Balanced and highly diversified portfolio with a strong focus on global equities and tax efficiency

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor seeking balanced growth with moderate to high risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining significant exposure to global equities, making it ideal for individuals looking to build wealth over time. The investor likely values diversification and tax efficiency but is willing to accept some volatility for the potential of higher returns. This approach is well-suited for someone comfortable with market fluctuations and looking for a mix of income and capital appreciation.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    60.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    25.00%
  • BRANDES INTERNATIONAL SMALL CAP EQUITY FUND CLASS I
    BISMX - US1052627379
    5.00%
  • VANGUARD NEW YORK LONG-TERM TAX-EXEMPT FUND ADMIRAL SHARES
    VNYUX - US92204H3012
    5.00%
  • Vanguard Growth Index Fund ETF Shares
    VUG - US9229087369
    5.00%

This portfolio showcases a strategic balance between domestic and international equities, complemented by a minor allocation towards fixed income and small-cap equity. The heavy weighting towards ETFs, especially the Vanguard Total Stock Market Index Fund and the Vanguard Total International Stock Index Fund, underscores a preference for broad market exposure. The inclusion of a specific tax-exempt fund and a growth index fund indicates a nuanced approach to tax efficiency and growth potential. This composition aligns well with a balanced risk profile, aimed at capturing global equity returns while mitigating risk through diversification.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 12.92% and a maximum drawdown of -33.46%, the portfolio demonstrates robust growth with significant volatility. The days contributing most to returns highlight the portfolio's sensitivity to market highs and lows. Comparing these figures to benchmarks would suggest that the portfolio is positioned for aggressive growth, albeit with a balanced risk approach. The performance is indicative of a well-structured portfolio that has navigated market fluctuations effectively, leveraging global equity movements for substantial gains.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes for this portfolio. With a median projected increase of 320.1% and 994 out of 1,000 simulations showing positive returns, the forward outlook appears promising. However, it's crucial to remember that these projections are hypothetical and subject to the limitations of past data. They offer a glimpse into potential growth but should be interpreted with caution, as future market conditions can deviate significantly from historical trends.

Asset classes Info

  • Stocks
    94%
  • Bonds
    5%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's asset allocation, with 94% in stocks and 5% in bonds, underscores a growth-oriented strategy with a moderate cushion against market volatility. The minimal cash holding enhances market exposure but reduces liquidity slightly. This allocation is suitable for a balanced investor seeking growth while maintaining a buffer against downturns. Compared to typical balanced portfolios, this one leans more towards equities, reflecting a higher risk tolerance and a long-term investment horizon.

Sectors Info

  • Technology
    26%
  • Financials
    15%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%
  • Consumer Discretionary
    0%

Sector allocation is concentrated in technology, financial services, and industrials, making up over half of the portfolio. This concentration in high-growth and cyclical sectors suggests an optimistic outlook on economic growth and technological innovation. However, it also introduces sector-specific risks, such as volatility in tech stocks or regulatory changes affecting financial services. Diversifying more evenly across sectors could mitigate these risks while still allowing for substantial growth opportunities.

Regions Info

  • North America
    68%
  • Europe Developed
    12%
  • Unknown
    5%
  • Japan
    4%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Latin America
    1%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Europe Emerging
    0%

Geographic allocation emphasizes North American equities, with significant exposure to developed European markets and a modest presence in emerging markets. This distribution supports a balanced risk profile by combining the stability of developed markets with the growth potential of emerging economies. However, the underrepresentation of emerging markets might limit exposure to high-growth regions. Increasing this allocation could enhance diversification and growth prospects, particularly in Asia and Latin America.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    28%
  • Mid-cap
    18%
  • Small-cap
    7%
  • Micro-cap
    2%

The market capitalization breakdown, with a focus on mega and big cap stocks, indicates a preference for established, large companies known for their stability and potential for steady growth. While this provides a foundation of reliability, the relatively smaller allocation to small and micro-cap stocks might limit opportunities for outsized gains. Balancing this with a slightly higher investment in smaller companies could introduce more growth potential and diversification benefits.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard Growth Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard Total Stock Market Index Fund and the Vanguard Growth Index Fund suggests overlapping exposures, potentially diminishing the benefits of diversification. This redundancy may not significantly impact risk but could limit the portfolio's ability to capitalize on different market movements. Reevaluating these positions to reduce overlap could enhance the portfolio's diversification and overall performance.

Dividends Info

  • BRANDES INTERNATIONAL SMALL CAP EQUITY FUND CLASS I 1.20%
  • VANGUARD NEW YORK LONG-TERM TAX-EXEMPT FUND ADMIRAL SHARES 2.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Growth Index Fund ETF Shares 0.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.54%

The dividend yield across the portfolio averages at 1.54%, contributing to total returns in addition to price appreciation. The varied yields, from the lower end in growth-oriented assets to higher yields in international and tax-exempt funds, reflect a balanced approach to income and growth. For investors prioritizing income, there may be room to optimize for higher dividend yields without compromising growth potential significantly.

Ongoing product costs Info

  • BRANDES INTERNATIONAL SMALL CAP EQUITY FUND CLASS I 1.11%
  • VANGUARD NEW YORK LONG-TERM TAX-EXEMPT FUND ADMIRAL SHARES 0.09%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Growth Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) of 0.09% is impressively low, maximizing net returns for the investor. This efficiency is crucial for long-term growth, as even small differences in costs can compound significantly over time. The careful selection of low-cost funds, particularly from Vanguard, demonstrates a strategic approach to minimizing fees, which is commendable and should be maintained.

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.

Optimizing the portfolio along the Efficient Frontier could further enhance the risk-return profile. Currently, the high correlation between certain assets suggests room for improvement in diversification. By adjusting allocations to reduce overlap and potentially incorporating assets with lower correlations, the portfolio could achieve a more efficient balance of risk and return. This process, while based on current holdings, should consider the investor's risk tolerance and long-term goals.

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