A balanced portfolio with strong global diversification and efficient cost structure

Report created on Jan 14, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is evenly split between two ETFs: the Vanguard S&P 500 ETF and the Vanguard Total International Stock Index Fund ETF Shares. This 50-50 allocation between domestic and international equities provides a solid foundation for diversification, aligning with common balanced portfolio benchmarks. The focus on equities suggests a moderate risk profile, suitable for growth-oriented investors. To further diversify, consider adding other asset classes like bonds or real estate, which can provide stability during market fluctuations.

Growth Info

Historically, this portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 10.18%, indicating robust past performance. A maximum drawdown of -33.92% highlights potential risk during downturns, which is typical for equity-heavy portfolios. While past performance is not indicative of future results, this history suggests resilience and growth potential. Monitoring market conditions and adjusting allocations as needed can help maintain this performance level while managing risk.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes for this portfolio, using historical data to model future scenarios. With 1,000 simulations, the median outcome suggests a 249.01% increase in value, while the 5th percentile indicates a 15.93% return. These projections highlight the inherent uncertainty in investing, reinforcing the importance of a diversified approach. Regularly reviewing and adjusting your portfolio based on these projections can help align with your financial goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, comprising 98.95% of the total allocation. This focus on equities provides significant growth potential but also increases exposure to market volatility. The minimal cash and other asset allocations limit diversification benefits. To enhance risk management, consider incorporating fixed-income securities or alternative investments, which can provide stability and reduce portfolio volatility during market downturns.

Sectors Info

  • Technology
    23%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    3%

The portfolio exhibits a balanced sector allocation, with notable exposure to technology (23.08%), financial services (16.97%), and industrials (11.30%). This sectoral balance aligns closely with global benchmarks, indicating sound diversification. However, the technology sector's prominence could lead to higher volatility, especially during economic shifts. To mitigate concentration risk, consider periodically rebalancing to maintain sector diversity and adjust to evolving market conditions.

Regions Info

  • North America
    54%
  • Europe Developed
    19%
  • Asia Emerging
    8%
  • Japan
    8%
  • Asia Developed
    5%
  • Australasia
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographically, the portfolio is well-diversified, with 53.72% in North America and significant allocations in Europe and Asia. This global exposure reduces reliance on any single region and mitigates geopolitical risk. However, emerging markets are underrepresented, which could limit growth opportunities. Consider increasing exposure to these markets to capture potential high-growth opportunities and further enhance geographic diversification.

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 be optimized using the Efficient Frontier, which suggests the best possible allocation for maximizing returns at a given risk level. While the current allocation is well-balanced, exploring slight adjustments between the existing assets could enhance efficiency. This optimization focuses on improving the risk-return ratio without necessarily altering the portfolio's overall diversification or strategy.

Dividends Info

  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.35%

The portfolio's dividend yield stands at 2.35%, offering a modest income stream. This yield is a valuable component for total returns, particularly in stable or declining markets. Dividend-paying stocks can provide a cushion during market downturns, making them attractive for income-focused investors. Consider reinvesting dividends to enhance compounding growth or using them as a source of regular income, depending on your financial objectives.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from impressively low costs, with a Total Expense Ratio (TER) of 0.06%. These low fees support better long-term performance by minimizing the impact of costs on returns. Maintaining a focus on cost-efficient investments can significantly enhance net returns over time. Regularly reviewing and comparing expense ratios can ensure continued cost efficiency in the portfolio.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey