Large cap tilted equity portfolio focused on US growth with international diversification
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
Balanced Investors
This portfolio suits an investor seeking long‑term capital growth who accepts material short‑term volatility and periodic double‑digit drawdowns. Typical characteristics include a moderate to moderately high risk tolerance a multi‑decade investment horizon and a preference for low‑cost passive instruments. Potential goals would be wealth accumulation retirement funding or growth with occasional rebalancing rather than current income. This investor is comfortable with home market exposure and some small‑cap risk but may benefit from adding conservative assets if retirement or spending needs draw nearer to reduce sequence‑of‑returns risk.
Positions
-
iShares Core S&P 500 ETF
IVV - US4642872000 60.00% -
iShares Core MSCI Total International Stock ETF
IXUS - US46432F8344 30.00% -
iShares Core S&P Small-Cap ETF
IJR - US4642878049 10.00%
The portfolio is concentrated in three broad ETFs with 60% in a US large‑cap ETF 30% in a broad international equity ETF and 10% in a small‑cap ETF. This structure heavily weights equities and specifically US large caps versus a global market cap benchmark which typically has a lower single‑fund concentration. That concentration matters because a few large holdings can dominate returns and risk. Recommendation: keep the simple ETF core for cost and tax efficiency but consider a formal rebalancing schedule and an explicit target range for each holding to prevent unintentional drift and single‑market concentration.
Growth
A hypothetical $10,000 invested at the historical CAGR of 13.5% would have grown substantially over a multi‑year period but also experienced a peak drawdown near -34.7%. CAGR, or compound annual growth rate, measures average annual return like measuring a car’s average speed over a long trip. The high CAGR shows strong equity performance while the large drawdown shows significant volatility. Recommendation: evaluate whether you could tolerate similar swings again; if not, reducing equity concentration or adding diversifying assets could lower drawdown without abandoning long‑term return potential.
Projection
Monte Carlo simulation uses repeated random sampling of historical return patterns to project a range of possible future outcomes. In this case 1,000 simulations produced a median end value around 376% of the start and 979 of 1,000 simulations were positive, with a low‑end (5th percentile) outcome still above initial capital. This modeling helps visualize variability but relies on historical return distributions and assumptions that may not hold. Recommendation: use these simulated ranges as a planning tool not a promise and stress‑test outcomes under different volatility scenarios or lower return assumptions before locking in long‑term plans.
Asset classes
- Stocks 100%
- Other 0%
- Cash 0%
- No data 0%
The portfolio is 100% equities with no bonds cash or alternatives which increases return potential but raises volatility and sequence‑of‑returns risk. Typical balanced benchmarks blend equities and fixed income to smooth swings and provide income. Diversification across asset classes reduces portfolio volatility because different assets often respond differently to market events. Recommendation: evaluate adding a fixed income sleeve or low‑volatility alternatives to better match the stated balanced risk classification and improve downside protection, especially if relying on the portfolio for near‑term cash needs.
Sectors
- Technology 28%
- Financials 16%
- Industrials 11%
- Consumer Discretionary 11%
- Health Care 9%
- Telecommunications 9%
- Consumer Staples 5%
- Basic Materials 4%
- Energy 4%
- Real Estate 3%
- Utilities 2%
Sector exposure is tilted toward technology at 28% with financials 16% and a mix across industrials consumer and healthcare. Technology concentration can boost long‑term growth but also amplify drawdowns during rate shocks or sentiment shifts. A sector mix that roughly mirrors broad benchmarks tends to reduce single‑theme risk. Recommendation: decide if the tech tilt is intentional for growth or accidental due to index weights and either accept the higher volatility or modestly diversify into sectors that historically behave differently in downturns to smooth returns.
Regions
- North America 72%
- Europe Developed 12%
- Japan 5%
- Asia Emerging 4%
- Asia Developed 4%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
- Europe Emerging 0%
Geographic exposure is 72% North America with meaningful developed Europe and Japan exposure but limited emerging market weight. Heavy domestic tilt can be fine for US investors but reduces diversification benefits that come from uncorrelated regional cycles and currency effects. Global benchmarks typically have a smaller single‑region share so this is an overweight relative to pure global market cap allocations. Recommendation: consider small increases to non‑US and emerging allocations if the goal is true global diversification or keep the tilt if there’s a specific home‑bias rationale such as tax or familiarity.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 16%
- Small-cap 7%
- Micro-cap 5%
Market cap distribution shows a strong large‑cap bias with about 72% in mega and big caps and roughly 12% in small and micro caps combined. Large caps typically offer stability, liquidity and lower volatility while small caps can add growth potential and diversification but increase short‑term risk. This mix affects both expected returns and drawdowns: more large caps usually means smoother ride. Recommendation: if you want higher expected returns and can tolerate volatility, consider maintaining or modestly increasing small‑cap exposure; otherwise keep the current large‑cap tilt and rebalance periodically.
Dividends
- iShares Core S&P Small-Cap ETF 1.80%
- iShares Core S&P 500 ETF 1.10%
- iShares Core MSCI Total International Stock ETF 2.80%
- Weighted yield (per year) 1.68%
The portfolio’s blended yield is about 1.68% with international holdings contributing higher yield than the US large‑cap holding and small caps offering modest yield as well. Dividends can provide steady income and help total return particularly during sideways markets, but a low yield implies most returns will come from capital appreciation rather than income. Recommendation: if income or lower volatility is a goal, consider a higher income sleeve or dividend‑oriented holdings; if growth is primary, the current modest yield aligns with a capital‑growth posture.
Ongoing product costs
- iShares Core S&P Small-Cap ETF 0.06%
- iShares Core S&P 500 ETF 0.03%
- iShares Core MSCI Total International Stock ETF 0.07%
- Weighted costs total (per year) 0.04%
Total expense ratio is very low at about 0.04% reflecting efficient core ETFs which is excellent for long‑term compounding. TER, or total expense ratio, is the annual fee charged by an ETF similar to buying fuel for a car—lower cost leaves more of your returns invested. Low costs are a clear strength and align with best practices for maximizing net returns over decades. Recommendation: maintain this low‑cost core, be mindful of trading costs and tax implications of turnover, and periodically review whether comparable funds offer even better tax efficiency for your account types.
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.
Efficient Frontier analysis finds the best risk‑return combinations among the current assets by adjusting allocations between them; this does not create new assets but reallocates within the existing three ETFs. The Efficient Frontier is a curve showing portfolios that offer the highest expected return for a given level of risk. Optimization can reduce volatility or increase expected return but depends on input assumptions and historical covariance which may shift. Recommendation: run an optimization constrained by practical allocation bands and consider adding an asset class such as fixed income before optimizing if the goal is a true risk‑adjusted balanced portfolio.
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