A growth-focused portfolio with a strong U.S. bias and moderate sector diversification

Report created on Apr 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards U.S. equities, with a 55% allocation to the Vanguard S&P 500 ETF, complemented by 20% in Schwab U.S. Large-Cap Growth ETF. The remaining allocation includes small-cap and international exposure through Pacer US Small Cap Cash Cows 100 ETF and Vanguard Total International Stock Index Fund ETF Shares, respectively. The VanEck Semiconductor ETF adds a tech-focused angle. This structure aligns with a growth-oriented strategy, emphasizing large-cap U.S. stocks. To enhance diversification, consider incorporating more asset classes or geographic regions.

Growth Info

Historically, the portfolio has delivered strong returns with a CAGR of 14.58%, outperforming many benchmarks. However, it also experienced significant volatility, as indicated by a max drawdown of -33.91%. This means that while the portfolio has the potential for high returns, it also carries substantial risk during market downturns. Comparing this to a benchmark like the S&P 500 can provide context, as similar high-growth portfolios often exhibit similar patterns. Consider diversifying further to mitigate potential drawdowns in the future.

Projection Info

Forward projections using Monte Carlo simulations show a promising outlook, with a median expected return of 451.1%. Monte Carlo simulations use historical data to model potential future outcomes, offering a range of possibilities. However, it’s important to remember that these are hypothetical scenarios and not guarantees. The high number of simulations with positive returns (974 out of 1,000) suggests a strong likelihood of achieving gains. Yet, diversifying further can help ensure more stable outcomes across varying market conditions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking exposure to other asset classes like bonds or real estate. While this can be beneficial for growth, it also increases volatility and risk. Diversification across asset classes can help stabilize returns, especially during periods of stock market turbulence. Compared to a balanced benchmark, this portfolio could benefit from adding fixed income or alternative investments to reduce risk and enhance resilience.

Sectors Info

  • Technology
    35%
  • Financials
    12%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation is tech-heavy, with 35% in technology, which can lead to increased volatility, especially during interest rate fluctuations. Other sectors like financial services and consumer cyclicals are also significant. While this allocation aligns with growth potential, it may expose the portfolio to sector-specific risks. Consider diversifying into more sectors to balance potential downturns in any one industry, ensuring a more stable performance over time.

Regions Info

  • North America
    89%
  • Europe Developed
    5%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Japan
    2%

Geographic exposure is predominantly North American at 89%, with limited international diversification. This U.S. bias can lead to vulnerability if the U.S. market underperforms. Compared to global benchmarks, this portfolio could benefit from increased exposure to emerging markets or other developed regions to mitigate regional risks and capitalize on global growth opportunities.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    29%
  • Mid-cap
    16%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio primarily consists of mega and big-cap stocks, with 45% and 29% allocations, respectively. This focus provides stability and growth potential but limits exposure to the potential high returns of smaller-cap stocks. While small caps are represented, increasing their weight or adding micro-cap stocks could enhance growth opportunities and diversification. Balancing market capitalization exposure can help optimize risk and return.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

The Schwab U.S. Large-Cap Growth ETF and Vanguard S&P 500 ETF are highly correlated, meaning they tend to move together. This limits diversification benefits, as similar assets increase risk during downturns. Reducing overlap can improve risk management and enhance the portfolio's resilience. Consider replacing one of these with a less correlated asset to achieve a more balanced risk profile.

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 can potentially be optimized using the Efficient Frontier, which identifies the best risk-return balance for a given set of assets. By adjusting the weights of existing assets, it’s possible to achieve better returns for the same level of risk. However, this optimization is limited to the current asset selection and does not account for diversification across different asset classes or regions.

Dividends Info

  • Pacer US Small Cap Cash Cows 100 ETF 1.30%
  • Schwab U.S. Large-Cap Growth ETF 0.50%
  • VanEck Semiconductor ETF 0.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.34%

The portfolio's dividend yield is 1.34%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the most at 3.10%. Dividends provide a steady income stream and can cushion against market volatility. For growth investors, dividends are a secondary consideration, but they still play a role in total returns. Consider maintaining a balance between growth and income to enhance overall portfolio performance.

Ongoing product costs Info

  • Pacer US Small Cap Cash Cows 100 ETF 0.59%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is impressively low at 0.11%, supporting better long-term performance by minimizing costs. The Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF contribute the least to costs, making them cost-effective choices. Keeping expenses low is crucial for maximizing net returns, so continue to monitor and manage costs effectively.

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