Growth-focused portfolio with high concentration in US large and mid-cap stocks
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 with a high risk tolerance and a focus on capital growth over income generation. It's tailored for those comfortable with significant exposure to the volatility of the U.S. stock market, particularly within the technology sector. Ideal for individuals with a long-term investment horizon, this strategy assumes the investor is willing to accept short-term fluctuations for the possibility of higher long-term returns.
Positions
-
Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 80.76% -
Vanguard Mid-Cap Growth Index Fund ETF Shares
VOT - US9229085389 19.24%
This portfolio is heavily weighted towards U.S. large-cap growth stocks, with an 80.76% allocation in the Schwab U.S. Large-Cap Growth ETF, and a smaller but significant 19.24% allocation in the Vanguard Mid-Cap Growth Index Fund ETF Shares. This composition suggests a strong focus on growth-oriented investments within the U.S. stock market, with little to no diversification into other asset classes or geographic regions. The portfolio's diversification score reflects its low diversity, indicating a concentrated risk in the U.S. growth stock sector.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 16.76%, which is impressive. However, it's important to note the maximum drawdown of -34.53%, highlighting the potential volatility and risk associated with a growth-focused investment strategy. The days contributing to 90% of returns being limited to 32 days further emphasizes the portfolio's susceptibility to significant market movements on relatively few days.
Projection
Utilizing Monte Carlo simulations, the portfolio's future performance projections show a wide range of outcomes, with the 5th percentile at a 60.0% increase and the 67th percentile at an 846.2% increase. Such projections, while based on historical data, underscore the inherent uncertainty in predicting stock market performance. It's crucial to remember that these simulations provide a range of possible outcomes, not guarantees.
Asset classes
- Stocks 100%
- Cash 0%
The portfolio's allocation is entirely in stocks, with no presence in other asset classes like bonds or real estate. This singular focus on stocks, particularly in the growth sector, maximizes potential returns but also increases risk, especially in market downturns. Diversifying across different asset classes can reduce volatility and provide a more stable return profile over time.
Sectors
- Technology 44%
- Consumer Discretionary 13%
- Telecommunications 12%
- Health Care 9%
- Financials 8%
- Industrials 7%
- Consumer Staples 2%
- Real Estate 2%
- Basic Materials 2%
- Energy 1%
- Utilities 1%
Sector allocation is heavily concentrated in technology (44%), followed by consumer cyclicals and communication services. This concentration in high-growth sectors aligns with the portfolio's overall growth strategy but also exposes it to sector-specific risks, such as regulatory changes or economic shifts that disproportionately affect these industries.
Regions
- North America 100%
- Europe Developed 0%
- Asia Developed 0%
The portfolio's geographic allocation is exclusively focused on North America, missing out on potential opportunities and risk mitigation benefits offered by international diversification. Investing in other developed or emerging markets could provide exposure to different economic cycles and growth drivers, enhancing the portfolio's diversification.
Market capitalization
- Mega-cap 52%
- Mid-cap 25%
- Large-cap 22%
- Small-cap 1%
- Micro-cap 0%
The distribution between mega (52%), medium (25%), and big (22%) cap stocks, with a minimal allocation to small (1%) and no exposure to micro caps, indicates a preference for established companies with potentially lower volatility than smaller companies. However, this could limit opportunities for higher growth rates often found in smaller, emerging companies.
Dividends
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard Mid-Cap Growth Index Fund ETF Shares 0.60%
- Weighted yield (per year) 0.44%
The portfolio's dividend yield is relatively low, with the total yield at 0.44%. This is consistent with a growth investment strategy, where the primary focus is on capital appreciation rather than income generation. For investors seeking income, a higher allocation to dividend-paying sectors or asset classes may be beneficial.
Ongoing product costs
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard Mid-Cap Growth Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.05%
The portfolio benefits from low costs, with a total expense ratio (TER) of 0.05%. Keeping investment costs low is crucial for enhancing long-term returns, as even small differences in fees can have a significant impact over time. This aspect of the portfolio is well-optimized.
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.
Given the portfolio's current composition, optimizing for the Efficient Frontier could involve diversifying into different asset classes, sectors, or geographies to improve the risk-return profile. While the portfolio shows strong historical performance, there's potential to achieve a more efficient balance between risk and return through broader diversification.
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