A growth tilted all stock portfolio with strong US bias and impressively low overall costs

Report created on Aug 12, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is fully invested in equities through four broad ETFs, with no bonds or cash buffer. Roughly 30% tracks the global market, while the rest leans into US dividend payers, large growth, and small value. Compared with a typical growth benchmark that usually mixes in some bonds, this setup is more aggressive and more concentrated in one asset class. That matters because having only stocks means sharper ups and downs, especially in big market shocks. If that level of movement feels acceptable, staying the course can work; if not, gradually mixing in a stabilizing asset class over time could reduce future volatility.

Growth Info

Over the backtest, a hypothetical $10,000 grew at about 16.26% per year (CAGR, or Compound Annual Growth Rate, which is like your long‑term “average speed” on a road trip). That’s very strong and likely ahead of broad equity benchmarks over the same period. However, the portfolio also suffered a maximum drawdown of roughly –35.6%, meaning a $10,000 peak could have temporarily fallen near $6,440. This pattern—high growth with deep dips—is exactly what you’d expect from a 100% stock growth profile. It’s important to remember that past returns, even excellent ones, do not guarantee anything about the future path.

Projection Info

The Monte Carlo analysis, using 1,000 simulations, projects a very wide range of future outcomes. Monte Carlo simply means the computer reruns many alternate “histories” based on past return patterns to see how things might play out. The median outcome of about 652.7% suggests strong growth potential, while the 5th percentile at 73.2% shows that weak or flat decades are possible. An average simulated annual return of 17.7% looks optimistic and is heavily influenced by the strong historical period used. These numbers are useful for framing expectations, but they’re not promises; real‑world markets can behave very differently from the past.

Asset classes Info

  • Stocks
    100%

All 100% of the portfolio is in stocks, with no meaningful exposure to bonds, cash, or alternative assets. That creates a clear, focused growth orientation and strongly aligns with a high‑risk growth profile, but it also means diversification is limited across asset classes. Asset class diversification matters because different categories, like bonds or real assets, often behave differently when stocks fall sharply. This portfolio’s “moderately diversified” label reflects that its diversification is within equities rather than between asset types. Keeping everything in stocks can be reasonable for long horizons and strong risk tolerance; otherwise, slowly blending in stabilizing assets over time could smooth the ride.

Sectors Info

  • Technology
    24%
  • Financials
    14%
  • Consumer Discretionary
    13%
  • Industrials
    10%
  • Health Care
    10%
  • Energy
    9%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Basic Materials
    3%
  • Real Estate
    1%
  • Utilities
    1%

Sector exposure is broad across nine meaningful sectors, with technology leading around 24%, followed by financials, consumer cyclicals, industrials, and healthcare. This looks broadly similar to many major equity benchmarks, which is a good sign: the sector mix is well‑balanced and aligns closely with global standards. A tilt toward tech and cyclicals typically boosts growth potential but can increase volatility, especially when interest rates rise or economic conditions weaken. On the positive side, the mix of defensive sectors like healthcare and consumer defensive provides some cushion. Keeping this general balance while avoiding outsized bets on any single theme helps maintain a robust long‑term equity exposure.

Regions Info

  • North America
    89%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Latin America
    1%
  • Australasia
    1%

Geographically, about 89% sits in North America, with only modest slices in Europe, Japan, and other regions. That US‑heavy stance has been a tailwind over the last decade, since US stocks outperformed many other markets. However, it also creates “home bias,” meaning results become heavily tied to one country’s economic and policy environment. Common global benchmarks usually allocate more to non‑US regions for risk spreading. This allocation is still workable for investors who want US‑centric growth, but gradually increasing the share of international exposure over time could reduce the risk of a long period where US markets lag other regions.

Market capitalization Info

  • Large-cap
    31%
  • Mega-cap
    29%
  • Mid-cap
    17%
  • Small-cap
    13%
  • Micro-cap
    11%

The portfolio has a healthy spread across company sizes: about 60% in mega and big caps, 17% in mid, and a solid 24% combined in small and micro caps. This is a nice strength: it offers broad market coverage and taps into the higher‑risk, higher‑potential return of smaller companies without being dominated by them. In many benchmarks, small and micro caps have a smaller share, so this tilt may increase volatility but can enhance long‑term growth if smaller companies outperform. Keeping this roughly barbell structure—large, stable names plus a meaningful but controlled slice of smaller stocks—supports both diversification and growth potential.

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 chart, this all‑equity mix appears designed to sit toward the higher‑risk, higher‑return end of the Efficient Frontier. The Efficient Frontier is the set of portfolios that deliver the best possible return for each level of risk, using only the current building blocks and different weightings. Within just these four ETFs, there may be small tweaks that either reduce volatility slightly for the same expected return or seek a bit higher return for similar risk. “Efficiency” here is purely about the risk‑return trade‑off; it doesn’t judge other goals like simplicity, tax preferences, or a strong desire to stay heavily US‑tilted.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.88%

The portfolio’s overall dividend yield is about 1.88%, boosted strongly by the dividend ETF at roughly 3.8%, while the growth fund sits near 0.4%. That blend offers a modest income stream while keeping a clear focus on capital growth. Dividends can be especially useful for reinvestment, as they buy more shares during downturns and help compound returns over time. For someone not needing income today, automatically reinvesting dividends keeps the strategy simple and growth‑oriented. For future income needs, the existing dividend tilt is a nice starting point; income levels could be adjusted later by shifting some weight toward higher‑yielding holdings if necessary.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.10%

The average total expense ratio (TER) of roughly 0.10% is impressively low and strongly supports long‑term performance. TER is just the annual fee charged by funds, similar to a small “maintenance cost” taken out of returns. Compared with many actively managed options that may charge 0.5–1.0% or more, this level is very cost‑efficient. Over decades, even a 0.5% difference in fees can translate into a large gap in ending wealth, thanks to compounding. Keeping costs this low is a major strength of the portfolio and is fully in line with best practices for long‑term, growth‑focused investors who want to keep more of their returns.

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