A balanced portfolio with a strong focus on US equities and international diversification

Report created on May 27, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is structured with a 70% allocation in the Vanguard S&P 500 ETF and a 30% allocation in the Vanguard Total International Stock Index Fund ETF Shares. This mix demonstrates a strong bias towards US equities while still maintaining significant exposure to international markets. The simplicity of this two-ETF strategy underlines a focus on broad market exposure, leveraging the diversification benefits of investing across a wide range of sectors and geographies.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.80%, with a maximum drawdown of -33.83%. These figures suggest a resilient performance through various market conditions, highlighting the benefits of combining US and international equities. However, it's crucial to remember that past performance is not indicative of future results, and investors should consider their risk tolerance and investment horizon when evaluating these numbers.

Projection Info

Monte Carlo simulations, which run numerous hypothetical scenarios to project future performance, show a wide range of outcomes. With a median projection of a 255.1% return and 969 out of 1,000 simulations yielding positive returns, the forward-looking perspective remains optimistic. However, these simulations are based on historical data and assumptions, which may not accurately predict future market movements.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (99%), with a minimal cash reserve (1%). This allocation aligns with the portfolio's balanced risk profile but leans towards a higher risk and return potential given the substantial equity exposure. Diversifying across more asset classes could provide additional risk mitigation, especially during market downturns.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation covers a broad spectrum, with technology (26%) and financial services (17%) being the most prominent. This sector spread is reflective of the current global market landscape, where technology plays a significant role. However, the concentration in tech and finance sectors could introduce sector-specific risks, warranting a review to ensure alignment with the investor's risk appetite.

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%

Geographic distribution shows a heavy North American focus (72%), complemented by diversified international exposure, including developed Europe (12%) and emerging Asian markets (5%). This geographic spread supports risk mitigation through global diversification, though the portfolio may benefit from increased exposure to emerging markets for potential growth opportunities.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    2%

The market capitalization breakdown reveals a preference for larger companies (Mega 46%, Big 33%), which typically offer more stability than their smaller counterparts. However, the relatively low allocation to small (2%) and micro (0%) cap stocks limits exposure to high-growth potential segments, which could be an area for potential enhancement.

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 well-positioned on the Efficient Frontier, suggesting an optimal risk-return balance based on historical data. However, continuous monitoring and occasional rebalancing are essential to maintain this efficiency, especially as market conditions evolve.

Dividends Info

  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.78%

The portfolio's dividend yield stands at 1.78%, with the international ETF contributing a higher yield (2.90%) than its US counterpart (1.30%). This yield contributes to the portfolio's total return, offering a steady income stream in addition to potential capital gains. Investors seeking income alongside growth may find this balance appealing.

Ongoing product costs Info

  • 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 low expense ratios typical of Vanguard ETFs. Reducing investment costs is crucial for enhancing long-term returns, and this portfolio aligns well with cost-efficient investing principles.

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