A balanced and diversified portfolio with a strategic mix of stocks, bonds, and retirement-focused funds

Report created on May 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio showcases a well-structured blend of assets, predominantly focused on stock ETFs, including a significant allocation towards a target retirement fund. With 83% in stocks, 15% in bonds, and a minor 2% in cash, it reflects a balanced approach, leaning towards growth while maintaining a cushion against market volatility through bonds. This composition aligns with a balanced risk profile, aiming for long-term capital appreciation with a moderate level of risk tolerance.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 8.88%, with a maximum drawdown of -30.18%. These figures suggest a resilient performance through market cycles, underpinned by the diversification across asset classes and geographic regions. The days contributing most to returns highlight the portfolio's ability to capture significant market upswings, a testament to its strategic asset allocation.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, we see a wide range of outcomes. The median projection suggests a potential 151.2% return, indicating optimism for long-term growth. However, it's crucial to remember that these simulations are hypothetical and cannot guarantee future results, emphasizing the importance of ongoing portfolio monitoring and adjustment.

Asset classes Info

  • Stocks
    83%
  • Bonds
    15%
  • Cash
    2%

The asset class distribution is well-aligned with the portfolio's balanced risk classification, with a heavy tilt towards equities for growth and bonds for income and stability. This allocation supports the portfolio's objectives of capital appreciation with a buffer against market downturns, though the minimal cash holding limits liquidity for opportunistic investments or rebalancing.

Sectors Info

  • Technology
    19%
  • Financials
    16%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    6%
  • Consumer Discretionary
    6%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Consumer Discretionary
    3%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocations are broadly diversified, with the largest exposures in technology and financial services. This sectoral spread mitigates sector-specific risks and capitalizes on growth opportunities across the economy. However, the significant weight in technology, a sector known for volatility, underscores the portfolio's growth orientation and corresponding risk level.

Regions Info

  • North America
    52%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic diversification enhances the portfolio's resilience against regional economic downturns, with a substantial allocation to North America and meaningful exposures to developed Europe and emerging Asian markets. This global spread helps capture growth in diverse economic environments, though the relatively lower exposure to emerging markets may limit potential high-growth opportunities.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    26%
  • Mid-cap
    16%
  • Small-cap
    4%
  • Micro-cap
    1%

The market capitalization breakdown, favoring mega and big-cap stocks, suggests a preference for established, less volatile companies. While this may stabilize the portfolio during market downturns, the limited exposure to small and micro-cap stocks could restrict potential high-growth opportunities, which are often found in these segments.

Redundant positions Info

  • VANGUARD TARGET RETIREMENT 2055 FUND INVESTOR SHARES
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the target retirement fund and the total stock market ETF indicates overlapping exposures, reducing the portfolio's diversification benefits. This redundancy suggests an area for optimization, potentially by reallocating assets to reduce overlap and enhance the portfolio's overall risk-adjusted performance.

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.

Optimizing the portfolio involves addressing the identified overlap between the target retirement fund and the total stock market ETF. By reallocating funds to reduce this redundancy, the portfolio could achieve a more efficient risk-return profile. This process should consider the investor's risk tolerance, investment horizon, and financial goals to ensure that any adjustments align with their overall strategy.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • VANGUARD TARGET RETIREMENT 2055 FUND INVESTOR SHARES 2.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.27%

The portfolio's dividend yield contributes to its total return, providing a steady income stream alongside capital appreciation. This yield, averaging 2.27%, enhances the portfolio's attractiveness for investors seeking both growth and income, particularly in a low-interest-rate environment where traditional income sources may offer lower returns.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • VANGUARD TARGET RETIREMENT 2055 FUND INVESTOR SHARES 0.08%
  • 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) 0.05%

With a total expense ratio (TER) of 0.05%, the portfolio benefits from low costs, maximizing the potential for net returns. This cost efficiency is particularly advantageous over the long term, where even small differences in expenses can have a significant impact on wealth accumulation.

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