This portfolio has only about 10 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced and Broadly Diversified Portfolio with Strong Geographic Spread and Sector Allocation

Report created on Jul 24, 2024

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 composed of two main ETFs: the Schwab U.S. Dividend Equity ETF and the Vanguard Total International Stock Index Fund ETF Shares, each making up 50% of the portfolio. This combination provides a balanced exposure to both U.S. dividend-paying stocks and international equities. Such a composition offers a good mix of domestic and global market exposure, which is essential for diversification and risk management. The balanced allocation suggests a moderate risk approach, suitable for investors looking for growth with some level of income through dividends.

Growth Info

Historically, the portfolio has shown a compound annual growth rate (CAGR) of 8.15%, which is quite respectable. However, the maximum drawdown of -33.89% indicates significant volatility during market downturns. This historical performance suggests that while the portfolio has the potential for solid returns, it can also experience substantial declines during adverse market conditions. Investors should be aware of this volatility and ensure they are comfortable with the potential for such drawdowns.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The median outcome (50th percentile) suggests an end portfolio value increase of 190.72%, with a best-case scenario (67th percentile) of 296.41%. Even in the worst-case scenario (5th percentile), the portfolio shows a slight decline of -1.4%. Monte Carlo simulations provide a range of possible outcomes, helping investors understand the potential risks and rewards. This projection indicates a favorable outlook, but it's essential to remain aware of the inherent uncertainties.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, making up 98.525035% of the total allocation, with minimal exposure to cash (1.405765%) and other assets (0.06884%). This high equity exposure suggests a focus on growth, but it also increases the portfolio's susceptibility to market volatility. While equities generally offer higher returns over the long term, adding some bonds or other fixed-income assets could help balance the risk and provide more stability during market downturns.

Sectors Info

  • Financials
    19%
  • Industrials
    14%
  • Health Care
    12%
  • Technology
    11%
  • Consumer Discretionary
    11%
  • Consumer Staples
    11%
  • Energy
    9%
  • Telecommunications
    5%
  • Basic Materials
    5%
  • Real Estate
    2%
  • Utilities
    1%

The sector allocation is quite diversified, with significant exposure to Financial Services (18.5476%), Industrials (14.493385%), Healthcare (12.037425%), and Technology (11.197565%). This broad sector diversification helps mitigate risks associated with any single industry. However, the portfolio is slightly underweight in Utilities and Real Estate, which are traditionally more stable sectors. Including a bit more from these sectors could help reduce overall portfolio volatility and provide more consistent returns.

Regions Info

  • North America
    54%
  • Europe Developed
    20%
  • Japan
    8%
  • Asia Emerging
    7%
  • Asia Developed
    5%
  • Australasia
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographically, the portfolio has a broad international exposure with 53.5675% in North America, 20.04961% in Europe Developed, and smaller allocations across Japan, Asia Emerging, Asia Developed, and other regions. This geographic diversification reduces the risk associated with economic downturns in any single region. However, the portfolio could benefit from a closer look at the emerging markets allocation to ensure it aligns with the investor's risk tolerance and growth expectations.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.50%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 3.25%

The Schwab U.S. Dividend Equity ETF provides a steady stream of dividend income, which can be an attractive feature for income-focused investors. However, the Vanguard Total International Stock Index Fund ETF Shares may offer lower dividends but higher growth potential. Balancing these two aspects can provide a mix of income and growth. Reinvesting dividends can also help compound returns over time, enhancing the portfolio's long-term growth prospects.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio has a very low total expense ratio (TER) of 0.07%, which is excellent for cost-conscious investors. Lower investment costs mean more of the returns are kept by the investor, which can significantly impact long-term performance. Maintaining a low-cost structure is crucial for maximizing net returns. Investors should continue to monitor and minimize fees where possible, ensuring they are not eroding their investment gains unnecessarily.

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