A cautious portfolio with moderate diversification and a focus on income and stability

Report created on Mar 27, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is structured with a balanced mix of equity and bond ETFs, emphasizing income and stability. With 73% in stocks and 20% in bonds, it leans towards equities but maintains a significant bond allocation. This composition aligns with a cautious risk profile, offering growth potential while mitigating risk through bonds. Compared to a typical benchmark, this allocation reflects a moderate diversification approach. To enhance this, consider assessing the distribution within asset classes to ensure it aligns with long-term objectives. Balancing stock and bond allocations can help maintain stability while capturing growth opportunities.

Growth Info

Historically, the portfolio has achieved a compound annual growth rate (CAGR) of 10.76%, demonstrating solid performance over time. This is illustrated by a hypothetical investment growing significantly, outperforming many standard benchmarks. However, with a maximum drawdown of -12.20%, it has experienced some volatility, which is typical for portfolios with substantial equity exposure. This performance indicates a strong return potential, but it's crucial to recognize that past performance doesn't guarantee future results. To maintain this trajectory, regularly review and adjust allocations to manage risk and capitalize on emerging opportunities.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with 1,000 simulations indicating a median return of 302.3%. These simulations use historical data to estimate future performance, highlighting the portfolio's potential to achieve substantial growth. However, it's important to note that these projections are inherently uncertain and should not be relied upon solely for decision-making. To enhance confidence in future returns, consider incorporating scenario analysis and stress testing to understand how the portfolio might perform under various market conditions.

Asset classes Info

  • Stocks
    73%
  • Bonds
    20%
  • Cash
    6%
  • No data
    1%

The portfolio's asset allocation spans stocks, bonds, and cash, with stocks making up 73% of the total. This heavy equity weighting provides growth potential but may increase volatility. The bond allocation of 20% offers stability and income, complementing the equity exposure. Compared to typical benchmarks, this allocation reflects a moderately diversified approach. To enhance diversification, consider reviewing the balance within each asset class. Adjusting the mix of growth-oriented and income-generating assets can help align the portfolio with long-term goals while managing risk.

Sectors Info

  • Technology
    18%
  • Financials
    11%
  • Utilities
    9%
  • Energy
    7%
  • Consumer Discretionary
    7%
  • Consumer Staples
    6%
  • Industrials
    6%
  • Health Care
    5%
  • Telecommunications
    5%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Consumer Discretionary
    1%

Sector allocation is diverse, with technology (18%) and financial services (11%) leading the way. This distribution aligns with common benchmarks, providing a balanced exposure across various economic sectors. However, the technology focus may introduce higher volatility, especially during interest rate changes. To ensure stability, consider assessing whether the sector weights align with your risk tolerance and investment goals. Diversifying further across sectors could mitigate potential risks associated with concentrated exposures, enhancing the portfolio's resilience to market fluctuations.

Regions Info

  • North America
    67%
  • Europe Developed
    7%
  • Japan
    2%
  • Asia Emerging
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, with 67% exposure. This concentration may limit international diversification benefits, potentially increasing vulnerability to regional economic downturns. Compared to common benchmarks, the portfolio is underexposed to emerging markets and other global regions. To enhance geographic diversification, consider increasing exposure to international markets, which can provide growth opportunities and reduce reliance on any single economy. A more balanced geographic allocation can help mitigate risks and capture global growth potential.

Market capitalization Info

  • Large-cap
    27%
  • Mega-cap
    23%
  • Mid-cap
    14%
  • Small-cap
    4%
  • Micro-cap
    3%

The portfolio's market capitalization exposure is diverse, with significant allocations to big (27%) and mega (23%) cap stocks. This focus on larger companies provides stability and lower volatility, aligning with a cautious investment profile. However, the smaller allocation to medium (14%), small (4%), and micro (3%) cap stocks may limit growth opportunities. To optimize diversification, consider adjusting the balance across market capitalizations. Increasing exposure to smaller-cap stocks can enhance growth potential while maintaining a stable core of large-cap investments.

Redundant positions Info

  • JPMorgan Nasdaq Equity Premium Income ETF
    Invesco NASDAQ 100 ETF
    iShares Evolved U.S. Technology ETF
    High correlation

The portfolio contains highly correlated assets, particularly within the technology sector, such as the JPMorgan Nasdaq Equity Premium Income ETF and Invesco NASDAQ 100 ETF. High correlation means these assets tend to move in the same direction, reducing diversification benefits. During market downturns, this could amplify losses. To enhance diversification, consider reducing exposure to overlapping assets and introducing less correlated alternatives. This adjustment can help manage risk and improve the portfolio's resilience to market fluctuations, ensuring a more balanced risk-return profile.

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 could benefit from optimization using the Efficient Frontier, which seeks the best possible risk-return ratio. Currently, the portfolio's expected return is below the optimal level, suggesting room for improvement. By adjusting asset allocations, the portfolio could achieve a more efficient balance, enhancing returns without increasing risk. This optimization focuses on reallocating existing assets rather than introducing new ones, ensuring alignment with current investment goals. Regularly revisiting the portfolio's efficiency can help maintain an optimal risk-return balance, supporting long-term financial objectives.

Dividends Info

  • iShares Core U.S. Aggregate Bond ETF 4.10%
  • Global X Artificial Intelligence & Technology ETF 0.10%
  • Pacer US Small Cap Cash Cows 100 ETF 0.60%
  • SPDR® Global Dow ETF 1.30%
  • iShares J.P. Morgan USD Emerging Markets Bond ETF 3.80%
  • iShares Core High Dividend ETF 2.70%
  • iShares Ultra Short-Term Bond ETF 3.50%
  • iShares Evolved U.S. Technology ETF 0.30%
  • iShares U.S. Energy ETF 1.90%
  • JPMorgan Equity Premium Income ETF 7.40%
  • JPMorgan Nasdaq Equity Premium Income ETF 10.60%
  • SPDR® SSGA US Large Cap Low Volatility Index ETF 0.90%
  • Legg Mason Low Volatility High Dividend ETF 2.80%
  • Legg Mason International Low Volatility High Dividend ETF 4.90%
  • Invesco NASDAQ 100 ETF 0.50%
  • SPDR® SSGA US Small Cap Low Volatility Index ETF 1.40%
  • Invesco S&P 500® Momentum ETF 0.30%
  • iShares Broad USD High Yield Corporate Bond ETF 5.70%
  • Invesco S&P MidCap Momentum ETF 0.30%
  • Weighted yield (per year) 2.49%

With a total yield of 2.49%, the portfolio generates consistent income, supporting a cautious investment strategy. Dividend-focused ETFs, like the iShares Core High Dividend ETF, contribute significantly to this yield. For income-oriented investors, this is beneficial as it provides regular cash flow. However, it's crucial to balance dividend income with growth potential. Consider reviewing the dividend yield against your income needs and investment goals. Ensuring a balance between high-yield and growth-oriented assets can support both immediate income needs and long-term wealth accumulation.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • Global X Artificial Intelligence & Technology ETF 0.68%
  • Pacer US Small Cap Cash Cows 100 ETF 0.59%
  • SPDR® Global Dow ETF 0.50%
  • iShares J.P. Morgan USD Emerging Markets Bond ETF 0.39%
  • iShares Core High Dividend ETF 0.08%
  • iShares Ultra Short-Term Bond ETF 0.08%
  • iShares Evolved U.S. Technology ETF 0.18%
  • iShares U.S. Energy ETF 0.40%
  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • SPDR® SSGA US Large Cap Low Volatility Index ETF 0.12%
  • Legg Mason Low Volatility High Dividend ETF 0.27%
  • Legg Mason International Low Volatility High Dividend ETF 0.40%
  • Invesco NASDAQ 100 ETF 0.15%
  • SPDR® SSGA US Small Cap Low Volatility Index ETF 0.12%
  • Invesco S&P 500® Momentum ETF 0.13%
  • iShares Broad USD High Yield Corporate Bond ETF 0.08%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.22%

The portfolio's total expense ratio (TER) stands at 0.22%, reflecting cost-efficient management. Low costs are crucial for enhancing long-term returns, as high fees can erode gains over time. Compared to industry averages, this TER is competitive, supporting better net returns. To maintain cost efficiency, consider regularly reviewing and comparing fund expenses. Replacing higher-cost funds with more affordable alternatives can optimize returns. Keeping costs low while ensuring quality investments can significantly impact the portfolio's overall performance and align with a cautious investment approach.

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