Growth-oriented portfolio with a focus on US stocks and technology sector dominance

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor seeking high growth with a moderate to high risk tolerance and a long-term investment horizon. It's designed for those comfortable with significant exposure to the US stock market, particularly within the technology sector, and who are less concerned with short-term volatility. The investor should be prepared for periods of market downturns, relying on the long-term growth potential of US equities.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    75.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    25.00%

This portfolio is highly concentrated in the US stock market, with 75% in the Vanguard Total Stock Market Index Fund ETF Shares and 25% in the Schwab U.S. Large-Cap Growth ETF. This composition reflects a clear growth orientation but suffers from low diversification across asset classes and geographies. The heavy reliance on just two ETFs, both tracking large segments of the US market, underscores this point.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.82%, with significant volatility as evidenced by a maximum drawdown of -34.26%. These figures suggest a strong performance in bullish market conditions but also highlight vulnerability during market downturns. The concentration in growth stocks, particularly within the technology sector, likely contributed to these dynamics.

Projection Info

Monte Carlo simulations, projecting future performance based on past data, indicate a wide range of possible outcomes, with a median increase of 623.6% in portfolio value. While encouraging, it's important to remember that such simulations assume historical market conditions will repeat, which may not always be the case. The high degree of correlation between the assets in this portfolio also means that diversification benefits are limited, potentially increasing risk.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio is entirely allocated to stocks, with no exposure to other asset classes like bonds or real estate. This singular focus on equities enhances growth potential but also increases susceptibility to market volatility. Diversifying across different asset classes could reduce risk without significantly compromising growth prospects.

Sectors Info

  • Technology
    35%
  • Financials
    12%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Health Care
    10%
  • Industrials
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

With 35% exposure to technology and significant investments in financial services and consumer cyclicals, the portfolio is positioned to benefit from growth in these sectors. However, this sectoral concentration increases risk, particularly from sector-specific downturns. Broadening sectoral exposure could mitigate this risk while still capturing growth.

Regions Info

  • North America
    100%
  • Europe Developed
    0%
  • Asia Developed
    0%
  • Latin America
    0%
  • Asia Emerging
    0%

The portfolio's geographic allocation is exclusively North American, lacking exposure to developed European or Asian markets, as well as emerging markets. This geographic concentration limits diversification and exposes the portfolio to region-specific economic and political risks. Incorporating international assets could offer additional growth opportunities and risk mitigation.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a heavy bias towards mega and large-cap stocks, which are typically less volatile than smaller companies but may also offer lower growth potential. Including a mix of medium, small, and micro-cap stocks could enhance returns, albeit with increased risk.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The high correlation between the Vanguard Total Stock Market Index Fund ETF Shares and the Schwab U.S. Large-Cap Growth ETF limits the portfolio's diversification benefits. Diversification across uncorrelated assets can reduce risk by ensuring that not all investments are likely to lose value simultaneously.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.00%

The portfolio's dividend yield stands at 1.00%, which is relatively modest. While growth stocks are not typically known for high dividends, the current yield contributes to total returns. Investors seeking income might consider assets with higher dividend yields, though this may shift the portfolio's risk-return profile.

Ongoing product costs Info

  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) of 0.03% is impressively low, maximizing the potential for net returns. Maintaining low investment costs is crucial for long-term growth, as even small differences in fees can significantly impact total returns over time.

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.

Considering the portfolio's high correlation between assets and its narrow focus on US stocks, there's room for optimization towards the Efficient Frontier. This would involve diversifying across less correlated assets and possibly other asset classes to achieve a more favorable risk-return balance.

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