A balanced portfolio with strong dividend focus and moderate international exposure

Report created on Apr 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 is comprised of three ETFs: Schwab U.S. Dividend Equity ETF (50%), Invesco NASDAQ 100 ETF (30%), and Vanguard Total International Stock Index Fund ETF (20%). This structure shows a significant emphasis on U.S. equities, particularly those providing dividends, with a moderate allocation to international stocks. Compared to typical balanced portfolios, this one leans towards equity, with minimal cash holdings. This composition aligns with a balanced risk profile, offering potential for growth while maintaining income through dividends. Consider if the current allocation aligns with your investment goals or if further diversification, perhaps into bonds, might enhance stability.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 9.56%. It has experienced a maximum drawdown of -23.14%, reflecting the potential volatility of equity-heavy portfolios. Despite this, the portfolio has demonstrated resilience, recovering quickly from downturns. Compared to benchmarks, this performance is commendable, especially given the dividend focus. It’s crucial to remember that past performance doesn’t guarantee future results. Regularly reviewing performance against objectives can ensure the portfolio remains aligned with your financial goals.

Projection Info

The portfolio's forward projection, based on Monte Carlo simulations, indicates a median growth of 178.6% over the investment horizon. Monte Carlo simulations use historical data to project potential outcomes, providing a range of possible future performances. While the median projection is promising, with 940 out of 1,000 simulations showing positive returns, it's important to consider the 5th percentile outcome of -2.8% as a reminder of potential risks. Use these projections as a guide, not a certainty, and plan for various scenarios.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in equities (99%), with a negligible cash position. This allocation suggests a strong growth orientation, benefiting from equity market upswings but also exposed to its downturns. Compared to typical balanced benchmarks, this allocation is more aggressive, lacking fixed-income assets which usually provide stability. Consider if this equity dominance aligns with your risk tolerance and financial objectives. Introducing bonds or other asset classes could enhance diversification and reduce volatility.

Sectors Info

  • Technology
    23%
  • Financials
    13%
  • Health Care
    13%
  • Consumer Discretionary
    11%
  • Consumer Staples
    11%
  • Industrials
    10%
  • Telecommunications
    8%
  • Energy
    7%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

The sector allocation shows a strong concentration in technology (23%), followed by financial services and healthcare (each 13%). This mirrors common benchmarks, reflecting a balanced sector approach. However, the tech-heavy aspect may introduce volatility, especially during economic shifts affecting tech valuations. The presence of consumer cyclicals and defensives provides some balance. Regularly reviewing sector trends and considering rebalancing can help maintain a diversified approach and capitalize on emerging opportunities.

Regions Info

  • North America
    80%
  • Europe Developed
    9%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

With 80% exposure to North America, the portfolio is heavily U.S.-centric, offering limited international diversification. While this aligns with the client region, it may overlook growth opportunities in emerging markets. The modest allocation to Europe, Asia, and other regions provides some geographic diversification but is below typical global benchmarks. Consider increasing exposure to international markets to potentially reduce regional risk and capture global growth, especially in emerging economies.

Market capitalization Info

  • Large-cap
    50%
  • Mega-cap
    25%
  • Mid-cap
    20%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is skewed towards large-cap stocks, with big and mega caps making up 75%. This suggests a focus on established companies, which can offer stability and reliable returns. However, the minimal exposure to small and micro caps (4%) may limit growth potential and diversification. Compared to benchmarks, this allocation is conservative. Consider whether increasing small-cap exposure could enhance growth prospects, acknowledging the higher risk associated with smaller 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.

The portfolio is positioned near the Efficient Frontier, indicating a strong risk-return balance. The Efficient Frontier represents the best possible risk-return trade-off, meaning this portfolio is well-optimized based on its current assets. While this suggests effective allocation, periodic reviews can ensure it remains optimal as market conditions change. Consider if any adjustments could further enhance this balance, keeping in mind your risk tolerance and investment goals.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Schwab U.S. Dividend Equity ETF 4.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.50%
  • Weighted yield (per year) 3.01%

The portfolio’s dividend yield stands at 3.01%, driven by the Schwab U.S. Dividend Equity ETF’s 4.20% yield. This focus on dividends provides a steady income stream, appealing to investors seeking regular cash flow. Compared to growth-focused portfolios, this yield is attractive, offering income even during market downturns. Ensure this dividend focus aligns with your financial needs and consider if reinvesting dividends could enhance long-term growth.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, which is impressively low. This cost efficiency supports better long-term performance, as lower fees mean more returns stay invested. Compared to average ETF costs, this TER is quite competitive, enhancing the portfolio’s attractiveness. Regularly reviewing and managing costs can ensure they remain low, maximizing returns. Consider if any cost-saving opportunities exist, though current costs are already optimized.

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