A balanced portfolio with strong U.S. focus and solid historical performance

Report created on Mar 6, 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 primarily consists of two ETFs: the Vanguard S&P 500 ETF at 65% and the Vanguard Total International Stock Index Fund ETF at 35%. This composition suggests a strong focus on U.S. equities while maintaining a significant international exposure. Such a structure provides a good balance between domestic and global markets, aligning with a balanced investment profile. While this setup offers broad diversification, it may benefit from additional asset classes to enhance risk-adjusted returns. Consider introducing bonds or alternative investments to further diversify and potentially stabilize returns during market volatility.

Growth Info

Historically, this portfolio has delivered a CAGR of 11.35%, indicating robust growth over time. The max drawdown of -33.83% reflects the potential downside risk during market downturns. Compared to benchmarks, this performance is impressive, demonstrating the portfolio's ability to capture returns while managing risk. However, it's important to remember that past performance does not guarantee future results. To maintain strong returns, consider periodic rebalancing to ensure the portfolio remains aligned with your investment goals and risk tolerance.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest potential end portfolio values ranging from 20.6% to 399.1%. With 974 out of 1,000 simulations showing positive returns, the outlook appears favorable. However, these projections are not predictions and should be interpreted with caution. They provide a range of possibilities rather than certainties. To enhance future outcomes, regularly review and adjust your portfolio based on changes in market conditions and personal circumstances.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks at 99%, with a minimal 1% cash allocation. This concentration in equities offers growth potential but also increases exposure to market volatility. Compared to typical balanced portfolios, which often include bonds or other fixed-income assets, this composition may lack stability during downturns. Consider diversifying into other asset classes, such as bonds or real assets, to mitigate risk and provide more consistent returns over time.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is led by technology at 27%, followed by financial services at 16%. This concentration in tech suggests a tilt towards growth, which can lead to higher volatility, especially during interest rate changes. The presence of 11 sectors indicates broad diversification, aligning well with benchmark norms. To manage sector-specific risks, ensure that no single sector dominates the portfolio. Regularly review sector performance and adjust allocations to maintain a balanced approach.

Regions Info

  • North America
    68%
  • Europe Developed
    13%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio leans heavily towards North America at 68%, with the rest spread across Europe, Asia, and other regions. This tilt towards the U.S. aligns with the S&P 500's composition but may limit exposure to growth opportunities in emerging markets. While this allocation provides stability, consider increasing international exposure to enhance diversification. This can reduce reliance on the U.S. market and potentially capture growth in other regions.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    2%

The portfolio's market capitalization is dominated by mega-cap stocks at 46%, followed by big caps at 33%. This focus on larger companies offers stability and lower volatility compared to smaller caps. However, it may limit growth potential, as smaller companies often provide higher returns. To balance risk and reward, consider diversifying into mid and small-cap stocks. This can increase growth potential while maintaining an overall balanced risk profile.

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, which aims to achieve the best possible risk-return ratio with the current assets. This optimization focuses on reallocating existing holdings to enhance performance without introducing new assets. While the current allocation is balanced, exploring different weightings could improve efficiency. Regularly review the portfolio's position on the Efficient Frontier to ensure it remains aligned with your risk tolerance and investment objectives.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.86%

The total dividend yield of 1.86% reflects a modest income stream, with the international ETF contributing a higher yield of 3.10% compared to the S&P 500's 1.20%. Dividends can provide a steady income, especially valuable during periods of market volatility. For investors seeking income, consider increasing exposure to dividend-focused funds or stocks. However, balance this with growth objectives to ensure the portfolio continues to meet long-term goals.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is an impressively low 0.05%, which supports better long-term performance by minimizing costs. This aligns well with best practices for cost-efficient investing. Low costs enhance net returns, making this portfolio cost-effective. While the current TER is excellent, regularly review and compare with other low-cost options to ensure continued cost efficiency. This helps maximize returns over time without compromising on quality.

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