A balanced portfolio emphasizing broad diversification with moderate risk and low costs

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor seeking balanced growth with moderate risk tolerance and a long-term horizon. It emphasizes broad diversification across sectors and geographies, making it ideal for individuals looking to build wealth steadily over time. The focus on low costs and competitive dividend yields further supports long-term growth and income objectives. This strategy is well-suited for investors who prioritize a mix of stability and growth, while maintaining exposure to both domestic and international markets.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    50.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    30.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares
    VWO - US9220428588
    10.00%
  • Vanguard High Dividend Yield Index Fund ETF Shares
    VYM - US9219464065
    10.00%

This portfolio consists of four ETFs, with a significant 50% allocation to the Vanguard Total Stock Market Index Fund ETF. The remaining 50% is divided among international stocks, emerging markets, and high dividend yield ETFs. This composition reflects a broad diversification strategy, aligning closely with a balanced risk profile. Compared to common benchmarks, the portfolio leans towards domestic equities, which may limit exposure to global market opportunities. Consider periodically reviewing the allocation to ensure it aligns with changing market conditions and personal investment goals.

Growth Info

Historically, this portfolio has delivered a strong CAGR of 10.44%, indicating robust growth over time. However, it also experienced a maximum drawdown of -34.29%, highlighting potential volatility during market downturns. Compared to benchmarks, this performance suggests a competitive return profile, albeit with notable risk exposure. Understanding past performance helps set realistic expectations, but remember that historical data doesn't guarantee future results. Regularly reviewing performance relative to benchmarks can help identify areas for improvement or adjustment.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a 9.73% annualized return. With 951 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for future growth. However, projections suggest a wide range of potential outcomes, emphasizing the uncertainty inherent in forecasting. This simulation helps visualize potential risks and returns, but it's crucial to remember that past data can't predict future results. Regularly revisiting these projections can help ensure the portfolio remains aligned with your risk tolerance and investment goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

This portfolio is heavily weighted towards stocks, with 99% allocation, and a minimal 1% in cash. Such a concentration in equities indicates a focus on growth, but it may expose the portfolio to higher volatility. Compared to benchmarks, this allocation is typical for a growth-oriented strategy but may lack the stability that bonds or other asset classes could provide. Consider whether this equity concentration aligns with your risk tolerance and investment horizon. Diversifying into other asset classes could potentially reduce volatility and enhance long-term stability.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    3%

The sector allocation is diverse, with a notable 23% in technology, followed by financial services and consumer cyclicals. This tech-heavy focus may lead to higher volatility, especially during interest rate hikes or tech sector downturns. Compared to benchmarks, this allocation is well-balanced, covering various sectors to mitigate sector-specific risks. Regularly reviewing sector exposure can help maintain a balanced approach and adapt to changing economic conditions. Consider whether the current sector weights align with your market outlook and risk preferences.

Regions Info

  • North America
    62%
  • Europe Developed
    12%
  • Asia Emerging
    11%
  • Asia Developed
    5%
  • Japan
    5%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly exposed to North America at 62%, with limited exposure to emerging markets and other regions. This bias towards the U.S. may benefit from domestic market strength but could miss opportunities in faster-growing regions. Compared to benchmarks, this allocation is typical for U.S.-focused portfolios but may lack global diversification. Consider whether increasing exposure to international markets could enhance diversification and reduce reliance on U.S. market performance. Regularly reviewing geographic allocation can help align with global economic trends.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    33%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio is diversified across market capitalizations, with a significant 40% in mega-cap stocks and 33% in large-cap stocks. This distribution suggests a focus on stability and established companies, which can reduce volatility compared to smaller-cap stocks. Compared to benchmarks, this allocation aligns well with a balanced risk profile, offering a mix of growth potential and stability. Consider whether this market cap allocation aligns with your investment goals and risk tolerance. Periodic reviews can help ensure the portfolio remains well-balanced as market conditions evolve.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 2.14%

With a total dividend yield of 2.14%, this portfolio provides a modest income stream, primarily from the high dividend yield ETF. Dividends can offer stability and income, especially during market volatility. Compared to benchmarks, this yield is competitive for a growth-focused portfolio, balancing income and capital appreciation. Consider whether the current dividend yield aligns with your income needs and investment goals. Regularly reviewing dividend contributions can help ensure the portfolio remains aligned with your financial objectives and risk tolerance.

Ongoing product costs Info

  • 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 0.08%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.05%

The total expense ratio (TER) of 0.05% is impressively low, supporting better long-term performance by minimizing costs. Compared to industry averages, this cost structure is highly efficient, enhancing overall returns. Keeping expenses low is crucial for maximizing net returns over time, as high fees can erode gains. Regularly monitoring and managing costs can help maintain this advantage. Consider whether any changes to the portfolio could impact costs and ensure that the expense ratio remains competitive and aligned with your investment strategy.

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.

The portfolio can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on current assets. This optimization focuses on reallocating existing assets to achieve a more efficient portfolio without adding new investments. Achieving efficiency means maximizing returns for a given level of risk or minimizing risk for a given level of return. Consider periodically reviewing the portfolio's position on the Efficient Frontier to ensure it remains optimized for your risk tolerance and investment goals.

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