Balanced and globally diversified portfolio with a strong emphasis on technology and financial sectors

Report created on May 28, 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 is singularly invested in the Vanguard Total World Stock Index Fund ETF Shares, offering a comprehensive exposure to global equity markets. The allocation is 100% within this ETF, reflecting a strategy focused on broad diversification across both geography and sectors. Such a composition aligns with a balanced risk profile, aiming to mitigate volatility through global exposure. The simplicity of this one-fund approach can be both a strength and a limitation, depending on the investor's goals and risk tolerance.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 10.49%, with a notable maximum drawdown of -34.22%. These figures suggest a resilient performance through various market conditions, highlighting the fund's ability to recover from downturns. The days contributing to 90% of the returns indicate significant gains can be concentrated in relatively short periods, underscoring the importance of staying invested over the long term to capture these spikes.

Projection Info

Monte Carlo simulations, utilizing historical data to forecast potential future outcomes, suggest a wide range of performance possibilities for this portfolio. With 963 out of 1,000 simulations yielding positive returns, the median projection points to a 262% increase. Such projections, while informative, must be approached with caution as they rely on past trends which may not predict future movements accurately.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is nearly entirely in stocks (99%), with a minimal cash position (1%). This heavy equity weighting is typical for growth-oriented investors but carries higher volatility. The absence of other asset classes like bonds or real estate investment trusts (REITs) means the portfolio may lack certain diversification benefits that can reduce risk and smooth out returns over time.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is led by technology (23%) and financial services (18%), followed by industrials and consumer cyclicals. This sector composition suggests a tilt towards industries with higher growth potential but also increased sensitivity to economic cycles. While the technology sector can offer significant returns, it may also experience higher volatility, especially in response to market shifts or regulatory changes.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (65%), with meaningful exposures to developed Europe and emerging Asian markets. This distribution provides a good balance between stable, developed markets and the higher growth potential of emerging economies. However, the relatively lower exposure to emerging markets might limit growth prospects compared to a more globally balanced approach.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio favors larger companies, with 43% in mega-cap and 31% in large-cap stocks. This bias towards bigger, more established companies generally means less volatility and steady growth. However, the lower allocation to small and micro-cap stocks may result in missed opportunities for higher growth, albeit with increased risk.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.80%

With a dividend yield of 1.80%, the portfolio provides a modest income stream in addition to potential capital appreciation. This yield is reflective of the fund's global equity focus, balancing between high-growth sectors that typically pay lower dividends and more mature industries with higher dividend payouts.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

The Total Expense Ratio (TER) of 0.07% is impressively low, maximizing the potential for net returns over the long term. Keeping costs minimal is crucial in investment management, as even small differences in fees can significantly impact total returns over decades.

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