Balanced portfolio with a strong focus on US stocks and high technology sector exposure

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

The portfolio's composition is heavily weighted towards the Vanguard Total Stock Market Index Fund ETF Shares, making up 80% of the allocation, with the remaining 20% invested in the Vanguard Total International Stock Index Fund ETF Shares. This allocation reflects a strong bias towards US equities, with a broad diversification across sectors and geographies, albeit with a notable underrepresentation in emerging markets and smaller market capitalizations. The heavy weighting towards a single country and asset class, while broadly diversified within those parameters, suggests a moderate approach to risk-taking, balancing potential growth with a degree of safety.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 13.72%, with a maximum drawdown of -34.72%. These figures indicate a robust performance, particularly in light of the balanced risk profile. The performance is especially noteworthy considering the days contributing to 90% of returns were relatively few, highlighting the impact of significant market movements on overall gains. This historical performance, while impressive, should be approached with the understanding that past results do not guarantee future returns.

Projection Info

Monte Carlo simulations, utilizing historical data to forecast future outcomes, suggest a wide range of potential portfolio values. With a 50th percentile projection at 342.3% growth, the outlook appears positive. However, the broad spread between the 5th and 67th percentiles (47.7% to 502.5%) underscores the inherent uncertainty in market movements. Investors should consider these projections as one of many tools, recognizing the limitations of relying solely on past data to predict future performance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely allocated to stocks (99%), with a minimal cash holding (1%). This high equity exposure is consistent with the portfolio's balanced risk classification but leans towards a more aggressive growth strategy. The lack of alternative asset classes, such as bonds or real estate (beyond REITs within the equity allocation), limits opportunities for risk mitigation through diversification across different asset class behaviors in various market conditions.

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 skewed towards technology (29%), followed by financial services (16%) and consumer cyclicals (10%). This concentration in tech and growth-oriented sectors can drive high returns but also exposes the portfolio to increased volatility, particularly in market downturns or during shifts in economic cycles. Diversifying more evenly across sectors could reduce volatility without significantly compromising growth potential.

Regions Info

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

Geographically, the portfolio is predominantly invested in North America (81%), with limited exposure to developed Europe (8%) and emerging Asia (3%). This concentration in the US market, while historically strong, may overlook potential growth opportunities in emerging markets and developed international markets. Expanding geographic diversification could enhance returns and reduce the impact of regional economic downturns.

Market capitalization Info

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

The market capitalization breakdown shows a preference for larger companies (Mega 42%, Big 31%) over medium, small, and micro-cap stocks. This bias towards larger firms may contribute to stability and lower volatility but could also limit growth potential compared to more nimble, smaller companies. Increasing exposure to smaller caps could offer higher growth prospects, albeit with increased risk.

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.

Considering the Efficient Frontier, the portfolio's current allocation between US and international stocks appears well-considered but may not be fully optimized for the best possible risk-return ratio. Adjusting the allocation to include a broader range of asset classes and reducing the heavy emphasis on the US market could potentially move the portfolio closer to the Efficient Frontier, achieving a better balance between risk and return.

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%

Dividend yields from the Vanguard Total Stock Market Index Fund ETF Shares and Vanguard Total International Stock Index Fund ETF Shares contribute to the portfolio's total yield of 1.50%. This yield, while modest, offers a source of income and potential for reinvestment, enhancing compounding growth. Given the portfolio's growth orientation, the current dividend yield is appropriate, balancing income generation with capital appreciation potential.

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 a Total Expense Ratio (TER) of just 0.03%. Low costs are crucial for long-term investment success, as they directly enhance net returns. The Vanguard funds selected are known for their efficiency and low cost, aligning well with best practices in portfolio management.

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