A balanced and broadly diversified portfolio with a strong emphasis on stocks and low costs
Report created on Oct 18, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 80.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00%
This portfolio exhibits a straightforward yet effective composition, allocating 80% to a total stock market fund and 20% to international stocks. Such a structure ensures broad market exposure, capturing the performance of both U.S. and global equities. The exclusive focus on stock ETFs reflects a growth-oriented strategy, albeit with a balanced risk profile, as indicated by the portfolio's risk score. The simplicity of this approach, supported by very low total expense ratios (TERs), underscores a commitment to cost efficiency and long-term growth potential.
Growth
With a Compound Annual Growth Rate (CAGR) of 13.74% and a maximum drawdown of -34.70%, the historical performance demonstrates resilience and substantial growth over time. The days contributing most to returns highlight the portfolio's sensitivity to market highs. While past performance is a helpful guide, it's crucial to remember that it doesn't guarantee future results. This performance, relative to the balanced risk profile, suggests a well-executed strategy in capturing market upswings while managing downturns.
Projection
Monte Carlo simulations, which use historical data to forecast a range of possible future outcomes, suggest a median increase of 336.7% in portfolio value. The positive returns in 983 out of 1,000 simulations underscore the portfolio's strong growth potential. However, it's essential to view these projections with caution, as they cannot account for unforeseen market shifts or global economic changes.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's almost exclusive allocation to stocks, with a minimal cash reserve, aligns with its growth-oriented strategy. This asset class distribution is typical for investors seeking higher returns, albeit with a willingness to accept short-term volatility. The absence of bonds or alternative investments might limit diversification benefits, especially during stock market downturns, suggesting a potential area for strategic enhancement.
Sectors
- Technology 30%
- Financials 15%
- Consumer Discretionary 11%
- Industrials 10%
- Health Care 9%
- Telecommunications 9%
- Consumer Staples 5%
- Energy 3%
- Basic Materials 3%
- Real Estate 3%
- Utilities 2%
The sectoral allocation leans heavily towards technology, financial services, and consumer cyclicals. This concentration in high-growth areas can offer significant upside during bull markets but may also introduce higher volatility. The presence in diverse sectors such as healthcare and industrials, however, provides a counterbalance, contributing to risk management and offering stability amidst sector-specific downturns.
Regions
- North America 81%
- Europe Developed 8%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
With 81% of assets in North America and a modest but strategic allocation to developed and emerging markets abroad, the portfolio is well-positioned to capture global growth while maintaining a strong domestic foundation. This geographic distribution supports diversification across different economic cycles and regional market dynamics. However, the limited exposure to emerging markets might be a missed opportunity for higher growth rates.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 19%
- Small-cap 6%
- Micro-cap 2%
The portfolio's emphasis on mega and big-cap stocks, constituting 72% of the allocation, suggests a preference for established, less volatile companies. While this can offer stability and resilience, the relatively smaller allocation to medium, small, and micro-caps could limit exposure to high-growth potential sectors. Adjusting this balance could enhance returns, 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 current asset allocation, while effective in pursuing growth within a balanced risk framework, could potentially be optimized further. Employing the Efficient Frontier model could reveal opportunities to adjust the portfolio's asset mix, achieving the best possible risk-return ratio. However, this optimization would need to consider the investor's goals, risk tolerance, and investment horizon, ensuring that any adjustments align with their overall strategy.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.52%
The dividend yields of 1.20% and 2.80% from the domestic and international stock ETFs, respectively, contribute to the portfolio's total yield of 1.52%. This income stream, while modest, enhances overall returns and provides a cushion during market volatility. For investors valuing income alongside capital appreciation, this yield is a beneficial component of the total return.
Ongoing product costs
- 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 exceptionally low costs associated with this portfolio, with a total expense ratio of just 0.03%, significantly enhance its long-term growth potential. Lower costs mean more of the investment's return is retained by the investor, a critical factor in compounding growth over time. This cost efficiency is a notable strength of the portfolio, aligning with best practices for maximizing investor returns.
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