A focused growth-oriented portfolio with a singular bet on the S&P 500 ETF
Report created on Jul 9, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
SP SPDR® Portfolio S&P 500 ETF
SPLG - US78464A8541 100.00%
This portfolio is entirely invested in the SPDR® Portfolio S&P 500 ETF, indicating a highly concentrated approach toward U.S. large-cap equities. Such a composition offers simplicity but comes with the trade-off of low diversification across asset classes and geographies. This singular focus on the S&P 500 means the portfolio's performance is directly tied to the fortunes of the top companies in the U.S. market, reflecting a growth-oriented risk profile but lacking in hedging against sector-specific or regional downturns.
Growth
Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.34%, with a maximum drawdown of -33.90%. The days contributing most to returns highlight the volatility and the potential for significant short-term gains or losses. This performance is reflective of the broader U.S. stock market's trends over the past years, benefiting from the growth in technology and other leading sectors. However, the significant drawdown points to the risks inherent in a fully equity-focused strategy, especially one tied to a single market.
Projection
The Monte Carlo simulation, a tool used to forecast potential investment outcomes by running numerous simulations based on historical data, suggests a wide range of possible future returns for this portfolio. The projection of annualized returns averaging 15.56% across simulations is optimistic, yet the range from the 5th to the 67th percentile underscores the uncertainty and risk involved. It's important to remember that such simulations are based on past performance, which is not a reliable indicator of future results.
Asset classes
- Stocks 100%
With 100% allocation to stocks, this portfolio maximizes its growth potential but also its exposure to market volatility. The absence of other asset classes such as bonds or real estate means there's no buffer against stock market downturns. Diversifying across different asset classes can reduce volatility and provide more steady returns over time, especially in turbulent markets.
Sectors
- Technology 34%
- Financials 14%
- Consumer Discretionary 11%
- Telecommunications 10%
- Health Care 9%
- Industrials 8%
- Consumer Staples 5%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 2%
The sector allocation closely mirrors the S&P 500's composition, with a heavy emphasis on technology, financial services, and consumer cyclicals. This sector distribution has historically driven strong returns but also entails higher volatility, particularly in the technology sector. The limited exposure to defensive sectors like utilities and consumer staples could make the portfolio more susceptible to market swings.
Regions
- North America 99%
The geographic allocation is almost exclusively North American, with a negligible presence in other regions. This concentration in the U.S. market has been beneficial in recent years but limits exposure to potential growth in developed and emerging markets outside the U.S. Diversifying geographically can help mitigate risks associated with economic downturns or political instability in a single region.
Market capitalization
- Mega-cap 46%
- Large-cap 35%
- Mid-cap 18%
- Small-cap 1%
The portfolio's emphasis on mega and big-cap companies aligns with its goal of capturing the growth of the largest U.S. corporations. While these companies tend to be more stable than smaller caps, the portfolio may miss out on the higher growth potential offered by mid and small-cap companies. Incorporating a broader range of market capitalizations could enhance returns and diversification.
Dividends
- SPDR® Portfolio S&P 500 ETF 1.20%
- Weighted yield (per year) 1.20%
The dividend yield of 1.20% adds an income component to the portfolio, albeit a modest one compared to the total return. For investors seeking income, diversifying into assets with higher yield potential could be beneficial. However, for a growth-focused strategy, reinvesting dividends from such a portfolio could compound growth over time.
Ongoing product costs
- SPDR® Portfolio S&P 500 ETF 0.02%
- Weighted costs total (per year) 0.02%
With a total expense ratio (TER) of 0.02%, this portfolio stands out for its cost efficiency, maximizing the potential for net returns. Low costs are crucial for long-term investment success, as they compound over time. This aspect of the portfolio is commendably optimized, reflecting well on its design for growth-oriented investors.
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