A balanced portfolio with strong diversification and a moderate risk profile

Report created on Mar 23, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of 30% Vanguard Total Stock Market ETF, 30% Vanguard Total International Stock ETF, and 10% Berkshire Hathaway. It also includes 10% Vanguard Intermediate-Term Treasury ETF, with smaller allocations in Ares Capital and other stocks. This diversified blend of equities and bonds aligns well with a balanced investment strategy. Compared to typical benchmarks, the portfolio has a solid mix of domestic and international equities, complemented by a meaningful bond allocation. To maintain this balance, consider periodically rebalancing to ensure asset classes remain aligned with your risk tolerance and investment goals.

Growth Info

Historically, the portfolio has delivered a compound annual growth rate (CAGR) of 9.99%. This figure suggests robust performance over time, especially when considering the portfolio's maximum drawdown of -33.16%. This drawdown indicates the largest peak-to-trough decline, which is important for understanding potential volatility. When compared to benchmarks, this performance is competitive, suggesting that the portfolio is well-positioned to achieve its growth objectives. To continue this trajectory, regularly review your portfolio's performance against relevant benchmarks and adjust holdings as needed to stay on track.

Projection Info

The Monte Carlo simulation, which uses historical data to estimate future outcomes, projects an annualized return of 11.22% for this portfolio. With 1,000 simulations, 943 resulted in positive returns, providing a high degree of confidence in future performance. However, the 5th percentile shows a potential decline of -11.2%, highlighting the inherent uncertainty in projections. Remember that these simulations are based on past data and cannot guarantee future results. Regularly review and adjust your portfolio to align with changing market conditions and personal financial goals.

Asset classes Info

  • Stocks
    84%
  • Bonds
    15%
  • Cash
    1%

The portfolio's asset allocation consists of 84% stocks, 15% bonds, and 1% cash. This distribution provides a solid foundation for growth, with equities offering higher return potential and bonds providing stability. Compared to benchmarks, the bond allocation may slightly reduce volatility, making it suitable for a balanced risk profile. To maintain diversification and manage risk, consider periodically reviewing your asset allocation and making adjustments to align with your investment objectives and risk tolerance.

Sectors Info

  • Financials
    36%
  • Technology
    13%
  • Industrials
    7%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Telecommunications
    4%
  • Consumer Staples
    4%
  • Basic Materials
    3%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is heavily weighted in financial services at 36%, followed by technology at 13% and industrials at 7%. This sector allocation is relatively balanced, though the concentration in financials could lead to increased volatility if this sector faces downturns. Compared to common benchmarks, the sector distribution is diverse, supporting the portfolio's overall diversification. Consider monitoring sector trends and adjusting allocations to ensure your portfolio remains aligned with economic shifts and your investment strategy.

Regions Info

  • North America
    57%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation shows 57% exposure to North America, with smaller allocations in Europe, Asia, and other regions. This provides a reasonable level of international diversification, though the portfolio leans heavily towards North American markets. Compared to benchmarks, the exposure to emerging markets is limited, which might reduce potential growth opportunities. Consider increasing international exposure to enhance diversification and capture growth in emerging markets, while keeping an eye on geopolitical risks and currency fluctuations.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    23%
  • Mid-cap
    21%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization is diversified across mega (36%), big (23%), and medium (21%) companies. This mix provides a good balance between stability and growth potential, as larger companies tend to be more stable, while smaller ones offer higher growth prospects. Compared to benchmarks, the portfolio's market cap distribution is well-aligned, supporting diversification and risk management. To maintain this balance, consider periodically reviewing your market cap exposure and adjusting allocations to align with your investment goals.

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 can be optimized using the Efficient Frontier, which identifies the best risk-return ratio based on current assets and allocation. This approach helps ensure that the portfolio is achieving the maximum return for a given level of risk. By adjusting allocations among existing assets, you can enhance the portfolio's efficiency without compromising diversification. Regularly review your portfolio's risk-return profile and make adjustments as needed to maintain an optimal balance between risk and reward.

Dividends Info

  • Ares Capital Corporation 6.60%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 4.40%
  • Hercules Capital Inc 8.30%
  • Main Street Capital Corporation 6.70%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.90%

The portfolio's dividend yield is 2.90%, with notable contributions from Ares Capital (6.60%), Hercules Capital (8.30%), and Main Street Capital (6.70%). Dividends can provide a steady income stream, which is beneficial for investors seeking regular cash flow. Compared to benchmarks, this yield is competitive, supporting the portfolio's overall return. To maximize income, consider periodically reviewing your dividend-paying stocks and adjusting allocations to maintain a balanced mix of growth and income-generating assets.

Ongoing product costs Info

  • Vanguard Extended Duration Treasury Index Fund ETF Shares 0.06%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • 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) 0.03%

The portfolio's total expense ratio (TER) is impressively low at 0.03%, thanks to the inclusion of cost-effective Vanguard ETFs. Low costs are crucial for long-term performance, as they allow a larger portion of returns to be reinvested. Compared to industry averages, this TER is highly competitive, supporting the portfolio's growth objectives. To maintain cost efficiency, consider regularly reviewing your portfolio's expenses and exploring opportunities to reduce costs further, such as by selecting low-cost funds and minimizing transaction fees.

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