Balanced and highly diversified portfolio with a strong focus on stocks and emerging markets
Report created on Aug 28, 2025Risk profile
4/7
Diversification profile
5/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 60.00% -
VW Vanguard FTSE Emerging Markets Index Fund ETF Shares
VWO - US9220428588 30.00% -
GL SPDR® Gold Shares
GLD - US78463V1070 10.00%
The portfolio is predominantly invested in stocks, with a major allocation to the Vanguard S&P 500 ETF (60%) and a significant position in the Vanguard FTSE Emerging Markets Index Fund ETF Shares (30%). The inclusion of SPDR® Gold Shares (10%) introduces a non-stock asset class, aimed at providing a hedge against market volatility and inflation. This composition suggests a strategic balance between seeking growth through equities in both developed and emerging markets, and protecting value through gold. The high allocation to the S&P 500 ETF underscores a confidence in the long-term growth of large-cap U.S. companies, while the emerging markets ETF and gold shares add diversification and potential for higher returns, albeit with increased risk.
Growth
Historically, this portfolio has delivered a Compound Annual Growth Rate (CAGR) of 13.02%, with a maximum drawdown of -30.61%. The days contributing to 90% of returns number just 34, indicating that a few key periods have driven the majority of performance. This level of historical return is impressive, especially when considering the balanced risk profile. However, the significant drawdown highlights the portfolio's exposure to market volatility, particularly in times of economic stress. This historical performance, while strong, underscores the importance of understanding the potential for wide fluctuations in portfolio value over short periods.
Projection
Monte Carlo simulations, which use historical data to project future performance under a variety of market conditions, suggest a wide range of outcomes for this portfolio. With 993 out of 1,000 simulations showing positive returns, the projections are generally optimistic. The median projection indicates a potential for substantial growth (366% increase), with a high percentile outcome (67th) suggesting even more significant gains (535.3%). These projections, while encouraging, should be viewed with caution as they are based on past performance, which is not a reliable indicator of future results.
Asset classes
- Stocks 89%
- Other 10%
- Cash 1%
The portfolio's asset allocation leans heavily towards stocks (89%), with a minor allocation to gold (10%) and a negligible cash position (1%). This distribution aligns with the portfolio's balanced but growth-oriented strategy. The heavy stock allocation is poised to capture equity market growth, particularly from large-cap U.S. companies and emerging markets. However, the minimal diversification into non-stock assets like gold, though strategic, limits the portfolio's ability to mitigate risk during stock market downturns. A slight increase in gold or other alternative assets could enhance the portfolio's resilience against volatility.
Sectors
- Technology 27%
- Financials 15%
- Consumer Discretionary 10%
- Telecommunications 9%
- Industrials 7%
- Health Care 7%
- Consumer Staples 5%
- Energy 3%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
Sector allocation within the portfolio is heavily weighted towards technology (27%), financial services (15%), and consumer cyclicals (10%), reflecting a growth-oriented strategy. This sectoral distribution is common in portfolios focused on long-term growth, as these sectors often outperform in expanding economies. However, the high concentration in technology also introduces sector-specific risk, particularly sensitivity to interest rate changes and market sentiment shifts. Balancing this with more stable sectors like healthcare or consumer defensive could improve resilience without significantly compromising growth potential.
Regions
- North America 60%
- Asia Emerging 18%
- Asia Developed 6%
- Africa/Middle East 3%
- Latin America 2%
- Europe Developed 1%
Geographically, the portfolio is predominantly invested in North America (60%) and has a substantial allocation to Asia Emerging (18%). This reflects a strategic emphasis on the U.S. market, complemented by diversification into emerging markets in Asia, which offer growth opportunities but come with higher risk. The minimal exposure to Europe and Latin America, along with a negligible presence in Africa/Middle East, suggests potential areas for further diversification. Increasing allocations to underrepresented regions could enhance global exposure and reduce geographic concentration risk.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 15%
- No data 10%
- Small-cap 2%
The portfolio's market capitalization breakdown reveals a focus on mega (42%) and big (30%) cap stocks, indicative of a preference for stability and lower volatility associated with larger companies. Medium cap stocks represent 15%, offering a balance of growth potential and risk. The unknown category (10%) likely encompasses the gold ETF, which doesn't fit traditional market cap classifications. The small (2%) and micro (0%) allocations are minimal, reflecting the portfolio's conservative stance towards highly volatile investments. A slight increase in exposure to smaller cap stocks could offer higher growth potential, albeit with increased risk.
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 expected return of 13.02% is slightly below the optimal portfolio's expected return of 13.37% at the same risk level. This suggests room for improvement in asset allocation to achieve a more efficient risk-return ratio. Adjustments aimed at optimizing the portfolio could involve rebalancing asset classes, sectors, or geographic exposures to align more closely with the Efficient Frontier. However, it's important to consider transaction costs and tax implications before making significant changes. This optimization process is based on historical data, which may not fully predict future performance but can guide strategic adjustments.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.70%
- Weighted yield (per year) 1.53%
The portfolio's dividend yield, with the Vanguard S&P 500 ETF at 1.20% and the Vanguard FTSE Emerging Markets Index Fund ETF Shares at 2.70%, results in a total yield of approximately 1.53%. This yield contributes to the portfolio's total return, providing a steady income stream in addition to potential capital gains. For investors seeking both growth and income, this dividend strategy balances the pursuit of appreciation with the generation of cash flow. However, investors prioritizing higher income may explore opportunities to slightly increase the overall yield without significantly altering the portfolio's risk profile.
Ongoing product costs
- SPDR® Gold Shares 0.40%
- Vanguard S&P 500 ETF 0.03%
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.08%
The portfolio's costs are impressively low, with a total expense ratio (TER) of just 0.08%. This efficiency is largely due to the low-cost nature of the Vanguard ETFs and the relatively moderate fee for the SPDR® Gold Shares. Keeping costs low is crucial for enhancing long-term returns, as even small differences in fees can compound significantly over time. This focus on cost efficiency is a strong aspect of the portfolio, aligning with best practices for long-term investment success.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey