A growth-focused portfolio with a strong U.S. bias and notable sector concentration

Report created on Apr 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of three main ETFs: Vanguard Total Stock Market Index Fund ETF Shares (50%), Schwab U.S. Large-Cap Growth ETF (30%), and Vanguard Total International Stock Index Fund ETF Shares (20%). This structure leans heavily towards U.S. equities, with a minor international component. A comparison with a typical growth benchmark shows a similar U.S. dominance but suggests potential for increased international exposure. A more balanced geographic allocation could enhance diversification and potentially reduce risk.

Growth Info

Historically, the portfolio has achieved a robust CAGR of 12.55%, outperforming many standard benchmarks. This indicates a strong growth trajectory over time. However, the max drawdown of -33.88% suggests significant volatility, which is typical for growth-focused portfolios. This performance highlights the potential for high returns but also underscores the importance of being prepared for periods of downturn. Maintaining a long-term perspective can help weather these fluctuations.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, indicate a median potential growth of 312.3%. However, it's important to note that these projections are not guarantees and depend on past trends continuing. The simulations show a high likelihood of positive returns, with 973 out of 1,000 scenarios yielding gains. This suggests a favorable outlook, but diversification and risk management remain crucial to navigating future uncertainties.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, comprising 99% of the asset allocation, with a negligible 1% in cash. This heavy equity focus aligns with a growth strategy, aiming for capital appreciation. However, it may expose the portfolio to higher volatility. Introducing other asset classes like bonds could provide stability and reduce overall risk. Diversifying into different asset types can help cushion against stock market downturns.

Sectors Info

  • Technology
    32%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    10%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio's sector allocation is notably concentrated in technology (32%), followed by financial services (14%) and consumer cyclicals (11%). This concentration can lead to higher volatility, especially in tech-heavy portfolios during market corrections or interest rate hikes. While these sectors have driven past growth, diversifying into underrepresented sectors could mitigate sector-specific risks and enhance resilience against market shifts.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

With 81% of the portfolio allocated to North America, there's a significant home-country bias. This may limit exposure to international growth opportunities. Although the U.S. market has been a strong performer, diversifying geographically can reduce risks associated with regional economic downturns. Increasing allocations to emerging markets or other developed regions could enhance global diversification and capture broader growth potential.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio skews towards larger companies, with 48% in mega-cap and 28% in big-cap stocks. This allocation typically offers stability and lower volatility but may limit exposure to the high growth potential of smaller companies. Including more small and mid-cap stocks could boost growth prospects, though it may also increase risk. Balancing market cap exposure can help optimize the risk-return profile.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The Schwab U.S. Large-Cap Growth ETF and Vanguard Total Stock Market Index Fund ETF Shares are highly correlated, meaning they tend to move together. This limits diversification benefits, as overlapping assets can amplify portfolio volatility during downturns. Reducing correlation by diversifying into less correlated assets can help manage risk and improve the overall resilience of the portfolio.

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.

The portfolio's current allocation could be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. By adjusting the weights of existing assets, the portfolio can achieve a more desirable balance between risk and return. However, this optimization process relies on historical data and assumptions, which may not fully capture future market conditions. Regularly reviewing and rebalancing the portfolio ensures alignment with evolving financial goals.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.47%

The portfolio's total dividend yield stands at 1.47%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the highest yield at 3.10%. Dividends provide a steady income stream and can cushion against market volatility. For growth-focused investors, reinvesting dividends can enhance compounding returns. However, prioritizing high dividend yields may shift the focus from growth to income, which might not align with the portfolio's primary objective.

Ongoing product costs Info

  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, which supports better long-term performance by minimizing cost drag on returns. Low costs are crucial for maximizing net gains, especially over extended investment horizons. Maintaining this cost efficiency is advantageous, but investors should remain vigilant about potential increases in fees or expenses that could erode returns over time.

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