A balanced and moderately diversified portfolio with a strong focus on US equities
Report created on Jul 26, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 90.09% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 9.01% -
SG iShares® 0-3 Month Treasury Bond ETF
SGOV - US46436E7186 0.90%
The portfolio is heavily weighted towards US equities, primarily through the Vanguard S&P 500 ETF, which constitutes 90.09% of the portfolio. The Vanguard Total International Stock Index Fund ETF Shares add a global perspective but are significantly underweighted at 9.01%. The inclusion of the iShares® 0-3 Month Treasury Bond ETF at 0.90% provides a minimal cushion against volatility. This composition suggests a strong conviction in the US market's performance while attempting to maintain a nominal level of international exposure and liquidity.
Growth
Historical performance showcases a Compound Annual Growth Rate (CAGR) of 16.91%, a robust figure reflecting the strong bull market in US equities. The maximum drawdown of -24.66% indicates the portfolio's vulnerability during market corrections, typical of equity-heavy allocations. The days contributing to 90% of returns being concentrated in just 28.0 days highlights the portfolio's reliance on short, significant upward movements, underscoring the importance of staying invested through market cycles.
Projection
Monte Carlo simulations, using historical data to project future outcomes, show a wide range of potential portfolio values. With 996 out of 1,000 simulations yielding positive returns, the median projected increase is 316.1%, suggesting a high likelihood of substantial growth. However, the reliance on historical data limits predictive accuracy, especially in market conditions significantly different from the past.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's asset allocation is almost entirely in stocks (99%), with a nominal cash position (1%) and no bond exposure. This allocation is conducive to high growth potential but comes with increased volatility and risk, particularly in market downturns. The absence of bonds and other asset classes limits the portfolio's ability to hedge against stock market fluctuations.
Sectors
- Technology 31%
- Financials 15%
- Consumer Discretionary 11%
- Health Care 9%
- Telecommunications 9%
- Industrials 9%
- Consumer Staples 6%
- Energy 3%
- Utilities 3%
- Real Estate 2%
- Basic Materials 2%
Sector allocation is heavily tilted towards Technology (31%), followed by Financial Services (15%) and Consumer Cyclicals (11%). This concentration in high-growth sectors has likely contributed to the portfolio's strong historical performance but also increases susceptibility to sector-specific risks. Diversification across more sectors or rebalancing towards less volatile sectors could reduce risk.
Regions
- North America 90%
- Europe Developed 4%
- Asia Emerging 1%
- Japan 1%
- Asia Developed 1%
Geographic allocation is predominantly in North America (90%), with minimal exposure to developed Europe (4%), Asia Emerging (1%), and other regions. This concentration benefits from the robust performance of the US market but lacks significant diversification benefits that international exposure might provide, particularly in emerging markets.
Market capitalization
- Mega-cap 46%
- Large-cap 34%
- Mid-cap 17%
- Small-cap 1%
The portfolio's market capitalization breakdown shows a preference for larger companies (Mega 46%, Big 34%), which tend to be more stable but might offer lower growth potential than smaller companies. Medium-sized companies represent 17%, offering some growth potential, but the almost negligible exposure to small and micro-cap stocks limits opportunities for outsized gains.
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 is below the optimal level identified through Efficient Frontier analysis, which suggests a potential return of 2.82% at a similar risk level. Adjusting the portfolio to align more closely with this optimal mix could enhance returns for the same amount of risk, suggesting room for reallocation or diversification.
Dividends
- iShares® 0-3 Month Treasury Bond ETF 4.50%
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.37%
The portfolio's overall dividend yield is 1.37%, contributed by the individual yields of its holdings. While not the focus of this growth-oriented portfolio, dividends provide a stream of income and a potential buffer during market dips. Reinvesting these dividends can also compound growth over time.
Ongoing product costs
- iShares® 0-3 Month Treasury Bond ETF 0.07%
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.03%
With a total expense ratio (TER) of 0.03%, the portfolio benefits from low costs, maximizing the potential for net returns. Low costs are crucial for long-term investment success, especially in a low-yield environment, as they directly enhance net performance by reducing the drag on returns.
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