Growth-focused portfolio with undiversified exposure to top US companies via S&P 500 ETF

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, comfortable with high risk, and a long-term investment horizon. It's designed for individuals who are confident in the continued growth of the U.S. economy and its largest companies. This investor likely has a higher risk tolerance, willing to endure market volatility for the potential of substantial returns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    100.00%

This portfolio is entirely invested in the Vanguard S&P 500 ETF, providing exposure to the top 500 U.S. companies across various sectors. While this offers a broad market overview, it lacks diversification across different asset classes and geographies. The concentration in a single ETF, albeit a diversified one within its scope, places the portfolio in a position of potential vulnerability to market fluctuations specific to the U.S. economy and the sectors it heavily weights, such as technology and financial services.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 14.46%, the portfolio has demonstrated strong historical performance. This high return rate is reflective of the robust growth of the U.S. stock market over the past decade, particularly within the technology sector. However, the maximum drawdown of -34.01% highlights the potential volatility and risks associated with a high concentration in equities, especially from a single geographic region.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median suggesting a substantial potential for growth (527.3% increase). These simulations, while useful for understanding potential volatility and outcomes, are based on historical data and cannot predict future market conditions with certainty. This underscores the importance of considering both the high growth potential and the significant risk of large drawdowns.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%

The portfolio's allocation is 100% in stocks, with no exposure to other asset classes like bonds or real estate. This singular focus on equities enhances growth potential but also increases volatility and risk. Diversifying across different asset classes can provide a buffer against market downturns, as not all asset classes move in tandem.

Sectors Info

  • Technology
    33%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    10%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

Sectoral allocation within the ETF mirrors the S&P 500, with a heavy emphasis on technology, financial services, and consumer cyclicals. This sectoral composition reflects the current market landscape but also exposes the portfolio to sector-specific risks. Diversification across sectors is somewhat achieved within the confines of the S&P 500, yet the heavy weighting in technology could be a concern during tech-specific downturns.

Regions Info

  • North America
    99%
  • Europe Developed
    0%
  • Asia Developed
    0%

The geographic exposure is almost exclusively North American (99%), missing out on potential growth and diversification benefits from developed and emerging markets outside the U.S. This concentration increases the portfolio's sensitivity to U.S. economic and political events, potentially limiting global growth opportunities.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    35%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization exposure is predominantly in mega (47%) and big (35%) cap stocks, with minimal exposure to medium and small caps. This reflects a conservative approach favoring established companies with potentially lower volatility but may limit opportunities for higher growth associated with smaller companies.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.20%

The dividend yield of 1.20% contributes to the portfolio's total return, providing a modest income stream in addition to potential capital gains. While not the focus for growth-oriented investors, dividends offer a passive income component and a slight cushion during market volatility.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from a very low total expense ratio (TER) of 0.03%, which is excellent for long-term growth. Lower costs mean more of the portfolio's returns are retained by the investor, a critical factor in compounding growth over time.

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