing is a measure of how often assets rise and fall together. When many holdings are strongly correlated, the number of line items can give an illusion of diversification without actually reducing risk during big sell-offs. This portfolio still benefits from global and real estate exposure, but some U.S. equity positions likely overlap significantly. Focusing on a simpler set of broad funds that deliver the same tilts—such as value and dividends—could keep the strategy intact while reducing redundancy and making rebalancing more straightforward.

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 portfolio looks strong but could potentially move closer to the Efficient Frontier. The Efficient Frontier is the mix of available assets that offers the best expected return for each level of risk, like finding the most fuel‑efficient speed for a car. Because several U.S. equity funds are highly correlated, small allocation changes among them likely won’t change risk much. Before thinking about optimization, it may help to trim overlapping positions and define a simpler core. Optimization would then focus on slightly adjusting weights among the existing funds—not adding new ones—to see if the same expected return could be reached with a bit less volatility or slightly higher return at similar risk.

Dividends Info

  • SPDR Kensho New Economies Composite 0.90%
  • Schwab U.S. REIT ETF 3.00%
  • Vanguard Small-Cap Value Index Fund ETF Shares 1.90%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.60%
  • Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares 4.30%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 2.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Value Index Fund ETF Shares 2.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.87%

The overall dividend yield of about 1.9% is modest but supported by meaningful contributions from value, international, and real estate funds. Yield represents the annual cash paid out as a percentage of the portfolio’s value, similar to rental income from a property. REITs and global real estate provide higher yields, which can help smooth returns and offer some spending flexibility without selling shares. Growth and innovation funds contribute less income but more potential for price appreciation. This blend is sensible for an investor who prioritizes growth yet values some cash flow. It’s worth remembering that dividends can be cut in stressed markets, so relying on them as guaranteed “paychecks” can be risky.

Ongoing product costs Info

  • SPDR Kensho New Economies Composite 0.20%
  • Schwab U.S. REIT ETF 0.07%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Value Index Fund ETF Shares 0.04%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio’s total expense ratio around 0.07% is impressively low, especially given the number of funds and the inclusion of a more specialized innovation ETF. Costs in investing are like friction in a machine: small on any given day but significant over many years. Keeping fees low means more of the market’s return stays in your pocket, which compounds meaningfully over decades. The costs are impressively low, supporting better long-term performance and closely matching or beating broad market benchmarks. If simplifying overlapping funds, it makes sense to keep an eye on expenses and favor similarly low-cost options so that the overall fee advantage is preserved as the lineup evolves.

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