A growth-focused portfolio with high exposure to the US stock market and low diversification
Report created on Jul 9, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SP SPDR® Portfolio S&P 500 ETF
SPLG - US78464A8541 50.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 50.00%
This portfolio is evenly split between two ETFs: the SPDR® Portfolio S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares, each constituting 50% of the portfolio. This composition indicates a strong focus on the US stock market, with an emphasis on large-cap stocks. The portfolio's classification as "Profile_Growth" with a risk score of 5 out of 7 suggests it is designed for investors seeking growth, albeit with a higher risk tolerance. The low diversification score reflects the concentrated exposure to a single asset class and geography.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.10%, with a maximum drawdown of -34.44%. These figures highlight the portfolio's potential for high returns but also underscore its susceptibility to significant drops during market downturns. The days contributing to 90% of returns being limited to 30 suggests that a few exceptional days largely drive the portfolio's performance, a common characteristic of equity-focused investments.
Projection
Monte Carlo simulations, running 1,000 scenarios, predict a median return of 485.8% over an unspecified timeframe, with 991 out of 1,000 simulations yielding positive returns. This analysis suggests a high likelihood of future gains, but it's important to remember that such projections are based on historical data and cannot guarantee future performance. The wide range of outcomes emphasizes the portfolio's risk level.
Asset classes
- Stocks 100%
The portfolio is entirely invested in stocks, with no allocation to cash or other asset classes. This singular focus on equities enhances growth potential but also increases volatility and risk. Diversifying across different asset classes could provide a buffer against stock market fluctuations and potentially smooth out returns over time.
Sectors
- Technology 32%
- Financials 14%
- Consumer Discretionary 10%
- Health Care 10%
- Telecommunications 9%
- Industrials 8%
- Consumer Staples 6%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector allocation leans heavily towards technology (32%), financial services (14%), and consumer cyclicals (10%), among others. This sector distribution is reflective of the broader US stock market but may expose the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting technology and financial stocks more acutely.
Regions
- North America 100%
The geographic allocation is entirely focused on North America, with no exposure to international markets. This concentration in the US market limits global diversification and increases vulnerability to domestic economic shifts. Incorporating international equities could enhance diversification and potentially reduce risk.
Market capitalization
- Mega-cap 44%
- Large-cap 32%
- Mid-cap 19%
- Small-cap 4%
- Micro-cap 1%
The portfolio's market capitalization breakdown shows a preference for mega (44%) and big (32%) cap stocks, which are generally considered less volatile than smaller companies. However, the limited exposure to small (4%) and micro (1%) cap stocks restricts opportunities for higher growth rates these segments may offer.
Redundant positions
-
High correlationVanguard Total Stock Market Index Fund ETF SharesSPDR® Portfolio S&P 500 ETF
The high correlation between the two ETFs in the portfolio indicates overlapping holdings, which diminishes the diversification benefits and effectively concentrates risk. Diversifying across less correlated assets could reduce volatility and improve the portfolio's risk-adjusted 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 current portfolio's expected return could be improved by addressing the high correlation between its assets. By diversifying into less correlated investments, it's possible to maintain a similar risk level while aiming for an optimal expected return of 14.34%. This adjustment would require rebalancing the portfolio to include a broader range of asset classes or sectors.
Dividends
- SPDR® Portfolio S&P 500 ETF 1.20%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Weighted yield (per year) 1.20%
With both ETFs offering a dividend yield of 1.20%, the portfolio provides a modest income stream in addition to potential capital appreciation. While not the primary focus, these dividends can contribute to total returns, especially in volatile or down markets.
Ongoing product costs
- SPDR® Portfolio S&P 500 ETF 0.02%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.02%
The portfolio benefits from exceptionally low costs, with a total expense ratio (TER) of 0.02%. Low costs are crucial for long-term investment success, as they directly enhance net returns by reducing the drag on performance.
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