A focused portfolio with high exposure to US equities and a touch of gold for diversification

Report created on Aug 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards US equities, with a significant 75% in the Vanguard S&P 500 ETF and 15% in the Vanguard Total Stock Market Index Fund ETF Shares, indicating a strong belief in the US market's potential. The inclusion of 10% in the iShares® Gold Trust Micro introduces a non-equity asset class, aiming to provide a hedge against inflation and market volatility. However, the overall diversification is low, as indicated by its diversification score, with a heavy concentration in just a few asset classes and sectors.

Growth Info

Historically, this portfolio has delivered a Compound Annual Growth Rate (CAGR) of 12.79%, with a maximum drawdown of -23.06%. These figures suggest a robust performance over the period analyzed, with the portfolio experiencing significant volatility but ultimately providing strong returns. The days contributing to 90% of the returns being concentrated in just 15 days highlight the portfolio's reliance on short periods of high returns, which can be a risk factor to consider.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a wide range of possible performances for this portfolio. With 998 out of 1,000 simulations showing positive returns and a median projected increase of 484%, the outlook seems optimistic. However, it's crucial to remember that these projections are speculative and depend heavily on past market behavior, which is not always a reliable indicator of future performance.

Asset classes Info

  • Stocks
    90%

The portfolio's asset allocation is heavily skewed towards stocks, with a 90% allocation, and a small hedge in gold. This allocation reflects a growth-oriented strategy but comes with higher volatility and risk, particularly given the lack of diversification across other asset classes like bonds or real estate. The absence of cash holdings also limits liquidity, which could be a concern in market downturns.

Sectors Info

  • Technology
    29%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Sector analysis reveals a strong emphasis on technology, financial services, and consumer cyclicals, which are sectors known for their growth potential but also for their volatility. The underweight positions in defensive sectors like utilities and consumer defensive indicate a portfolio strategy that leans more towards capital appreciation than income or stability.

Regions Info

  • North America
    90%

With 90% of the portfolio invested in North America, primarily the US, there's a clear geographic concentration risk. This focus on a single region can amplify the impact of local economic downturns or market corrections on the portfolio's overall performance. Expanding into international markets could provide additional diversification benefits and potential growth opportunities in different economic cycles.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Small-cap
    2%

The portfolio's market capitalization breakdown shows a preference for large-cap (mega and big) companies, which tend to be less volatile than smaller companies but might also offer lower growth potential in the long run. The minimal exposure to small and micro-cap stocks limits the portfolio's ability to benefit from the higher growth rates these companies can offer.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates a redundancy in exposure, which could be limiting the portfolio's diversification benefits. This overlap suggests that the portfolio might not be as diversified across different stocks or sectors as it could be, potentially increasing risk without a corresponding increase in expected returns.

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 shows room for optimization, particularly in reducing the overlap between highly correlated assets. By reallocating some of the funds from these overlapping investments into assets with lower correlation, it's possible to maintain the same level of risk while potentially increasing the expected return to 15.55%. This adjustment would enhance the portfolio's diversification and efficiency without significantly altering its risk profile.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.08%

The dividend yield of the portfolio is modest, at an overall yield of 1.08%. While dividends are not the primary focus of this growth-oriented portfolio, they do provide a stream of income that can help to cushion against market volatility and contribute to total returns over time. The similar dividend yields of the two major equity holdings indicate a consistent approach to income generation across the portfolio.

Ongoing product costs Info

  • iShares® Gold Trust Micro 0.09%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low costs, with a total expense ratio (TER) of just 0.04%. This efficiency is crucial for long-term growth, as lower costs directly translate into higher net returns for the investor. The choice of low-cost ETFs is commendable and aligns with best practices for maximizing investment returns over time.

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