A broadly diversified portfolio with a strong U.S. focus and balanced risk exposure

Report created on Mar 6, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of equity ETFs, with a significant 75% allocation to the Vanguard Total Stock Market Index Fund ETF. This choice provides broad exposure to the U.S. stock market. The remaining portfolio consists of international stocks, infrastructure, gold, and short-term treasury bonds. Compared to a typical balanced benchmark, the portfolio is heavily weighted towards equities, which can drive growth but also increase volatility. Maintaining a diversified mix helps balance growth potential with risk management. Consider periodically reviewing the allocation to ensure it aligns with your evolving financial goals and risk tolerance.

Growth Info

The portfolio has delivered a Compound Annual Growth Rate (CAGR) of 9.38%, indicating strong historical performance. A hypothetical $10,000 investment would have grown significantly over time, surpassing many traditional benchmarks. However, the maximum drawdown of -24.26% highlights potential volatility during market downturns. This performance underscores the importance of balancing risk with reward. While past performance is no guarantee of future results, maintaining a diversified portfolio can help mitigate severe losses and provide more stable returns over time.

Projection Info

Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential portfolio values. The 50th percentile indicates a potential 216.3% increase, while the 5th percentile shows a 25.2% gain. Despite the uncertainty inherent in projections, the high number of positive simulations (975 out of 1,000) suggests a favorable outlook. This reinforces the importance of staying invested and maintaining a diversified approach. Regularly reviewing your portfolio and making adjustments as needed can help you navigate future market conditions effectively.

Asset classes Info

  • Stocks
    94%
  • Cash
    2%

With 94% of the portfolio in stocks, there's a strong emphasis on equity growth. This allocation is higher than typical balanced benchmarks, which often include more fixed income or alternative assets. While this can enhance growth potential, it may also increase volatility. The small allocation to cash and gold provides some diversification, but consider whether additional asset classes like bonds could improve risk-adjusted returns. Regularly reassessing your asset mix can help ensure it aligns with your investment goals and risk appetite.

Sectors Info

  • Technology
    26%
  • Financials
    13%
  • Industrials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio features a notable 26% allocation to the technology sector, which is higher than many benchmarks. While tech stocks can drive growth, they may also be more volatile, especially during interest rate changes. Other sectors like financial services, industrials, and consumer cyclicals provide balance. This sectoral diversity supports resilience against sector-specific downturns. Consider monitoring sector trends and potential over-concentration. Adjusting sector weights periodically can help maintain a balanced risk profile and capitalize on emerging opportunities.

Regions Info

  • North America
    82%
  • Europe Developed
    6%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The portfolio's geographic allocation is heavily skewed towards North America, with 82% exposure. This U.S. focus can benefit from domestic market strength but may limit diversification benefits from other regions. International exposure is modest, with small allocations to Europe, Asia, and other regions. Consider whether increasing international diversification could enhance returns and reduce risk. A more balanced geographic allocation can help mitigate regional economic risks and take advantage of global growth opportunities.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    28%
  • Mid-cap
    20%
  • Small-cap
    7%
  • Micro-cap
    2%

The portfolio is well-diversified across market capitalizations, with 37% in mega-cap stocks and significant exposure to big, medium, and small caps. This balance can provide stability from established companies while capturing growth from smaller firms. However, the 2% allocation to micro-caps is minimal, limiting potential high-risk, high-reward opportunities. Consider whether the current size distribution aligns with your risk tolerance and growth objectives. Adjusting market cap weights can help optimize the portfolio's risk-return profile.

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.

Click on the colored dots to explore allocations.

The portfolio can be optimized using the Efficient Frontier, which identifies the best risk-return ratio based on current assets. An optimized portfolio at the same risk level could achieve an expected return of 3.44%, slightly higher than the current projection. However, this optimization assumes no changes in asset selection. Consider whether reallocating among existing assets could improve efficiency. Regularly reviewing and adjusting your portfolio can help ensure it remains aligned with your risk-return preferences and financial goals.

Dividends Info

  • Global X U.S. Infrastructure Development ETF 0.60%
  • iShares® 0-3 Month Treasury Bond ETF 4.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.49%

With a total dividend yield of 1.49%, the portfolio offers moderate income potential. The Vanguard Total International Stock Index Fund ETF contributes a 3.10% yield, enhancing overall income. While dividends can provide a steady income stream, the focus remains on growth. Investors seeking higher income may consider increasing allocations to dividend-paying assets. Balancing growth and income strategies can help achieve a more stable return profile, especially for those nearing retirement or seeking passive income.

Ongoing product costs Info

  • iShares® Gold Trust Micro 0.09%
  • Global X U.S. Infrastructure Development ETF 0.47%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, supporting better long-term performance by minimizing costs. The Vanguard ETFs, with their low expense ratios, contribute significantly to this efficiency. Keeping costs low is crucial for maximizing net returns over time. Regularly reviewing and comparing fund expenses can help maintain cost-effectiveness. Consider whether cost savings could be further enhanced by exploring other low-cost investment options or negotiating fees with financial advisors.

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