Balanced and highly diversified portfolio with a strategic focus on global stocks and bonds

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio exhibits a well-thought-out composition, allocating 45% to a broad U.S. stock market ETF, 20% each to international stocks and U.S. intermediate-term treasury bonds, and 15% to emerging markets. Such a structure suggests a balanced approach, aiming to capture growth through equities while mitigating risk with bond investments. The high diversification score reflects a strategic spread across various asset classes and geographies, aligning with best practices for risk management and potential return enhancement.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.19%, with a maximum drawdown of -27.90%. These figures highlight the portfolio's ability to generate strong returns over time, despite experiencing significant short-term losses. The days contributing most to returns emphasize the impact of market volatility and the importance of staying invested during downturns to capture recovery gains. Comparing these metrics to benchmarks would offer further insights into performance relative to market averages.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes for this portfolio. With the majority of simulations (913 out of 1,000) resulting in positive returns, there's a strong likelihood of favorable outcomes. However, it's crucial to remember that these projections are not guarantees. They serve as a tool for understanding potential risks and rewards, emphasizing the importance of maintaining a diversified and balanced investment approach.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%

The portfolio's asset allocation leans heavily towards stocks (79%), with a significant portion in bonds (20%) and a minimal cash reserve (1%). This allocation supports the pursuit of growth through equities, balanced by the stability of bonds. The presence of both domestic and international equities enhances diversification, potentially reducing volatility and improving returns over the long term. Adjusting the balance between stocks and bonds could further align the portfolio with the investor's risk tolerance and investment horizon.

Sectors Info

  • Technology
    20%
  • Financials
    14%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is broad, with technology (20%) and financial services (14%) leading, followed by consumer cyclicals and industrials. This sector spread is reflective of the global economy's drivers but may expose the portfolio to sector-specific risks, such as regulatory changes in technology or economic cycles affecting financial services. Diversifying across more sectors or adjusting allocations could mitigate these risks while still capturing growth opportunities.

Regions Info

  • North America
    46%
  • Asia Emerging
    12%
  • Europe Developed
    8%
  • Asia Developed
    5%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%

Geographically, the portfolio is well-distributed, with a strong focus on North America (46%) and significant exposures to Asia Emerging (12%) and Europe Developed (8%). This global reach is advantageous for capturing growth in diverse economies but also introduces geopolitical and currency risks. Rebalancing to ensure alignment with global economic shifts could enhance returns while managing exposure to international risks.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    24%
  • Mid-cap
    14%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization exposure is predominantly in mega (34%) and big (24%) cap stocks, which typically offer stability and lower volatility. However, the smaller allocations to medium (14%), small (4%), and micro (1%) caps suggest limited exposure to the higher growth potential of smaller companies. Increasing investments in smaller caps could offer higher growth prospects, albeit with increased risk.

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 suggests it is near the Efficient Frontier, indicating an optimal risk-return balance based on historical data. However, ongoing adjustments may be necessary to maintain this efficiency, especially as market conditions change. Regularly reviewing the allocation and considering rebalancing or diversifying further can help keep the portfolio aligned with the investor's goals and risk tolerance.

Dividends Info

  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.22%

The portfolio's dividend yield stands at 2.22%, contributing to its total return. This yield, derived from both stock and bond investments, offers a steady income stream, which can be particularly valuable in volatile or declining markets. For investors seeking income, focusing on assets with higher dividend yields while considering the impact on growth and risk might be beneficial.

Ongoing product costs Info

  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With a total expense ratio (TER) of 0.04%, the portfolio benefits from low costs, maximizing the potential for net returns. Vanguard's reputation for low-cost funds is well-reflected here, underscoring the importance of cost efficiency in investment strategy. Investors should continue to monitor fees, as even small reductions can lead to significant savings over time.

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