Growth-focused portfolio with a strong tilt towards US equities and low costs

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 growth-oriented profile, willing to accept higher levels of risk for the potential of substantial returns. It's best suited for individuals with a longer investment horizon, who can withstand periods of market volatility without needing to liquidate assets. The investor likely prioritizes capital appreciation over income and is comfortable with significant exposure to the US equity market.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    60.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    20.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%

The portfolio is heavily weighted towards US equities, with a 60% allocation in the Vanguard S&P 500 ETF, emphasizing large-cap stocks. The inclusion of the Avantis® U.S. Small Cap Value ETF and Vanguard Total International Stock Index Fund ETF Shares, each at 20%, introduces small-cap and international exposure, respectively. This structure aims to balance growth potential with diversification across market capitalizations and geographic regions. However, the heavy tilt towards the US might limit global diversification benefits.

Growth Info

Historically, the portfolio has demonstrated a strong Compound Annual Growth Rate (CAGR) of 15.50%, with a maximum drawdown of -36.31%. These figures highlight the portfolio's ability to generate significant returns, albeit with considerable volatility. The days contributing to 90% of returns being so few indicate that performance heavily relies on short, significant market movements, underscoring the importance of staying invested despite market volatility.

Projection Info

Monte Carlo simulations, using historical data to forecast future performance, suggest a wide range of outcomes with a median annualized return of 16.03%. While the simulations show a high probability of positive returns, they also highlight the inherent uncertainty in predicting market movements. Investors should understand that such projections are speculative and actual results can vary, especially in the short term.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation underscores a growth-oriented strategy but comes with higher volatility and risk. Diversifying across different asset classes, such as bonds or real estate, could provide a buffer during stock market downturns, potentially smoothing out returns over time.

Sectors Info

  • Technology
    24%
  • Financials
    19%
  • Consumer Discretionary
    12%
  • Industrials
    11%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation shows a heavy emphasis on Technology and Financial Services, making up 43% of the portfolio. This concentration can offer high growth potential but may also lead to increased volatility, especially in market conditions unfavorable to these sectors. Diversifying more evenly across sectors could reduce risk and reliance on the performance of a few industries.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

The geographic distribution is predominantly North American (81%), with limited exposure to developed and emerging markets outside the US. This concentration in the US market may limit the portfolio's ability to capitalize on growth opportunities in other regions. Increasing allocations to international equities could enhance diversification and potentially reduce geographic risk.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    27%
  • Mid-cap
    14%
  • Small-cap
    10%
  • Micro-cap
    10%

The market capitalization breakdown reveals a balanced approach, with allocations across mega, big, medium, small, and micro caps. This diversification can help mitigate risk by spreading investments across companies of different sizes, though the focus remains on larger companies. Considering increasing exposure to smaller caps could further enhance growth potential, albeit with added volatility.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.62%

The portfolio's overall dividend yield stands at 1.62%, with the highest yield from the Vanguard Total International Stock Index Fund ETF Shares at 2.80%. While dividends contribute to total returns, the focus here seems to be more on capital appreciation. Investors seeking income might consider adjusting allocations to increase the overall yield, though this may alter the growth-income balance.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.08%

With a total expense ratio (TER) of 0.08%, the portfolio benefits from low costs, enhancing long-term return potential. Low-cost ETFs are an efficient way to gain market exposure without significantly eroding returns through fees. Maintaining focus on cost efficiency is advisable, especially in a low-yield environment.

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.

The current allocation suggests an attempt to optimize for growth within a defined risk profile, aiming for a favorable risk-return ratio. While the Efficient Frontier concept suggests this portfolio is positioned for growth, there's room to explore if a different asset mix could further optimize returns for the same level of risk. Regularly reviewing and adjusting the portfolio in response to changing market conditions and personal financial goals is crucial.

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