A balanced and broadly diversified portfolio with a strong focus on major markets
Report created on Aug 9, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 70.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 30.00%
This portfolio is structured with a 70% allocation to a Vanguard S&P 500 ETF and a 30% allocation to the Vanguard Total International Stock Index Fund ETF Shares. The heavy weighting towards the S&P 500 ETF indicates a strong bias towards US equities, which is complemented by international exposure through the Vanguard Total International Stock ETF. This composition reflects a balanced approach, aiming to capture growth in the US while also diversifying globally. The portfolio's diversification is broad, as indicated by its classification and score, covering multiple sectors and geographies.
Growth
Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.69%, with a maximum drawdown of -33.82%. These figures suggest a relatively strong performance, with the potential for significant volatility, as evidenced by the drawdown. The days that constitute 90% of returns being concentrated in 29.0 days highlight the impact of short-term significant gains on overall performance. This historical performance, while impressive, should be viewed with the understanding that past results do not guarantee future returns.
Projection
The Monte Carlo simulation, based on 1,000 iterations, forecasts a wide range of potential outcomes. With 99.2% of simulations resulting in positive returns, this suggests a high likelihood of future gains. However, the broad range between the 5th percentile and the 67th percentile outcomes underscores the uncertainty and risk involved. These projections provide valuable insight but come with the caveat that they are based on historical data, which may not fully predict future market conditions.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's assets are almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation underscores a growth-oriented strategy but also reflects a higher risk level due to the lack of diversification across asset classes. While stocks generally offer higher returns over the long term, they are also more volatile. Including other asset classes could provide a buffer against market fluctuations.
Sectors
- Technology 27%
- Financials 17%
- Consumer Discretionary 11%
- Industrials 10%
- Health Care 9%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 3%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
Sectoral allocation is concentrated in technology, financial services, and consumer cyclicals, which are sectors that can offer high growth but also come with higher volatility. The significant stake in technology (27%) is noteworthy, as this sector can be particularly sensitive to market changes and economic cycles. While the sectoral spread is broad, covering all major areas, the heavy emphasis on a few sectors could increase risk during downturns in those areas.
Regions
- North America 72%
- Europe Developed 12%
- Asia Emerging 5%
- Japan 5%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio is heavily weighted towards North America (72%), with diversified but smaller allocations across developed Europe, emerging Asia, and Japan. This distribution reflects a strong reliance on the US and developed markets for growth, potentially limiting exposure to faster-growing emerging markets. While this can be seen as a conservative approach, diversifying further into emerging markets could offer higher growth opportunities and risk mitigation through geographical spread.
Market capitalization
- Mega-cap 46%
- Large-cap 33%
- Mid-cap 17%
- Small-cap 2%
The focus on mega (46%) and big (33%) cap stocks indicates a preference for established, large companies, which typically offer stability and steady growth. However, the relatively small allocation to medium (17%), small (2%), and micro (0%) cap stocks suggests a missed opportunity for higher growth, albeit with increased risk. Balancing market capitalization exposure could enhance returns while managing volatility.
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's current allocation suggests it is positioned near the Efficient Frontier, indicating an optimal risk-return balance based on historical data. However, optimization is an ongoing process, and regularly reviewing the allocation in light of changing market conditions and personal financial goals is crucial. Adjustments may be necessary to maintain an optimal balance as the investment landscape evolves.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.68%
The dividend yields from the Vanguard S&P 500 ETF (1.20%) and the Vanguard Total International Stock Index Fund ETF Shares (2.80%) contribute to a total yield of 1.68%. This indicates a modest income component to the portfolio's total return. For investors seeking income, especially in retirement, focusing on higher-yielding assets or sectors could enhance the portfolio's income generation capabilities.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.04%
With total portfolio costs averaging 0.04%, the portfolio benefits from exceptionally low expenses, which is commendable. Lower costs translate directly to higher net returns over time, making this a significant strength of the portfolio. Investors should continue to prioritize cost efficiency when considering future adjustments or additional investments.
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