Three low cost US stock ETFs with strong historic returns and efficient but concentrated diversification
Report created on Apr 27, 2026Risk profile
4/7
Diversification profile
2/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 70.00% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 20.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 10.00%
This portfolio is made up of three US equity ETFs, all fully invested in stocks. The largest piece is a broad total US market fund at 70%, paired with a 20% allocation to an S&P 500 ETF and 10% to a US dividend equity ETF. Structurally, it is a very simple, stock-only, buy-and-hold setup. Simplicity matters because fewer moving parts make it easier to understand how the portfolio behaves. The overlap between the total market and S&P 500 funds means exposure is heavily centered on large US companies. This streamlined structure creates a clear, equity-driven growth profile with limited diversification beyond one country and one asset class.
Growth
Over the period from 2016 to 2026, a hypothetical $1,000 invested in this portfolio grew to about $3,874. That translates into a compound annual growth rate (CAGR) of 14.56%, which is like averaging your speed over a long road trip. The portfolio slightly lagged the US market benchmark by 0.49% per year but beat the global market by 2.23% annually. Its maximum drawdown was -34.56% during early 2020, similar to the benchmarks, and it recovered within about five months. The fact that 90% of returns came from just 35 days highlights how missing a few strong days could have made a big difference, a common pattern in stock-heavy portfolios.
Projection
The Monte Carlo projection simulates 1,000 possible 15‑year paths using past returns and volatility as a guide, like running many “what if” futures. The median outcome grows $1,000 to about $2,664, with a broad middle range of roughly $1,798 to $4,119. Extreme but still plausible paths span from about $951 to $8,082. Across all simulations, the average annualized return is 8.13%, and about 74% of paths end positive. These simulations are useful for visualizing uncertainty, but they rely on historical patterns continuing, which is never guaranteed. Real-world outcomes could be better or worse, especially if future market conditions differ sharply from the past.
Asset classes
- Stocks 100%
All of this portfolio sits in a single asset class: stocks, at 100%. That creates a pure equity profile, with no bonds, cash, or alternative assets to dampen stock market swings. Asset classes tend to respond differently to economic events, so mixing them is one of the classic ways to diversify risk. Here, diversification comes only from owning many individual companies through the ETFs, not from owning different types of investments. This setup naturally leans toward higher long‑term growth potential, but with that comes the full ride of equity ups and downs, as seen in the sizable drawdown during 2020.
Sectors
- Technology 30%
- Financials 12%
- Health Care 11%
- Consumer Discretionary 10%
- Telecommunications 10%
- Industrials 9%
- Consumer Staples 6%
- Energy 5%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
Sector exposure is spread across many areas, but it clearly leans toward certain parts of the economy. Technology is the largest slice at 30%, followed by financials, health care, consumer discretionary, and telecommunications, with smaller allocations to industrials, consumer staples, energy, utilities, real estate, and basic materials. This looks reasonably close to typical US market sector weights, which is a good sign for diversification within equities. A tech‑heavy tilt can benefit from innovation and growth phases but may face sharper moves during interest rate spikes or when market leadership rotates. The presence of defensive sectors like consumer staples and utilities, even in small amounts, helps smooth sector-specific shocks a bit.
Regions
- North America 99%
Geographically, the portfolio is overwhelmingly concentrated in North America at 99%. That means returns are tightly linked to the performance of one region’s economy, currency, and policies. Compared with global equity indices, which spread across many countries, this is a strong home-country focus. Such concentration has been favorable in recent years as US markets have led global returns, which shows up in the portfolio’s outperformance versus the global benchmark. However, it also means that if US stocks underperform other regions in a future decade, there is little built-in offset from international exposure in this portfolio’s current form.
Market capitalization
- Mega-cap 37%
- Large-cap 37%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 2%
By market capitalization, the portfolio is notably tilted toward larger companies: 37% in mega-caps, 37% in large-caps, with 19% mid-caps, 5% small-caps, and 2% micro-caps. Market cap simply measures a company’s total value on the stock market. This pattern is very similar to a broad US index: big firms dominate, with a meaningful but smaller contribution from mid and small companies. Larger companies often bring more stable earnings and liquidity, while mid and small caps can be more volatile but sometimes deliver bursts of higher growth. This blend supports a mainstream equity risk profile with some diversification across company sizes.
True holdings
-
NV NVIDIA Corporation 6.00%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 5.48%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 4.04%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 2.97%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 2.46%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 2.16%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 1.96%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 1.84%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
TS Tesla Inc 1.54%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
BR Berkshire Hathaway Inc 1.27%
Part of fund(s):- Vanguard S&P 500 ETF
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 29.70%
Looking through the ETFs, the largest underlying exposures include NVIDIA, Apple, Microsoft, Amazon, Alphabet (both share classes), Broadcom, Meta, Tesla, and Berkshire Hathaway. These giants show up in multiple funds, so their combined weights are higher than any single ETF might suggest, especially for NVIDIA and Apple. This overlap creates a form of hidden concentration: performance of a relatively small list of mega-cap names can drive a large share of the portfolio’s ups and downs. Only ETF top‑10 holdings are captured here, so actual overlap is likely somewhat higher, but even this partial view confirms that a handful of leading companies have outsized influence.
Factors
Factor exposure across value, size, momentum, quality, yield, and low volatility is broadly neutral, hovering near the 50% mark for each. Factors are like underlying “personality traits” of stocks that research links to long-term returns and risk, such as cheapness (value) or stability (low volatility). A neutral profile means the portfolio behaves a lot like the broad market on these dimensions rather than deliberately leaning into or away from any particular style. This balanced factor mix helps explain why performance has tracked the US market fairly closely over time, with no strong bias toward classic factor strategies such as deep value, high momentum, or high yield.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 70.00% 71.6% -
Vanguard S&P 500 ETF
Weight: 20.00% 20.1% -
Schwab U.S. Dividend Equity ETF
Weight: 10.00% 8.4%
Risk contribution shows how much each ETF drives the portfolio’s overall volatility, regardless of its weight. Here, the total market ETF at 70% weight contributes about 71.6% of risk, the S&P 500 ETF at 20% adds around 20.1%, and the dividend ETF at 10% contributes only 8.4%. A risk/weight ratio near 1.0 for the first two funds indicates their risk impact matches their size, while the dividend fund’s ratio of 0.84 suggests it is slightly less volatile than its allocation. This pattern is consistent with its income focus. Overall, risk is highly concentrated in the broad market funds, mirroring how the portfolio is allocated.
Redundant positions
-
High correlationVanguard S&P 500 ETFVanguard Total Stock Market Index Fund ETF Shares
The correlation data show that the S&P 500 ETF and the total US market ETF move almost identically. Correlation measures how often and how strongly assets move together; a value near 1 means they tend to rise and fall in tandem. When holdings are highly correlated, they provide less diversification benefit during market stress because they react similarly to shocks. In this portfolio, the close relationship between these two core funds reinforces the idea that there is effectively one main equity engine, with only a small diversification twist from the dividend ETF. This doesn’t negate diversification across individual stocks, but it does limit diversification across different return patterns.
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 the risk‑return chart, the current portfolio sits on or very near the efficient frontier, meaning that for its risk level, the mix of holdings is already using them in an efficient way. The Sharpe ratio, which compares excess return over a risk‑free rate to volatility, is 0.63 for the current portfolio. The optimal portfolio using the same ETFs reaches a higher Sharpe of 0.82 with slightly more risk, and the minimum variance portfolio has Sharpe 0.77 with lower risk. The key takeaway is that, based on past data, the chosen weights are already quite efficient and not leaving obvious risk‑return improvements on the table within this three‑ETF lineup.
Dividends
- Schwab U.S. Dividend Equity ETF 3.40%
- Vanguard S&P 500 ETF 1.10%
- Vanguard Total Stock Market Index Fund ETF Shares 1.10%
- Weighted yield (per year) 1.33%
The overall dividend yield of the portfolio is about 1.33%, with the dedicated dividend ETF yielding 3.40% and the broad index funds around 1.10%. Dividend yield is the annual cash payout from holdings, expressed as a percentage of the current price. It contributes to total return alongside price changes, and can be especially noticeable during periods when markets move sideways. Here, most of the dividend punch comes from the 10% allocation to the dividend ETF, while the larger broad-market positions provide more modest income. This mix anchors the portfolio more toward capital growth than income, with dividends playing a smaller but steady supporting role.
Ongoing product costs
- Schwab U.S. Dividend Equity ETF 0.06%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.03%
Portfolio costs are impressively low, with a total expense ratio (TER) of about 0.03%. TER is the annual fee charged by funds as a percentage of your investment, quietly deducted inside the ETF. Keeping this number low helps more of the portfolio’s returns stay in your pocket and can add up significantly over long periods due to compounding. All three ETFs used here are among the cheaper options in their categories, which aligns well with best practices for cost control. This cost structure is a clear strength of the portfolio and supports better long-term performance potential relative to higher-fee alternatives.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey