A balanced portfolio with strong U.S. focus and moderate diversification across sectors

Report created on Jan 29, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists primarily of ETFs, with a significant 40% allocation to the Vanguard S&P 500 ETF. The Vanguard Total Stock Market Index Fund ETF and Fidelity Total Market Index Fund together add another 35%, while the Invesco QQQ Trust and Schwab U.S. Dividend Equity ETF each hold 10%. The Vanguard Total International Stock Index Fund ETF Shares rounds out the portfolio at 5%. This composition leans heavily towards U.S. equities, with a focus on large-cap stocks. While the allocation is consistent with a balanced risk profile, it could benefit from increased diversification into international and alternative asset classes.

Growth Info

The portfolio has shown impressive historic performance, with a Compound Annual Growth Rate (CAGR) of 14.15%. This growth rate indicates strong returns over the period analyzed, significantly outperforming many traditional benchmarks. However, the maximum drawdown of -33.42% highlights the potential for significant losses during market downturns. While past performance is not indicative of future results, understanding these metrics is crucial. Investors should be prepared for potential volatility and consider strategies to mitigate downside risk, such as diversifying further or exploring hedging options.

Projection Info

Monte Carlo simulations, which use historical data to model potential future outcomes, suggest a wide range of possible returns. With a median projection of 441.8% and 989 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for future growth. However, it's important to note that these projections are based on past data and cannot predict future market conditions. Investors should maintain a balanced approach, regularly reviewing and adjusting the portfolio to align with their evolving financial goals and risk tolerance.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 100% allocation to equities. This focus on a single asset class can offer substantial growth potential, but it also increases exposure to equity market volatility. Compared to a more diversified benchmark, the lack of bonds or alternative investments may limit risk mitigation, particularly during market downturns. To enhance diversification, consider incorporating fixed income or other asset classes, which can provide stability and income, balancing the higher risk associated with equities.

Sectors Info

  • Technology
    31%
  • Financials
    13%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Consumer Discretionary
    1%

The portfolio exhibits a notable concentration in the technology sector, accounting for 31% of the total allocation. Other significant sectors include financial services (13%) and healthcare (11%). While tech-heavy portfolios often benefit from growth potential, they may also experience higher volatility, particularly during periods of interest rate changes. This sector allocation aligns closely with common benchmarks, offering a well-rounded exposure. However, investors should monitor sector trends and consider rebalancing if one sector becomes overly dominant, to maintain a balanced risk profile.

Regions Info

  • North America
    95%
  • Europe Developed
    2%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, the portfolio is predominantly focused on North America, with 95% of assets invested in the region. This heavy U.S. concentration aligns with many domestic benchmarks but may limit exposure to international growth opportunities. With only 5% allocated to international equities, the portfolio could benefit from increased geographic diversification. By expanding investments into developed and emerging markets, investors can potentially reduce regional risk and capitalize on global economic trends, enhancing long-term growth potential.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    36%
  • Mid-cap
    19%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization distribution is skewed towards mega-cap stocks, which comprise 41% of the allocation. Large-cap stocks follow with 36%, while medium, small, and micro caps make up the remainder. This tilt towards larger companies offers stability and lower volatility, as these firms typically have established operations and revenue streams. However, smaller-cap stocks can provide higher growth potential. Balancing exposure across different market capitalizations could enhance diversification and capture opportunities across various company sizes.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Fidelity Total Market Index Fund
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The portfolio contains a group of highly correlated assets, including the Vanguard S&P 500 ETF, Fidelity Total Market Index Fund, and Vanguard Total Stock Market Index Fund ETF Shares. High correlation means these assets tend to move together, limiting diversification benefits. During market downturns, this can lead to increased risk. To optimize the portfolio, consider reducing exposure to overlapping investments and introducing assets with lower correlation. This strategy can enhance diversification, reduce risk, and improve overall portfolio resilience.

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, a concept that identifies the best possible risk-return ratio for a given set of assets. Currently, the portfolio's mix may not be fully optimized due to the presence of highly correlated assets. By adjusting allocations among existing holdings, investors can potentially achieve a more efficient balance between risk and return. This optimization process focuses on maximizing returns for a given level of risk, rather than seeking diversification alone, helping to enhance overall portfolio performance.

Dividends Info

  • Fidelity Total Market Index Fund 0.20%
  • Invesco QQQ Trust 0.50%
  • Schwab U.S. Dividend Equity ETF 3.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.36%

The portfolio's overall dividend yield stands at 1.36%, with notable contributions from the Schwab U.S. Dividend Equity ETF and Vanguard Total International Stock Index Fund ETF Shares. Dividends can provide a steady income stream, which is particularly appealing for investors seeking regular cash flow. However, the yield is relatively modest, reflecting the portfolio's growth-oriented focus. Investors seeking higher income may consider increasing allocation to dividend-focused investments or exploring other income-generating asset classes, while maintaining a balanced growth strategy.

Ongoing product costs Info

  • Fidelity Total Market Index Fund 0.02%
  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The total expense ratio (TER) of the portfolio is 0.05%, which is impressively low. This efficient cost structure supports better long-term performance by minimizing the drag on returns. Low fees are a key advantage, allowing more of the portfolio's growth to benefit the investor. Maintaining this cost efficiency is crucial, and investors should continue to monitor expenses, ensuring that any changes in the portfolio do not lead to unnecessary cost increases. Staying vigilant about costs can significantly enhance the portfolio's overall return.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

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