Two fund US growth portfolio with strong mega cap tilt and efficient risk return profile
Report created on Jul 20, 2026Risk profile
5/7
Diversification profile
2/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
VU Vanguard Growth Index Fund ETF Shares
VUG - US9229087369 50.00%
This portfolio is very simple: two US stock ETFs at 50% each, one broad S&P 500 tracker and one focused on growth companies. That means 100% in equities and 100% in a single country, with half of the exposure leaning toward faster‑growing firms. Structurally, this is a classic “core plus growth tilt” setup, where the broad index forms the core and the growth ETF layers extra exposure to high‑growth names. Simplicity like this makes the portfolio easy to understand and monitor. The trade‑off is low diversification across asset types and regions, which is reflected in the low diversification score despite using two funds rather than individual stocks.
Growth
Over the last decade, $1,000 grew to about $4,500, a compound annual growth rate (CAGR) of 16.3%. CAGR is like average speed on a road trip: it smooths the ups and downs into one yearly growth number. This beat both the US market (about 15.0%) and the global market (about 12.5%), showing strong historical return. The worst drop, or max drawdown, was about -33% during early 2020, very similar to broad markets, and it recovered in roughly four months. Only 36 days delivered 90% of total returns, underlining how a small number of very strong days drove much of the outcome, which is typical for equity‑heavy portfolios.
Projection
The Monte Carlo projection uses the past to simulate 1,000 different future paths for this mix. Each simulation shakes returns and volatility in slightly different ways, then tracks where a $1,000 investment ends up after 15 years. The median outcome is about $2,895, with a central band from roughly $1,854 to $4,422 and a wide possible range from about $972 to $7,934. This spread shows how uncertain long‑term equity returns can be, even when the average across simulations is 8.3% per year. As always, these are statistical what‑ifs, not predictions; they rely on historical patterns that may not repeat.
Asset classes
- Stocks 100%
All of the portfolio is in stocks, with no bonds, cash substitutes, or alternative assets. That makes it straightforward: everything is tied to company earnings, valuations, and equity market sentiment. Equity‑only portfolios typically have higher return potential over long periods but also experience larger swings than mixes that include bonds or other stabilizing assets. Compared with global multi‑asset benchmarks that blend stocks and bonds, this portfolio takes on more market risk for the same dollar invested. The upside of this concentration is clear exposure to equity growth; the downside is fewer levers to dampen volatility during broad market downturns.
Sectors
- Technology 44%
- Telecommunications 14%
- Consumer Discretionary 11%
- Financials 8%
- Health Care 7%
- Industrials 6%
- Consumer Staples 3%
- Energy 2%
- Real Estate 1%
- Basic Materials 1%
- Utilities 1%
Sector exposure is heavily tilted toward technology and related areas, with about 44% in technology and another 14% in telecommunications. That is much more tech‑leaning than broad global equity norms and even somewhat growth‑heavier than a plain S&P 500 allocation. Because tech‑heavy portfolios tend to respond strongly to changes in interest rates and expectations for innovation, they can outperform in periods of rapid technological change but also swing more when growth stocks fall out of favor. The smaller allocations to areas like consumer staples, energy, and utilities mean less ballast from traditionally steadier sectors when markets rotate away from growth themes.
Regions
- North America 100%
Geographically, the portfolio is 100% North America, with practical exposure only to US‑listed companies. This alignment with a US benchmark helps it track familiar indices closely and has historically been beneficial during periods when US stocks outperformed the rest of the world. However, it also means results are tightly linked to the US economy, US interest rates, and the US dollar. Global equity benchmarks typically spread risk across many regions, so this home‑country focus trades broader geographic diversification for simplicity and closer alignment with major US index performance.
Market capitalization
- Mega-cap 57%
- Large-cap 28%
- Mid-cap 14%
- Small-cap 1%
The portfolio is dominated by mega‑cap and large‑cap companies, with about 85% in those size segments and only small slices in mid‑ and small‑caps. Market capitalization, or “market cap,” measures a company’s total value (price times shares) and often reflects how established it is. Heavy mega‑cap exposure means the portfolio is driven by the biggest, most widely followed firms, which can be more stable than very small companies but also more tied to index trends. In contrast, mid‑ and small‑caps, while only 15% here, can behave differently across cycles, so their limited presence keeps size diversification modest.
True holdings
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NV NVIDIA Corporation 10.31%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
AA Apple Inc. 9.46%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 6.65%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 4.60%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 4.24%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
AV Broadcom Inc 3.97%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 3.64%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 2.83%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
TS Tesla Inc 2.58%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard Growth Index Fund ETF Shares
- Vanguard S&P 500 ETF
-
LL Eli Lilly and Company 1.27%
Part of fund(s):- Vanguard Growth Index Fund ETF Shares
- Top 10 total 49.51%
Looking through the ETFs, a handful of big names account for a large chunk of total exposure. NVIDIA, Apple, Microsoft, Alphabet, Amazon, Broadcom, and Meta together make up well over a third of the portfolio just from the visible top‑10 holdings. Many of these appear in both ETFs, so overlap creates hidden concentration even though only two tickers are owned. Overlap is probably even larger than shown, since only each ETF’s top 10 are included in this look‑through. This kind of concentration means the portfolio’s day‑to‑day moves will be strongly influenced by how these few mega‑cap growth companies perform.
Factors
Factor exposure shows mild tilts away from value, size, and yield, with neutral readings for momentum, quality, and low volatility. Factors are like underlying “ingredients” that explain return patterns — for example, value favors cheaper stocks, while size favors smaller companies. A low value score and low yield indicate a bias toward more expensive, growth‑oriented firms that tend to reinvest earnings rather than pay high dividends. The low size score confirms emphasis on larger companies. Neutral momentum and quality suggest behavior broadly similar to the overall market in those dimensions, without a strong lean toward recent winners or the highest‑quality balance sheets.
Risk contribution
-
Vanguard Growth Index Fund ETF Shares
Weight: 50.00% 54.6% -
Vanguard S&P 500 ETF
Weight: 50.00% 45.4%
Risk contribution shows how much each ETF drives the portfolio’s overall ups and downs. Even though both funds are 50% by weight, the growth ETF contributes about 55% of total risk, while the S&P 500 ETF contributes about 45%. This difference arises because growth stocks have historically been a bit more volatile, so they move more sharply when markets swing. It’s a good example of how a holding’s risk impact can differ from its simple percentage weight. Together, the two funds account for 100% of risk, which is expected in such a concentrated, two‑holding structure.
Redundant positions
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High correlationVanguard Growth Index Fund ETF SharesVanguard S&P 500 ETF
The two ETFs are described as highly correlated, meaning their prices tend to move in almost the same direction at the same time. Correlation measures how similarly assets behave; values close to 1 indicate they often rise and fall together. Here, the growth ETF and the S&P 500 ETF both track heavily overlapping sets of large US companies, so their daily moves are naturally very similar. High correlation makes the portfolio’s behavior more predictable relative to US growth indices, but it also means there’s limited diversification benefit between the two funds during broad market declines or technology‑driven sell‑offs.
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 efficient frontier analysis suggests this two‑fund mix already sits on or very close to the optimal risk–return curve using these holdings. The portfolio’s Sharpe ratio — a measure of return per unit of volatility, adjusted for a 4% risk‑free rate — is 0.67. The maximum‑Sharpe and minimum‑variance blends using the same two ETFs show slightly higher Sharpe ratios around 0.81, but the current allocation is described as efficient for its risk level. That means, based on historical behavior, the structure is doing a solid job of turning risk into return without obvious inefficiencies in how the two positions are sized.
Dividends
- Vanguard S&P 500 ETF 1.10%
- Vanguard Growth Index Fund ETF Shares 0.40%
- Weighted yield (per year) 0.75%
The overall dividend yield of about 0.75% is modest, reflecting the growth tilt. Yield is the annual cash payout from dividends divided by price, and it represents a steady income stream separate from price changes. Here, the S&P 500 ETF contributes somewhat more yield at 1.1%, while the growth ETF yields only about 0.4%. This combination leans toward companies that prefer reinvesting in expansion over paying high dividends. In practice, most of the portfolio’s long‑term return is likely to come from price appreciation rather than income, which aligns with its classification as a growth‑oriented equity mix.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Growth Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.04%
Costs are impressively low, with a total expense ratio (TER) around 0.04%. TER is the annual fee charged by each ETF, expressed as a percentage of assets — like a small yearly membership fee. Keeping this near zero is a major strength, because every dollar not spent on fees can stay invested and compound over time. Compared with many actively managed funds that charge much more, this low‑cost structure is a strong foundation for long‑term performance. It also means that most differences in results versus benchmarks are driven by market exposure, not by fee drag.
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