A balanced and broadly diversified portfolio with a strong focus on stocks and low costs

Report created on Sep 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of two ETFs, with an 80% allocation to the Vanguard Total Stock Market Index Fund ETF Shares and a 20% allocation to the Vanguard Total International Stock Index Fund ETF Shares. This structure showcases a significant tilt towards the U.S. stock market, reflecting a strategy that leverages the historical growth and stability of U.S. equities. The portfolio's classification as broadly diversified is supported by its exposure across a wide range of sectors and geographies, though it is heavily weighted towards North America.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.75%, with a maximum drawdown of -34.76%. The days contributing to 90% of the returns number just 31, indicating that a few key periods have driven the majority of the portfolio's performance. This historical performance, while impressive, underscores the importance of timing in investments and suggests that the portfolio's returns can be significantly impacted by market volatility.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential future performances for this portfolio. With key percentiles showing potential annualized returns from 46.1% at the 5th percentile to 498.8% at the 67th percentile, the simulations indicate a strong likelihood of positive future returns, as evidenced by 982 out of 1,000 simulations ending positively. However, it's crucial to remember that these projections are not guarantees and are subject to the limitations of using past data to predict future outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation reflects a growth-oriented strategy but also entails higher volatility and risk compared to portfolios with a more significant allocation to bonds or other asset classes. The lack of diversification across asset classes could be a concern during market downturns, where stocks are generally more affected than bonds or other defensive assets.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation is heavily concentrated in technology (29%), financial services (16%), and consumer cyclicals (10%), among others. This concentration in tech and cyclical sectors suggests the portfolio is positioned to benefit from economic growth but may also be more vulnerable to market corrections or downturns in these sectors. Diversification across sectors is generally good, but the heavy weighting in technology underscores a risk of volatility.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic allocation is predominantly in North America (81%), with smaller exposures to Europe Developed (8%) and various emerging and developed markets in Asia and Australasia. This geographic distribution indicates a strong home bias towards the U.S. market, which has historically performed well but also suggests potential underexposure to international growth opportunities and diversification benefits.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a preference for large-cap stocks (Mega 42%, Big 31%), which tend to be more stable than smaller companies but might offer lower growth potential. Medium, small, and micro-cap stocks collectively make up 27% of the portfolio, providing some level of growth potential and diversification away from the largest companies.

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.

Based on the Efficient Frontier, this portfolio's current allocation suggests it is positioned near the optimal risk-return ratio for its given asset composition. However, considering the portfolio's heavy reliance on stock ETFs, there may be opportunities to further optimize by diversifying across more asset classes or adjusting the sector and geographic exposures to reduce risk without significantly sacrificing returns.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.50%

The portfolio's dividend yield stands at 1.50%, with the U.S. component yielding 1.20% and the international component yielding 2.70%. This yield contributes to the portfolio's total return and provides a source of income, though the focus remains on capital appreciation given the growth-oriented nature of the stock allocations.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from exceptionally low costs, with Total Expense Ratios (TERs) of 0.03% for the U.S. stock ETF and 0.05% for the international stock ETF. These low costs are a significant advantage, enhancing long-term return potential by minimizing the drag on performance due to fees.

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