Simple two fund mix blending US stocks with long term treasuries and moderate income
Report created on May 29, 2026Risk profile
4/7
Diversification profile
3/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 80.00% -
TL iShares 20+ Year Treasury Bond ETF
TLT - US4642874329 20.00%
The portfolio is very straightforward: 80% in a US large‑cap stock index ETF and 20% in a long‑term US Treasury bond ETF. This creates a classic “barbell” structure, with one holding driving growth and the other acting mainly as a stabilizer and income source. A simple structure like this is easy to understand and monitor because each piece has a clear role. The stock fund dominates overall behavior, while the bond fund introduces a contrasting return pattern. This mix lines up with the “balanced” label: mostly growth‑oriented, but not all‑equity. Simplicity here is a strength, because there are fewer moving parts and it’s clearer what’s causing gains or losses over time.
Growth
Over the last decade, a hypothetical $1,000 grew to about $3,538, a compound annual growth rate (CAGR) of 13.53%. CAGR is like average speed on a road trip, smoothing out bumps to show steady progress. The portfolio’s max drawdown was -26.76% during early 2020, meaning its largest peak‑to‑trough fall was smaller than both the US and global market drops. Compared with benchmarks, it lagged the US market by 1.92% per year but beat the global market by 0.74% per year. That pattern fits a US‑focused, slightly damped‑volatility mix. As always, past returns just show how this combination behaved before and can’t guarantee similar results next time.
Projection
The Monte Carlo projection uses historical returns and volatility to simulate 1,000 possible future paths for the next 15 years. Think of it as running the portfolio through many “what if” market scenarios based on past patterns. The median outcome turns $1,000 into about $2,547, with a wide range from roughly $1,120 to $6,106 between the 5th and 95th percentiles. The average simulated annual return is 7.12%, lower than the historical figure, partly because the model bakes in uncertainty and variability. About 74% of simulations end with a gain. These results highlight that outcomes cluster around a middle range but can still vary a lot, and they’re only as reliable as the historical data they’re built from.
Asset classes
- Stocks 80%
- Bonds 20%
By asset class, the portfolio is 80% stocks and 20% bonds, a growth‑tilted but not extreme split. Stocks are typically the main driver of long‑term growth, while bonds often add income and can cushion stock market shocks. Compared with a 100% equity approach, this allocation accepts somewhat lower expected returns in exchange for smaller swings and historically milder drawdowns. Versus more bond‑heavy mixes, it leans clearly toward capital growth. This aligns well with a “balanced” profile: the bond slice is meaningful but not dominant, so the equity side still sets the tone. The combination provides diversification across two very different asset types without becoming overly complex.
Sectors
- Technology 29%
- Financials 9%
- Telecommunications 9%
- Consumer Discretionary 8%
- Health Care 7%
- Industrials 7%
- Consumer Staples 4%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 1%
This breakdown covers the equity portion of your portfolio only.
Sector exposure comes entirely from the broad US stock index, with technology the largest slice at 29%, followed by smaller allocations to financials, telecom, consumer areas, health care, and others. This looks close to typical broad US market weights, which is helpful because it avoids big active bets on any single economic area. A technology tilt is common today since many of the biggest companies fall there, and it can mean more sensitivity to growth expectations and interest rate shifts. Still, the presence of multiple other sectors provides balance. Overall, the sector breakdown is well‑diversified and broadly aligned with standard US equity benchmarks, which supports a stable foundation.
Regions
- North America 80%
This breakdown covers the equity portion of your portfolio only.
Geographically, the portfolio is effectively 100% in North America, with 80% in US stocks and 20% in US Treasuries. That means all the economic and currency exposure sits in one country, albeit one of the deepest and most diversified markets in the world. This kind of home‑bias can work well in periods when US assets outperform, but it does miss direct exposure to other regions that may lead at different times. Compared with a global equity benchmark that spreads across many countries, this portfolio is more concentrated by geography. The flip side is simplicity: everything is tied to one currency and regulatory environment, making it easier to understand how macro news may affect the holdings.
Market capitalization
- Mega-cap 37%
- Large-cap 28%
- Mid-cap 15%
- Small-cap 1%
This breakdown covers the equity portion of your portfolio only.
The stock allocation is heavily tilted toward mega‑cap and large‑cap companies, with 37% in mega caps, 28% in large caps, and relatively modest exposure to mid and small caps. This is typical of a broad US index that weights companies by size, so larger firms naturally dominate. Bigger companies often have more diversified businesses and steadier earnings, which can make returns somewhat more stable compared to portfolios leaning heavily into smaller companies. The trade‑off is that it captures less of the distinct behavior of small caps, which sometimes move differently from giants. The market‑cap mix here tracks mainstream market structure closely, which is a positive for transparency and predictability.
True holdings
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NV NVIDIA Corporation 6.28%
Part of fund(s):- Vanguard S&P 500 ETF
-
AA Apple Inc 5.16%
Part of fund(s):- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 3.92%
Part of fund(s):- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 3.35%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 2.90%
Part of fund(s):- Vanguard S&P 500 ETF
-
AV Broadcom Inc 2.56%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 2.31%
Part of fund(s):- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 1.74%
Part of fund(s):- Vanguard S&P 500 ETF
-
TS Tesla Inc 1.39%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard S&P 500 ETF
-
BR Berkshire Hathaway Inc 1.13%
Part of fund(s):- Vanguard S&P 500 ETF
- Top 10 total 30.74%
This breakdown covers the equity portion of your portfolio only.
Looking through the ETF to its top holdings shows meaningful exposure to a handful of very large names like NVIDIA, Apple, Microsoft, Amazon, and Alphabet. Several of these appear in the index’s top positions, so they represent a noticeable slice of the portfolio even though you don’t hold them directly. Because these companies are held through just one ETF, overlap isn’t excessive, but they still create concentration in the biggest growth‑oriented firms. It’s worth noting that this look‑through only covers the top 10 ETF holdings, so actual overlap across all underlying positions is likely somewhat higher. Even so, the pattern is consistent with a cap‑weighted US index fund.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure is broadly neutral across all six factors: value, momentum, quality, yield, size, and low volatility. Factor exposure is basically how much the portfolio leans into specific traits that research links to returns, like “cheapness” (value) or “steadiness” (low volatility). Scores around 50% mean it behaves a lot like the overall market for that factor. The slightly lower size score reflects the tilt toward larger companies, while the other factors sit very close to neutral. This suggests the portfolio is not making strong bets on any academic return driver. Instead, it behaves like a broad market blend, with performance mainly driven by overall market moves rather than specialized factor tilts.
Risk contribution
-
Vanguard S&P 500 ETF
Weight: 80.00% 98.9% -
iShares 20+ Year Treasury Bond ETF
Weight: 20.00% 1.1%
Risk contribution shows how much each holding drives the portfolio’s ups and downs, which can differ from simple weight. Here, the US stock ETF is 80% of the portfolio but contributes about 99% of the total risk. The long‑term Treasury ETF is 20% by weight yet adds only around 1% of risk, thanks to its historically lower and differently patterned volatility. This tells you that, in practice, the portfolio’s behavior is almost entirely equity‑driven. The bond allocation still matters—for income and diversification—but it doesn’t significantly change day‑to‑day swings. This kind of profile is common in stock‑heavy mixes, where smaller bond slices mainly act as a stabilizing counterweight.
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 risk vs. return chart shows this portfolio sitting on or very close to the efficient frontier. The efficient frontier is the curve of best possible returns for each risk level using these two holdings in different weights. The current Sharpe ratio of 0.61, a measure of return per unit of risk above cash, is below the maximum achievable 0.84 but above the minimum‑risk mix at 0.52. That means different weights in the same two ETFs could, in theory, deliver higher risk‑adjusted returns, but the existing allocation is already reasonably efficient. In other words, given these building blocks, the portfolio balances risk and reward in a way that lines up well with modern portfolio theory.
Dividends
- iShares 20+ Year Treasury Bond ETF 4.50%
- Vanguard S&P 500 ETF 1.00%
- Weighted yield (per year) 1.70%
The overall yield of about 1.70% comes from both holdings: roughly 1.00% from the US stock ETF and 4.50% from the long‑term Treasury ETF. Yield is the cash income paid out each year as a percentage of the invested amount, like rent from a property. In this mix, most of the income comes from the bond side, even though it’s only 20% of the portfolio. The stock ETF’s lower yield reflects its focus on large companies that often reinvest earnings for growth. This means the portfolio’s total return historically has leaned more on price changes than on income, with dividends and bond interest playing a supporting but still visible role.
Ongoing product costs
- iShares 20+ Year Treasury Bond ETF 0.15%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.05%
Total ongoing costs are very low at about 0.05% per year (the Total Expense Ratio, or TER). TER is the annual fee charged by funds, taken directly from assets rather than as a separate bill. Here, the core US stock ETF costs 0.03% and the long‑term Treasury ETF 0.15%, which is still inexpensive for a targeted bond fund. Low costs are a strong positive because fees compound in reverse over time—every fraction of a percent saved stays invested. This fee level is significantly below many active funds and even many index products, supporting better long‑term performance potential simply by leaving more of the portfolio’s returns in your hands.
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