Balanced portfolio with a strong focus on US equities and low costs

Report created on Jun 29, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is predominantly invested in US equities, with a significant allocation towards technology and financial services sectors. The use of Vanguard's institutional shares emphasizes a preference for low-cost index fund investing. The balanced index and treasury money market funds provide some bond and cash exposure, respectively, but the overwhelming focus is on stock, making it somewhat aggressive for a profile labeled as balanced.

Growth Info

Historically, this portfolio has demonstrated robust growth, with a Compound Annual Growth Rate (CAGR) of 13.77%. The maximum drawdown of -30.80% suggests a period of significant volatility, likely reflecting the high equity exposure. The days contributing to 90% of returns highlight the impact of short-term gains, underscoring the portfolio's sensitivity to market movements.

Projection Info

Monte Carlo simulations, projecting a wide range of potential outcomes based on historical data, suggest a median increase of 317.6% in portfolio value. While encouraging, it's important to remember that these projections are not guarantees but tools to assess risk and potential growth. The high number of simulations with positive returns reinforces the portfolio's strong historical performance but doesn't eliminate future risks.

Asset classes Info

  • Stocks
    89%
  • Bonds
    8%

The allocation across asset classes shows a heavy tilt towards stocks (89%), with a smaller presence in bonds (8%) and cash (3%). This distribution underlines a growth-oriented strategy but raises questions about diversification and risk management, especially considering the portfolio's balanced profile classification.

Sectors Info

  • Technology
    36%
  • Financials
    12%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Health Care
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

Sector allocation is heavily weighted towards technology, financial services, and consumer cyclical sectors, which may lead to higher volatility during economic downturns or sector-specific shocks. This concentration also suggests a bet on continued growth in these areas, which have historically performed well but can be cyclical.

Regions Info

  • North America
    97%

Geographically, the portfolio is almost entirely invested in North America (97%), with no exposure to developed Europe, Asia, or emerging markets. This lack of international diversification can increase vulnerability to US market downturns and misses potential growth opportunities abroad.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    26%
  • Mid-cap
    15%
  • Small-cap
    2%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for mega (45%) and big (26%) cap stocks, which tend to be more stable than smaller companies but can also limit growth potential. Medium, small, and micro caps represent a smaller portion of the portfolio, suggesting a cautious approach to risk.

Redundant positions Info

  • VANGUARD GROWTH INDEX FUND INSTITUTIONAL SHARES
    VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES
    VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES
    VANGUARD BALANCED INDEX FUND INSTITUTIONAL SHARES
    High correlation

The high correlation among the equity funds indicates overlapping investments, which can dilute diversification benefits. This redundancy, particularly among the growth, institutional index, and total stock market funds, suggests an opportunity to streamline the portfolio for better efficiency without sacrificing performance.

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.

Optimizing this portfolio involves addressing the high correlation among the equity holdings. Diversifying more effectively across different asset classes, sectors, and geographies could enhance returns while reducing risk. Considering the Efficient Frontier, reallocating assets to decrease overlap could improve the risk-return profile without necessarily increasing the portfolio's overall risk level.

Dividends Info

  • VANGUARD BALANCED INDEX FUND INSTITUTIONAL SHARES 5.60%
  • VANGUARD GROWTH INDEX FUND INSTITUTIONAL SHARES 0.30%
  • VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES 2.10%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES 0.90%
  • Vanguard Treasury Money Market Fund 4.30%
  • Weighted yield (per year) 2.09%

Dividend yields contribute to the portfolio's total return, with a combined yield of 2.09%. The balanced fund's high yield (5.60%) and the treasury money market fund's yield (4.30%) provide income, albeit with varying degrees of risk and growth potential. The low yields in growth-oriented funds reflect a focus on capital appreciation over income.

Ongoing product costs Info

  • VANGUARD BALANCED INDEX FUND INSTITUTIONAL SHARES 0.06%
  • VANGUARD GROWTH INDEX FUND INSTITUTIONAL SHARES 0.04%
  • VANGUARD INSTITUTIONAL INDEX FUND INSTITUTIONAL PLUS SHARES 0.02%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND INSTITUTIONAL PLUS SHARES 0.02%
  • Vanguard Treasury Money Market Fund 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from exceptionally low total expense ratios (TER), averaging 0.04%, which is impressive and supports better long-term performance by minimizing cost drag. Vanguard's reputation for low-cost funds is well represented here, aligning with best practices for cost-conscious investing.

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