A growth oriented balanced portfolio leaning heavily on North American large cap equities
Report created on Aug 16, 2024Risk profile
4/7
Diversification profile
3/5
Positions
-
XE iShares Core Equity Portfolio
XEQT - CA46436D1087 51.00% -
VF Vanguard S&P 500 Index ETF
VFV - CA92205Y1051 38.00% -
RY Royal Bank of Canada
RY - CA7800871021 11.00%
The structure is very focused: roughly half in a broad core equity ETF, a big chunk in an S&P 500 ETF, and a smaller single-stock position in a major bank. Compared to a typical balanced benchmark that mixes stocks and bonds, this is more equity-heavy and lighter on stabilizing assets. That matters because equities drive long‑term growth but also most of the volatility. Keeping a risk score of 4 out of 7 with this setup is reasonable, but not conservative. If a smoother ride is desired, gradually adding a dedicated stabilizer sleeve—like more defensive or income‑oriented holdings—could bring the mix closer to classic balanced profiles without disrupting the current structure too much.
Growth
Using a simple example, if someone invested $10,000 when this track record began, a 16.01% CAGR (Compound Annual Growth Rate, basically “average yearly speed”) would have grown it very strongly versus a more typical balanced benchmark, which often sits in the mid‑single to low‑double digits. The max drawdown of about ‑29% shows that during bad markets, the portfolio can fall almost a third from a peak, which is in line with an equity‑heavy mix. This result is impressive and suggests solid alignment with growth goals, but it’s crucial to remember that past performance is not a guarantee and similar returns might not repeat.
Projection
The Monte Carlo analysis, which runs 1,000 “what if” market paths using historical patterns and randomness, shows a very wide range of outcomes. In plain terms, a 5th percentile outcome of about 198% suggests more than a doubling in tougher scenarios, while the median around 778% and higher percentiles show substantial upside potential. An average simulated annual return above 18% is strong, but this is still just a statistical model built on past behavior. Market regimes can change, so these numbers are better viewed as a rough map than a promise. Treat them as scenario planning: exciting upside, but still room for disappointments.
Asset classes
- US Equity 59%
- Stocks 14%
- Stocks 11%
The portfolio is overwhelmingly in equities, with US equity at 59%, other global equity at 14%, plus 11% in a single Canadian bank stock, and effectively no bonds or alternatives. This equity tilt is what drives the high historic and simulated returns but also explains the sizeable drawdown. Traditional balanced benchmarks usually include a meaningful slice of bonds or other lower‑volatility assets to cushion equity swings. As it stands, this allocation is more growth‑oriented than the “balanced” label suggests. If capital preservation during downturns is important, increasing exposure to lower‑risk asset classes over time could make the experience smoother without abandoning long‑term growth.
Sectors
- Financials 27%
- Technology 25%
- Industrials 9%
- Consumer Discretionary 8%
- Telecommunications 7%
- Health Care 7%
- Energy 4%
- Consumer Staples 4%
- Basic Materials 4%
- Utilities 2%
- Real Estate 2%
Sector exposure is broadly diversified and actually quite healthy: financials at 27%, technology at 25%, then a good spread across industrials, consumer areas, communication services, healthcare, and smaller slices of energy, materials, utilities, and real estate. This composition lines up reasonably well with common broad‑market benchmarks, which is a positive sign for diversification. The tilt toward financials and tech means results may be more sensitive to interest rates, credit conditions, and innovation cycles. During rate‑hike periods, financials and tech can both be jumpier. Periodically checking that no single economic theme dominates the portfolio helps keep risk in line with a balanced profile.
Regions
- North America 85%
- Europe Developed 8%
- Japan 3%
- Asia Developed 1%
- Asia Emerging 1%
- Australasia 1%
Geographically, the portfolio is heavily skewed toward North America at 85%, with modest allocations to developed Europe, Japan, and small exposures to other developed and emerging regions. This is common for investors in Canada or the US and has worked well during long stretches where North American markets outperformed. However, it also creates a home‑region and US tilt, which may be less ideal if leadership rotates to other areas in the future. This allocation is still “moderately diversified” globally, but there is room to broaden it. Gradually lifting exposure to non‑North‑American markets can help reduce reliance on one economic region over decades.
Market capitalization
- Mega-cap 50%
- Large-cap 29%
- Mid-cap 16%
- Small-cap 3%
- Micro-cap 1%
By market capitalization, the portfolio leans strongly into mega and large companies: about 79% in mega and big caps, with only a small slice in mid, small, and micro caps. Large caps are generally more stable, better researched, and less likely to blow up, which supports the balanced risk profile. However, smaller companies often drive part of the long‑term return premium, albeit with bumpier rides. Relative to many global equity benchmarks, this is a touch more tilted to the biggest names, but still within a normal range. Anyone wanting a bit more growth potential could consider a small increase in mid/small‑cap exposure while staying diversified.
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.
On a risk‑return spectrum, this mix looks like it sits above a classic balanced portfolio in both expected return and volatility, and likely plots reasonably close to an Efficient Frontier for the given building blocks. The Efficient Frontier is just a curve showing the best possible trade‑offs between risk and return using only the current ingredients by changing their weights. “Efficient” doesn’t always mean best for every goal—it just means a strong risk‑return ratio. Small tweaks, like slightly adjusting the split between the two ETFs or trimming single‑stock risk, could nudge the portfolio closer to that curve without altering its overall character.
Dividends
- Royal Bank of Canada 2.00%
- Vanguard S&P 500 Index ETF 0.50%
- iShares Core Equity Portfolio 0.90%
- Weighted yield (per year) 0.87%
The overall dividend yield of about 0.87% is relatively modest, especially given the presence of a major dividend‑paying bank. This is very much a total‑return, growth‑leaning setup rather than an income portfolio. Dividends can help smooth returns and provide cash flow without selling units, which some investors value, but they often come with more exposure to mature or defensive companies. Here, the yield from the bank position supports a bit of income while the ETFs emphasize broad market growth. If future goals include funding regular withdrawals, gradually boosting the income component could help, while still keeping a core growth engine in place.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey