A balanced portfolio with a strong focus on U.S. equities and tech sector exposure

Report created on Apr 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of three ETFs, with a significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares at 50%. This ETF provides broad exposure to the entire U.S. stock market. The Vanguard Total International Stock Index Fund ETF Shares, at 30%, diversifies the portfolio with international equities. The Invesco NASDAQ 100 ETF, at 20%, adds a tech-heavy component. This composition is well-balanced, aligning with a typical benchmark for a balanced portfolio. However, it leans heavily on U.S. equities, which may limit international diversification.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 10.47%, indicating strong past performance. The max drawdown of -27.90% highlights the potential risks during market downturns. Compared to benchmarks, this performance is commendable, but investors should remember that past performance doesn't guarantee future results. The concentration in U.S. equities and tech may have contributed to these returns, suggesting a need to assess whether this aligns with future expectations.

Projection Info

Monte Carlo simulations, which use historical data to predict future performance, suggest an annualized return of 11.05% with a median outcome of a 255.5% increase. While 949 out of 1,000 simulations showed positive returns, it's crucial to note that simulations are based on past data and assumptions. They provide a range of potential outcomes but are not definitive predictions. Investors should use these projections as one of many tools in decision-making, keeping in mind the inherent uncertainties.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% in equities and a minimal cash position of 1%. This allocation is typical for growth-focused portfolios, offering potential for higher returns but also increased volatility. Compared to benchmarks, this heavy equity allocation may lack the diversification benefits of including bonds or other asset classes. Investors may consider adding other asset classes to reduce risk and improve stability, especially during market downturns.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    9%
  • Consumer Staples
    6%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

With 30% allocated to technology, the portfolio is tech-heavy, which can lead to higher volatility, especially during interest rate hikes or tech sector downturns. The remaining sectors, such as financial services and consumer cyclicals, provide some diversification. Compared to common benchmarks, this sector allocation is more concentrated in tech, which has historically driven growth but also poses risks. Investors should evaluate if this aligns with their risk tolerance and market outlook.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic allocation is predominantly in North America, with 72% exposure, limiting international diversification. While this aligns with many U.S.-focused benchmarks, it may miss opportunities in emerging markets or regions with different growth prospects. The remaining allocation is spread across Europe, Asia, and other regions, providing some global exposure. Investors seeking broader diversification might consider increasing exposure to underrepresented regions to mitigate regional risks.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    31%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization is skewed towards mega-cap stocks, which make up 44% of the allocation. This focus on large companies can provide stability but may limit exposure to the growth potential of smaller firms. Compared to benchmarks, this allocation is typical for a balanced portfolio. However, incorporating more small and mid-cap stocks could enhance diversification and potentially boost returns. Investors should consider their comfort with the associated risks.

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 risk-return profile can potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio based on current assets. This optimization doesn't necessarily mean adding new assets but adjusting the allocation among existing ones for improved efficiency. Investors should regularly assess if their current allocation aligns with their risk tolerance and investment goals, making adjustments as needed to enhance performance.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.50%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.88%

The portfolio's dividend yield is 1.88%, with the highest contribution from the Vanguard Total International Stock Index Fund ETF Shares at 3.30%. Dividends provide a steady income stream, which can be appealing for income-focused investors. However, the focus on growth-oriented sectors like technology may limit overall yield. Investors prioritizing income may consider reallocating to higher-yielding assets, while those focused on growth might find the current yield sufficient.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, which supports better long-term performance by minimizing costs. Low costs are crucial as they directly impact net returns, allowing more of the portfolio's growth to benefit the investor. Compared to similar portfolios, this cost structure is highly competitive. Maintaining low costs should remain a priority, and investors should periodically review expenses to ensure they stay minimal.

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