A broadly diversified low cost stock portfolio with a growth tilt and strong historical performance

Report created on Aug 11, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is simple and concentrated in three broad stock ETFs, with about seventy percent in a total US market fund, twenty percent in a total international fund, and ten percent in a US growth fund. Structurally, that’s very close to many widely used benchmark mixes, just with a small extra tilt toward growth. Keeping the lineup this streamlined helps with transparency and makes it easier to rebalance over time. The main thing to think about is whether the extra growth slice actually adds anything beyond what the total market fund already holds. If the goal is simplicity and clarity, shifting closer to just broad total market building blocks could be worth considering.

Growth Info

Historically, this mix shows a compound annual growth rate (CAGR) of about 14.4%, meaning a 10,000 dollar investment could have grown to roughly 38,000 over ten years if that rate persisted. CAGR is like the average yearly “speed” of growth over a long trip, smoothing out the bumps. A maximum drawdown around minus 34% signals that during bad markets, the portfolio can fall by roughly a third, which is typical for an all‑stock allocation. That balance of strong long‑term growth and sizable short‑term swings is very much in line with broad equity benchmarks. It’s important to remember that past performance can’t guarantee anything about future returns.

Projection Info

The Monte Carlo analysis, which runs 1,000 different “what if” scenarios using historical patterns, shows a wide range of outcomes. In this case, about 995 out of 1,000 simulations ended with gains, and the average simulated annualized return was around 15.5%. Monte Carlo is basically a stress test: it mixes different sequences of good and bad years to see how the portfolio might behave over time. The 5th percentile ending near 80% of starting value highlights that bad stretches are still possible, even with strong averages. These projections are only estimates built from past data, so they’re useful for framing expectations, not for predicting exact future results.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

Almost everything here is in stocks, with roughly ninety‑nine percent in equities and just about one percent in cash. That lines up more with growth‑oriented benchmarks than with truly balanced portfolios that include bonds or other defensive assets. Staying almost fully in stocks maximizes long‑term growth potential but also keeps volatility and drawdowns relatively high, especially during recessions or market shocks. For many investors, this is fine if the time horizon is long and short‑term dips are acceptable. If steadier ride and smaller losses in tough markets are important, introducing a meaningful slice of lower‑risk assets could help smooth the experience without abandoning the growth focus.

Sectors Info

  • Technology
    32%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector exposure is well spread across all major parts of the economy, with technology, financials, consumer cyclicals, industrials, communication services, and healthcare all meaningfully represented. The roughly one‑third tilt toward technology is very similar to major broad‑market benchmarks today and reflects how much tech and related businesses dominate market value. This is positive for capturing innovation and growth, but it can mean sharper ups and downs when interest rates rise or when sentiment turns against high‑growth companies. Overall, the sector mix is nicely diversified and lines up closely with global standards, so there’s no urgent need to tinker unless a more defensive or income‑heavy tilt is specifically desired.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, this portfolio is strongly tilted toward North America at around eighty‑one percent, with the rest spread across developed Europe, developed Asia, Japan, and small allocations to emerging regions. That home bias toward the US closely matches common benchmark allocations and has been rewarding in recent decades as US markets outperformed many others. The exposure to international stocks still adds useful diversification, especially when foreign markets move differently from US stocks. However, emerging regions are a fairly small slice, so their impact on returns and diversification is limited. This geographic blend is well‑aligned with mainstream practices and works well for someone comfortable with a US‑centric approach.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    2%

Market capitalization exposure leans heavily toward large companies, with roughly forty‑four percent in mega caps, twenty‑nine percent in big caps, and smaller portions in mid, small, and micro caps. This mirrors most broad equity benchmarks and helps keep the portfolio anchored in more established businesses that tend to be more stable and liquid. The presence of mid and small caps adds some extra growth potential and diversification, as these companies can behave differently from giants. However, the small size segments are modest, so they won’t drive performance on their own. This large‑cap‑dominant structure is very typical and usually works well as a core long‑term stock allocation.

Redundant positions Info

  • Vanguard Growth Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The highly correlated pairing between the total US market fund and the US growth fund shows that they tend to move almost in lockstep. Correlation is simply a measure of how similarly two investments move; when it’s very high, owning both doesn’t provide much extra diversification. In this case, the growth ETF largely overlaps with a slice of the total market ETF, which already holds many of the same companies. That overlap means the growth fund mainly adds a tilt toward faster‑growing names rather than new, independent risk sources. If simplicity and cleaner diversification are priorities, trimming overlapping positions and focusing on broad funds could be more efficient.

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 a risk‑return basis, this mix sits near the aggressive side for a “balanced” risk score, mainly because it’s almost entirely in stocks. Efficient Frontier analysis looks at different blends of the existing funds to find the combination that offers the best trade‑off between volatility and return. In this case, there is some room to streamline by reducing overlapping positions that don’t add diversification, especially where correlation is very high. It’s worth remembering that “efficient” just means best risk‑return balance based on the chosen building blocks, not necessarily the perfect portfolio for every personal goal, time horizon, or comfort level with market swings.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.35%

The total portfolio yield, around 1.35%, reflects a growth‑oriented stock mix where returns are expected to come more from price appreciation than from income. The international fund’s higher yield and the lower yield of the growth fund balance out. Dividends can be a useful source of steady cash flow, especially for those spending from their portfolio, but they’re only one part of total return. For an accumulator focused on long‑term growth, a modest yield like this is perfectly in line with modern equity benchmarks. If future income needs rise, shifting a portion into more dividend‑focused or lower‑volatility holdings could help support withdrawals without relying only on selling shares.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

Costs are impressively low, with a total expense ratio around 0.04%. That’s far below the average for many managed funds and even beats plenty of other index options. Fees are like a permanent headwind: every fraction of a percent you avoid is money that keeps compounding for you instead of going to managers. Over decades, that difference can add up to thousands of dollars. This portfolio’s cost structure is a real strength and fully aligned with long‑term best practices. The main thing now is just to maintain this low‑fee mindset if any new funds are added, avoiding unnecessary complexity or higher‑cost specialty products.

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