A focused dividend-growth strategy with high concentration in US stocks and low diversification

Report created on Aug 20, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards two dividend-focused ETFs, with 70% in the Vanguard Dividend Appreciation Index Fund ETF Shares and 30% in the Schwab U.S. Dividend Equity ETF. This structure indicates a clear preference for income-generating assets within the equity space. The concentration in just two ETFs, however, contributes to low diversification across asset classes and sectors. While this approach simplifies the portfolio, it also increases exposure to market volatility and sector-specific risks, particularly since both ETFs are heavily invested in similar sectors.

Growth Info

Historically, the portfolio has demonstrated strong performance with a Compound Annual Growth Rate (CAGR) of 13.71%. This is a robust figure, suggesting that the focus on dividend-appreciating stocks has paid off in the past. However, it's crucial to remember that past performance is not indicative of future results. The maximum drawdown of -32.05% highlights potential vulnerability during market downturns, emphasizing the importance of understanding one's risk tolerance and investment horizon when relying on historical returns.

Projection Info

Using Monte Carlo simulations, the portfolio's forward projection offers a wide range of outcomes, with the median simulation suggesting a 473.3% increase. While 998 out of 1,000 simulations show positive returns, this optimistic outlook should be tempered with caution. Monte Carlo simulations rely on historical data, and future markets can behave unpredictably. These projections are useful for understanding potential volatility and assessing risk but should not be the sole basis for investment decisions.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no presence in other asset classes such as bonds or real estate. This singular focus on equities enhances potential returns but also increases risk, particularly in volatile markets. Diversifying across different asset classes can provide a buffer against stock market downturns and reduce overall portfolio volatility.

Sectors Info

  • Technology
    22%
  • Financials
    19%
  • Health Care
    15%
  • Consumer Staples
    13%
  • Industrials
    10%
  • Energy
    8%
  • Consumer Discretionary
    7%
  • Basic Materials
    3%
  • Telecommunications
    2%
  • Utilities
    2%

Sector allocation shows a heavy tilt towards Technology, Financial Services, and Healthcare, making up over half of the portfolio. This concentration can amplify sector-specific risks and volatility. For instance, technology stocks may be more sensitive to interest rate changes. Balancing sector exposure could mitigate risk while still allowing for targeted growth in sectors with strong fundamentals.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

Geographically, the portfolio is almost entirely invested in North America, with a negligible allocation to developed Europe. This geographic concentration in the US market limits exposure to potential growth in other regions and increases susceptibility to domestic market fluctuations. Broadening geographic exposure could enhance returns and reduce risk by tapping into different economic cycles and opportunities.

Market capitalization Info

  • Large-cap
    47%
  • Mega-cap
    26%
  • Mid-cap
    22%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's allocation across market capitalizations shows a preference for Big and Mega-cap stocks, which tend to be more stable but offer lower growth potential compared to smaller companies. Medium, Small, and Micro caps represent a smaller portion of the portfolio, suggesting a cautious approach to risk. However, increasing exposure to smaller companies could offer higher growth prospects, albeit with increased volatility.

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.

Considering the portfolio's current composition, there's room for optimization towards achieving a better risk-return profile. Utilizing the Efficient Frontier could identify a mix of assets that maximizes returns for a given level of risk. However, this would likely involve diversifying beyond the current holdings to include other asset classes and geographies, aiming for an allocation that balances growth with risk management more effectively.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.70%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 2.30%

The portfolio's dividend yield stands at 2.30%, combining the higher yield of the Schwab ETF and the lower yield of the Vanguard ETF. This focus on dividend-generating investments supports income generation, which is particularly appealing for investors seeking regular income streams. However, it's important to balance the pursuit of dividends with the potential for capital appreciation, ensuring a holistic approach to total return.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.06%

With total expenses at a remarkably low 0.06%, the portfolio is positioned to keep more of its returns over the long term. Lower costs are crucial for enhancing net performance, especially in income-focused strategies where every basis point counts. This efficient cost structure is a strong aspect of the portfolio, supporting better long-term outcomes.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

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