Conservative portfolio with balanced asset classes and moderate geographic diversification

Report created on Mar 12, 2025

Risk profile Info

2/7
Conservative
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Diversification profile Info

3/5
Moderately Diversified
← Less diversification More diversification →

Positions

The portfolio is heavily weighted towards cash-equivalent funds, with 35% in the Schwab Value Advantage Money Fund, providing stability. The remaining assets are diversified across stocks, bonds, and real estate. Compared to a typical conservative benchmark, this portfolio has a slightly higher allocation to equities and alternative assets like gold. This composition offers a balance between safety and growth. To improve alignment with conservative benchmarks, consider increasing bond exposure for more stability, especially during market downturns.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 6.53%, which is respectable for a conservative profile. The maximum drawdown of -14.19% indicates moderate risk exposure. Compared to benchmarks, this performance is solid, reflecting the portfolio's ability to withstand volatility. However, the reliance on a few days for most returns suggests potential volatility. To enhance stability, consider diversifying further within asset classes to smooth out returns over time.

Projection Info

Using Monte Carlo simulations, which run numerous scenarios based on historical data, the portfolio's future performance shows a wide range of outcomes. The median projection suggests a potential growth of 175.7%, while 5% of scenarios predict a loss of 39.8%. It's important to note that these simulations are based on past data, which doesn't guarantee future results. To increase the likelihood of achieving favorable outcomes, regularly review and adjust the asset allocation to align with evolving market conditions.

Asset classes Info

  • Stocks
    33%
  • Other
    15%
  • Bonds
    15%
  • Real Estate
    2%

The portfolio's allocation across asset classes includes 33% in stocks, 15% in bonds, and 15% in alternative assets like gold. This mix provides diversification, which helps manage risk. Compared to a typical conservative benchmark, there's a higher allocation to stocks and alternatives. To better align with conservative strategies, consider increasing bond exposure for added stability. This adjustment could help cushion against market fluctuations while maintaining growth potential.

Sectors Info

  • Real Estate
    11%
  • Financials
    5%
  • Technology
    4%
  • Industrials
    3%
  • Consumer Discretionary
    3%
  • Health Care
    2%
  • Consumer Staples
    2%
  • Telecommunications
    2%
  • Energy
    1%
  • Basic Materials
    1%
  • Utilities
    1%

Sector allocation is diverse, with real estate at 11% and financial services at 5%. This composition aligns closely with common benchmarks, indicating a balanced approach. However, the portfolio's technology sector exposure is relatively low at 4%, which might limit growth opportunities. To enhance diversification and potential returns, consider increasing exposure to sectors with strong growth prospects. This adjustment could provide a better balance between stability and growth.

Regions Info

  • North America
    19%
  • Europe Developed
    5%
  • Asia Emerging
    4%
  • Japan
    2%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%

The portfolio's geographic exposure is primarily in North America at 19%, with modest allocations to Europe and Asia. This distribution provides some international diversification, but it's lower than global benchmarks. To enhance geographic diversification, consider increasing exposure to emerging markets, which can offer growth potential and reduce reliance on a single region. This adjustment could improve the portfolio's resilience to regional economic shifts and enhance overall stability.

Market capitalization Info

  • No data
    15%
  • Large-cap
    13%
  • Mega-cap
    9%
  • Mid-cap
    7%
  • Small-cap
    3%
  • Micro-cap
    2%

The portfolio's market capitalization is skewed towards larger companies, with 13% in big and 9% in mega caps. This focus provides stability but may limit growth potential. Small and micro caps represent only 5%, offering limited exposure to high-growth opportunities. To enhance diversification and growth potential, consider increasing exposure to smaller companies. This adjustment could improve the balance between stability and growth, aligning with a conservative yet opportunistic strategy.

Redundant positions Info

  • SPDR® Portfolio S&P 600 Small Cap ETF
    Avantis® U.S. Small Cap Value ETF
    High correlation
  • Vanguard Total International Stock Index Fund ETF Shares
    SPDR S&P World ex US
    High correlation
  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

Several assets in the portfolio are highly correlated, such as the SPDR® Portfolio S&P 600 Small Cap ETF and Avantis® U.S. Small Cap Value ETF. High correlation means these assets tend to move together, potentially limiting diversification benefits. To improve risk management, consider reducing exposure to overlapping assets and adding uncorrelated ones. This adjustment could enhance the portfolio's resilience to market downturns and improve risk-adjusted returns.

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 could be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on current assets. This process involves adjusting allocations to achieve the most efficient balance. However, it's important to note that efficiency doesn't guarantee diversification or other goals. To enhance optimization, consider reallocating assets to align better with the Efficient Frontier, focusing on reducing risk while maintaining return potential. This approach can improve overall portfolio performance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Camden Property Trust 3.40%
  • CubeSmart 4.90%
  • Essex Property Trust Inc 3.30%
  • Extra Space Storage Inc 4.30%
  • Mid-America Apartment Communities Inc 3.60%
  • Public Storage 3.90%
  • Schwab U.S. TIPS ETF 2.90%
  • The Charles Schwab Family of Funds - Schwab Value Advantage Money Fund 4.90%
  • SPDR S&P World ex US 1.70%
  • SPDR® Portfolio S&P 600 Small Cap ETF 2.00%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares 5.10%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Value Index Fund ETF Shares 2.30%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.10%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 3.13%

The portfolio's dividend yield is 3.13%, providing a steady income stream, which is valuable for conservative investors. High-yielding assets like the Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares contribute significantly. Dividends offer a buffer during market volatility and can be reinvested for growth. To maximize income potential, consider focusing on high-quality, dividend-paying stocks and funds. This approach can enhance income stability while maintaining growth opportunities.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iShares Gold Trust 0.25%
  • Schwab U.S. TIPS ETF 0.03%
  • SPDR S&P World ex US 0.03%
  • SPDR® Portfolio S&P 600 Small Cap ETF 0.03%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Global ex-U.S. Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Value Index Fund ETF Shares 0.04%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is 0.07%, which is impressively low and supports better long-term performance. Low costs mean more of your returns stay in your pocket, enhancing compounding over time. Compared to industry averages, these costs are competitive, indicating efficient management. To maintain this advantage, regularly review fund fees and consider cost-effective alternatives if necessary. Keeping costs low is crucial for optimizing net returns and achieving financial goals.

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