A balanced portfolio with strong diversification and a moderate risk profile

Report created on Mar 22, 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 composed of a mix of ETFs, a common stock, and a money market fund, with the Vanguard Total Stock Market Index Fund ETF holding the largest weight at 30%. The composition leans towards equities, comprising 80% of the portfolio, while bonds and cash equivalents make up the remaining 20%. Compared to a typical balanced portfolio, this allocation leans slightly more towards equities, which could potentially enhance growth. However, maintaining a balance with bonds and cash equivalents helps manage risk, especially during market downturns. Consider reviewing the allocation periodically to ensure it aligns with your risk tolerance and financial goals.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 11.49%. This indicates a strong growth trajectory, outperforming many traditional benchmarks. However, the portfolio has experienced a significant maximum drawdown of -27.74%, highlighting potential volatility. While past performance does not guarantee future results, understanding these trends can help set realistic expectations. It's essential to regularly review performance against personal benchmarks to ensure the portfolio continues to meet your financial objectives.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes. With 1,000 simulations, the portfolio shows a positive return in 958 cases, with an average annualized return of 11.15%. Monte Carlo simulations use historical data to estimate future performance, but they have limitations and should be viewed as one of many tools in decision-making. These projections indicate the portfolio's potential for substantial growth, but it's crucial to remain aware of the inherent uncertainties and continue monitoring economic conditions.

Asset classes Info

  • Stocks
    80%
  • Bonds
    10%

The portfolio's asset allocation is heavily weighted towards stocks at 80%, with bonds at 10%. This allocation aligns with a balanced risk profile, providing growth potential while offering some stability through fixed income. Compared to benchmarks, the portfolio maintains a typical equity-bond split for balanced investors. This mix can help achieve a blend of growth and risk management. Reviewing this allocation periodically can ensure it remains aligned with your evolving financial goals and market conditions.

Sectors Info

  • Financials
    24%
  • Technology
    13%
  • Industrials
    8%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    5%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

The sector allocation reveals a concentration in financial services at 24%, followed by technology at 13%. This distribution reflects a diversified approach but with notable exposure to financials. Sector concentration can impact portfolio volatility, as seen with tech-heavy portfolios during interest rate changes. While diversification is evident, it's important to monitor sector performance and trends. Adjusting sector weights over time can help mitigate risks and capitalize on emerging opportunities.

Regions Info

  • North America
    50%
  • Europe Developed
    20%
  • Asia Emerging
    6%
  • Asia Developed
    2%
  • Latin America
    2%
  • Africa/Middle East
    1%

The geographic allocation is predominantly in North America at 50%, with notable exposure to developed Europe at 20%. This reflects a focus on stable, mature markets, which can provide consistent returns. However, the portfolio has limited exposure to emerging markets, which could offer higher growth potential. Geographic diversification is key to managing risk, as different regions can perform variably. Consider evaluating the regional allocation to ensure it aligns with your risk tolerance and growth objectives.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    19%
  • Mid-cap
    9%
  • Small-cap
    7%
  • Micro-cap
    6%

The portfolio's market capitalization distribution is concentrated in mega-cap stocks at 39%, with a mix of big, medium, small, and micro caps. This provides a balance between stability and growth potential. Mega-cap stocks tend to offer stability, while smaller caps can drive higher growth. This distribution is typical for balanced portfolios, but it's vital to review market cap exposure periodically to ensure it aligns with your risk tolerance and investment goals.

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 suggests a more efficient portfolio with a higher expected return of 3.63% at the same risk level. The Efficient Frontier represents the best possible risk-return ratio for a given set of assets. This optimization focuses on reallocating existing assets to achieve better efficiency. Regularly reviewing and adjusting the portfolio using these principles can enhance risk-return dynamics and support long-term financial success.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Xtrackers MSCI Europe Hedged Equity ETF 0.10%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 4.50%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.70%
  • Vanguard Federal Money Market Fund Investor Shares 4.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.90%

The portfolio's overall dividend yield is 1.90%, with contributions from various ETFs and funds. Dividends can provide a steady income stream, which is valuable for income-focused investors. The yield aligns with a balanced portfolio, offering both growth and income potential. It's important to monitor dividend yields over time, as they can fluctuate with market conditions. Adjusting the portfolio to maintain a desired income level can be beneficial, especially for those nearing retirement.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Xtrackers MSCI Europe Hedged Equity ETF 0.46%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 0.39%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.17%

The portfolio's total expense ratio (TER) is 0.17%, which is relatively low and supports better long-term performance. Lower costs mean more of your returns are retained, enhancing overall growth potential. The cost structure aligns well with best practices for maintaining a cost-effective portfolio. Continuously monitoring and minimizing costs can further improve returns and help achieve financial goals more efficiently.

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