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Balanced and diversified portfolio with a focus on long-term growth and moderate risk

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio exhibits a well-considered balance between equities and fixed income, with a 77% allocation to stocks and a 22% allocation to bonds. The majority stake in the Vanguard Total Stock Market Index Fund ETF Shares indicates a strong tilt towards broad market exposure in the US, complemented by significant investments in international and emerging markets for global diversification. The inclusion of treasury and TIPS ETFs adds a layer of inflation protection and income stability, aligning with a balanced risk profile.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.25%, with a maximum drawdown of -27.44%. These figures suggest a resilient performance across various market cycles, balancing growth with risk management effectively. The days contributing to 90% of returns highlight the portfolio's ability to capture significant gains during market upswings, illustrating the benefits of staying invested over the long term despite short-term volatility.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes with a median increase of 157.2%. It's important to remember, though, that while these simulations can provide insight into potential future performance, they cannot guarantee specific returns. The positive returns in 938 out of 1,000 simulations underscore the portfolio's strong foundation for growth, albeit with inherent market risks.

Asset classes Info

  • Stocks
    77%
  • Bonds
    22%
  • Cash
    1%

The allocation across asset classes with a dominant position in stocks (77%) versus bonds (22%) is indicative of a growth-oriented strategy with a balanced approach to risk. This mix supports capital appreciation while using fixed income to provide stability and income, a composition that aligns with the portfolio's risk classification. The minimal cash holding ensures that the portfolio is fully invested, optimizing potential returns.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation reveals a diversified approach, with technology (19%) and financial services (14%) leading, followed by a mix of consumer cyclicals, industrials, and healthcare. This sector spread is reflective of the broader market composition, which may help in capturing growth across different economic cycles. However, the technology tilt implies a higher volatility and growth potential, which should be monitored given the sector's cyclical nature.

Regions Info

  • North America
    49%
  • Asia Emerging
    9%
  • Europe Developed
    8%
  • Asia Developed
    4%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%

Geographic distribution emphasizes a strong North American focus (49%) while maintaining meaningful exposure to emerging Asia (9%) and developed Europe (8%). This geographical spread enhances diversification, reducing the portfolio's vulnerability to regional downturns and capitalizing on global growth opportunities. The emerging markets exposure, though moderate, introduces higher growth potential with corresponding risk.

Market capitalization Info

  • Mega-cap
    33%
  • Large-cap
    24%
  • Mid-cap
    14%
  • Small-cap
    4%
  • Micro-cap
    1%

The market capitalization breakdown showcases a preference for mega (33%) and big (24%) cap stocks, which tend to offer stability and liquidity. Medium, small, and micro caps, although less represented, are crucial for diversification and growth potential. This cap-size distribution is well-suited for investors seeking a balance between risk and return, leveraging the stability of larger companies while capturing the growth of smaller firms.

Redundant positions Info

  • Vanguard Dividend Appreciation Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard Dividend Appreciation and the Total Stock Market ETFs suggests an overlap that might not be contributing significantly to diversification. Reducing redundancy in holdings can enhance portfolio efficiency by ensuring each asset plays a unique role in risk and return profiles, thereby potentially improving the overall portfolio 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.

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Optimizing the portfolio involves addressing the noted asset correlation by considering the reduction or reallocation of overlapping investments. This step can refine the portfolio's diversification strategy, potentially leading to improved risk-adjusted returns. Employing the Efficient Frontier concept could further enhance this optimization, aiming for an ideal balance between risk and return without necessarily increasing exposure.

Dividends Info

  • Schwab U.S. TIPS ETF 2.70%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.40%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.18%

Dividend yields across the portfolio average to 2.18%, contributing to the total return and providing a steady income stream. This is particularly beneficial in a balanced portfolio, where dividends can offer a buffer during market downturns and contribute to compounding over time. The diversified sources of dividends, from TIPS to international equities, also underscore the portfolio's comprehensive approach to income generation.

Ongoing product costs Info

  • Schwab U.S. TIPS ETF 0.03%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The overall portfolio cost, represented by the Total Expense Ratio (TER) of 0.04%, is impressively low, enhancing net returns for the investor. Keeping costs minimal is crucial in maximizing long-term investment growth, as even small differences in fees can significantly impact compounded returns over time. This cost efficiency is a strong aspect of the portfolio's construction.

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