A balanced portfolio with a strong US focus and moderate risk exposure

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 with a balanced risk tolerance, seeking moderate growth and income over a medium to long-term horizon. It emphasizes US equities while maintaining a bond component for stability. This approach is ideal for individuals aiming to build wealth steadily, while managing risk through diversification across sectors and asset classes.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    70.00%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    15.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    15.00%

The portfolio is heavily weighted towards equities, with the Vanguard S&P 500 ETF making up 70% of the holdings, complemented by a 15% allocation to bonds through the Vanguard Total Bond Market Index Fund ETF. This composition leans towards growth with a moderate risk profile, suitable for investors seeking balanced growth. Compared to common benchmarks, this portfolio shows a higher concentration in US equities, which could limit exposure to global markets.

Growth Info

Historically, the portfolio has demonstrated a robust CAGR of 11.93%, indicating strong growth over time. However, the maximum drawdown of 30.5% highlights potential volatility during market downturns. This performance is consistent with a balanced investment approach, offering good returns while managing risk. Investors should consider that past performance does not guarantee future results, and market conditions can change.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, indicate a potential 50th percentile return of 222.96%. This suggests the portfolio could double in value over a typical investment horizon. However, it's important to remember that these projections are based on past data and assumptions, which may not hold true in the future. Regularly reviewing and adjusting the portfolio can help align with evolving market conditions.

Asset classes Info

  • Stocks
    85%
  • Bonds
    15%
  • Cash
    0%
  • No data
    0%

With 84.9% in stocks and 14.8% in bonds, the portfolio is primarily equity-focused. This allocation supports growth but may expose the investor to higher volatility compared to more diversified asset class distributions. Balancing with additional asset classes like real estate or commodities could enhance diversification and potentially reduce risk, aligning more closely with a typical balanced portfolio benchmark.

Sectors Info

  • Technology
    24%
  • Financials
    12%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    4%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio's sector allocation shows a significant concentration in Technology at 24.4%, followed by Financial Services and Healthcare. This tech-heavy focus can lead to higher volatility, especially during interest rate hikes or tech sector downturns. A more balanced sector distribution could help mitigate risk and provide smoother returns. Investors might consider diversifying into underrepresented sectors to achieve a more stable performance.

Regions Info

  • North America
    85%
  • Europe Developed
    0%
  • Asia Developed
    0%
  • Latin America
    0%

Geographically, the portfolio is predominantly focused on North America, with 84.5% exposure. This concentration limits diversification benefits that could be gained from international markets. Expanding geographic exposure, especially to emerging markets, could enhance growth opportunities and reduce regional risk. Aligning with global benchmarks typically involves a more diverse geographic allocation.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.94%

The portfolio's dividend yield stands at 1.94%, providing a moderate income stream. This yield is primarily driven by the Schwab U.S. Dividend Equity ETF and the bond fund. For investors seeking income, increasing the allocation to higher-yielding assets could enhance cash flow. However, it's important to balance yield with growth potential to maintain overall portfolio performance.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) is impressively low at 0.03%, which supports better long-term performance by minimizing costs. Low fees are a significant advantage, as they allow more of the portfolio's returns to compound over time. Maintaining this cost efficiency is beneficial, but investors should remain vigilant about any changes in fund fees that could impact returns.

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.

The portfolio aligns well with the Efficient Frontier, indicating that it is optimized for its current risk-return profile. This means that, given the existing asset allocation, the portfolio is achieving the best possible risk-return ratio. However, investors should periodically reassess their risk tolerance and market conditions to ensure continued alignment with personal investment goals.

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