A balanced and moderately diversified portfolio with a strategic focus on dividend growth and momentum

Report created on Aug 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is structured around a core of equity ETFs, emphasizing dividend appreciation, developed market exposure, and S&P 500 momentum, alongside a conservative allocation to U.S. bonds. The equity portion, comprising 80% of the portfolio, is diversified across several key sectors and geographies, with a notable emphasis on financial services and technology. The bond allocation, while smaller, adds a layer of risk mitigation, leveraging both aggregate and TIPS bonds to hedge against market volatility and inflation. This composition suggests a strategic balance between growth potential through equities and stability through bonds, tailored for a balanced risk profile.

Growth Info

The portfolio's historical performance, with a CAGR of 13.24%, indicates robust growth over the evaluated period. The maximum drawdown of -27.69% reflects the inherent risks associated with its equity exposure but remains within acceptable limits for a balanced portfolio. The concentration of returns in a limited number of days highlights the importance of staying invested over the long term to capture significant growth opportunities. This performance, compared against benchmarks, suggests the portfolio's strategy has been effective in navigating market cycles while achieving commendable growth.

Projection Info

Using Monte Carlo simulations, the portfolio's forward projection offers a range of potential outcomes, with the median scenario suggesting a 304.4% increase. This method, which simulates a plethora of possible market conditions based on historical data, underscores the portfolio's capacity for significant growth while also acknowledging the uncertainty inherent in investing. The high number of simulations with positive returns reinforces the portfolio's robustness, though it's crucial to remember that these projections are speculative and not guarantees of future performance.

Asset classes Info

  • Stocks
    79%
  • Bonds
    19%
  • Cash
    2%

The asset class distribution, with a predominant allocation to stocks (79%) and a smaller commitment to bonds (19%), aligns with the portfolio's balanced risk profile. This allocation facilitates a blend of growth through equities and income plus stability through bonds, suitable for investors with a moderate risk tolerance. Comparing this to typical balanced portfolio benchmarks, the slightly higher equity weighting indicates a tilt towards growth, which could enhance returns but also increase volatility.

Sectors Info

  • Financials
    17%
  • Technology
    17%
  • Industrials
    10%
  • Health Care
    8%
  • Consumer Staples
    7%
  • Consumer Discretionary
    7%
  • Telecommunications
    4%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation reveals a well-considered spread across financial services, technology, industrials, healthcare, and consumer sectors, among others. This diversification supports risk management by not overexposing the portfolio to the cyclical nature of any single sector. However, the significant allocations to financial services and technology mirror broader market trends and may reflect areas of both opportunity and heightened volatility. Balancing sector exposure can mitigate sector-specific risks while capitalizing on growth opportunities.

Regions Info

  • North America
    58%
  • Europe Developed
    13%
  • Japan
    5%
  • Asia Developed
    2%
  • Australasia
    2%

Geographically, the portfolio is heavily weighted towards North America (58%), with meaningful exposure to developed European markets and Japan. This distribution suggests a focus on stability and growth potential in established markets, though it may limit exposure to emerging market opportunities. Diversifying geographically can enhance returns and reduce risk by capturing growth in varying economic cycles and mitigating regional downturns.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    29%
  • Mid-cap
    13%
  • Small-cap
    2%

The market capitalization breakdown, favoring mega (35%) and big (29%) cap stocks, indicates a preference for established, large-scale companies likely to offer stability and consistent dividends. While this can be a prudent strategy, especially in volatile markets, incorporating a broader range of market caps could enhance growth potential and diversification, particularly through medium and small-cap exposure.

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's current allocation demonstrates a thoughtful balance between risk and return, potentially sitting near the Efficient Frontier, which represents the most efficient return for a given level of risk. However, continual reassessment of the allocation can ensure that the portfolio remains optimized as market conditions evolve. Adjusting the mix between asset classes, sectors, and geographies based on changing risk tolerances and investment goals can further refine its efficiency.

Dividends Info

  • iShares Core U.S. Aggregate Bond ETF 3.80%
  • Invesco S&P 500® Momentum ETF 0.60%
  • iShares 0-5 Year TIPS Bond ETF 3.00%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.60%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 2.04%

The portfolio's dividend yield, averaging 2.04% across its holdings, contributes to its total return, providing a steady income stream in addition to potential capital appreciation. This yield, combined with the strategic focus on dividend-growing stocks, underscores the portfolio's balanced approach, blending growth potential with income generation. Regularly reviewing dividend performance can ensure that the portfolio continues to meet income objectives while supporting overall growth.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • Invesco S&P 500® Momentum ETF 0.13%
  • iShares 0-5 Year TIPS Bond ETF 0.03%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.07%

With an average total expense ratio (TER) of 0.07%, the portfolio benefits from low costs, enhancing net returns over time. Keeping costs minimal is crucial in maximizing investment efficiency, especially in a balanced portfolio where the objective is to achieve a steady growth rate without excessive risk. This cost-effective structure is commendable and should be maintained to support long-term performance.

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