A balanced portfolio with a strong emphasis on global stock markets and low costs

Report created on Sep 11, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is structured with a 70% allocation to the Vanguard Total Stock Market Index Fund ETF Shares and a 30% allocation to the Vanguard Total International Stock Index Fund ETF Shares. This composition reflects a strategic decision to blend domestic and international equities, offering broad exposure across various geographies and sectors. The allocation between these two ETFs suggests a preference for significant exposure to the US market while still capturing the growth potential of international markets. Such a balance is crucial for diversification, potentially reducing volatility and improving risk-adjusted returns over the long term.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.24%, with a maximum drawdown of -34.64%. These metrics are essential for understanding the portfolio's return profile and risk exposure. The CAGR indicates a strong historical performance, likely outpacing inflation and deposit account yields by a considerable margin. However, the maximum drawdown highlights periods of significant value decline, which could test an investor's risk tolerance. It's important to note that past performance is not indicative of future results, and investors should consider their ability to withstand similar drawdowns in the future.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, suggests a wide range of possible performances for this portfolio. With a median projected growth of 337.3% and a high confidence level (991 out of 1,000 simulations) of positive returns, the forward-looking outlook appears optimistic. However, the broad spread from the 5th to the 67th percentile underscores the inherent uncertainty in any market projection. Investors should interpret these results as a spectrum of possibilities rather than guaranteed outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely invested in stocks (99%), with a minimal cash holding (1%). This asset class composition supports a growth-oriented investment strategy but comes with higher volatility compared to portfolios with significant allocations to bonds or other fixed-income assets. While the stock focus is aligned with the portfolio's balanced risk profile, investors should ensure their investment horizon and risk tolerance align with the potential for short-term market fluctuations.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is heavily weighted towards technology (27%), financial services (17%), and industrials (11%), with smaller allocations across consumer cyclicals, healthcare, and other sectors. This sector distribution reflects a growth-oriented approach, given the high weight in technology, but also maintains diversification across economic sectors. The concentration in technology and financial services, sectors known for their volatility, should be monitored, as significant market shifts in these areas could impact the portfolio's performance.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic allocation underscores a strong bias towards North America (72%), with diversified but smaller exposures to developed Europe (12%), Asia, and other regions. This allocation strategy benefits from the stability and growth potential of developed markets while still tapping into the dynamism of emerging markets. However, the heavy weighting towards North America may expose the portfolio to region-specific risks, and investors might consider whether a more balanced global distribution could align better with their diversification goals.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a preference for larger companies, with 42% in mega-cap and 31% in large-cap stocks. This skew towards bigger companies is likely a factor in the portfolio's historical resilience and growth, as these entities often have more stable earnings and dividends. However, the relatively smaller allocations to medium, small, and micro-cap stocks suggest room for greater diversification, potentially capturing the higher growth rates these smaller companies can offer.

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 current allocation between the two ETFs appears to be well-considered, balancing exposure to both US and international markets. However, optimizing this portfolio using the Efficient Frontier could reveal opportunities to adjust the allocation for an improved risk-return profile. This optimization process considers the historical returns, volatility, and correlation of the assets to suggest the 'best' portfolio mix. It's important to remember that optimization is based on past data, and future market conditions may differ. Regular reviews and adjustments are advisable to maintain an optimal balance.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.65%

The dividend yield of the portfolio averages 1.65%, with the international stock ETF contributing a higher yield (2.70%) compared to the domestic stock ETF (1.20%). This dividend income can provide a steady stream of cash flow, which is beneficial for income-seeking investors and can also be reinvested for compound growth. The balance between growth and income in this portfolio supports a long-term investment strategy, though investors should also consider the impact of taxes on dividend returns.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With a total expense ratio (TER) of 0.04%, the portfolio benefits from very low costs, which is crucial for maximizing long-term returns. Lower costs mean more of the investment's return is kept by the investor, a key advantage of using low-cost ETFs. This cost efficiency is a significant strength of the portfolio, aligning well with best practices in investment management that emphasize the importance of minimizing fees.

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