A balanced and diversified portfolio with strong US exposure and moderate emerging markets presence

Report created on Mar 18, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of seven holdings, with a significant allocation to ETFs. The Vanguard S&P 500 ETF holds the largest share at 30%, followed by the Schwab Fundamental Emerging Markets ETF at 20%. The remaining assets include international bonds, a mix of regional ETFs, and Berkshire Hathaway stock. This composition reflects a balanced approach, emphasizing large-cap US equities while diversifying with emerging markets and bond exposure. Such diversification can help mitigate risks associated with market volatility, providing a stable foundation for long-term growth.

Growth Info

Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 9.76%, indicating robust performance over time. The maximum drawdown of -30.10% highlights potential volatility, which is common in balanced portfolios. Comparing this to a benchmark, such as the S&P 500, helps contextualize its performance, as the portfolio may lag in bull markets but outperform during downturns. Despite the drawdown, the overall growth is promising. Investors should remain aware that past performance does not guarantee future results, and market conditions can change.

Projection Info

Forward projections using Monte Carlo simulations offer insights into potential future outcomes. With 1,000 simulations, the portfolio shows a median growth of 202.1% and an annualized return of 9.68%. Monte Carlo simulations use historical data to predict possible future scenarios, highlighting the range of potential returns. While 960 simulations resulted in positive returns, it's important to note that these projections are not guarantees. Investors should use these insights to understand potential risks and rewards, ensuring their investment strategy aligns with their financial goals and risk tolerance.

Asset classes Info

  • Stocks
    80%
  • Bonds
    15%
  • Cash
    3%
  • Other
    3%

The portfolio's asset allocation includes 80% in stocks, 15% in bonds, and small allocations to cash and other assets. This structure aligns with a balanced investment strategy, providing growth potential through equities while offering stability with bonds. Compared to benchmarks, this allocation is well-rounded, catering to investors seeking moderate risk and return. Diversification across asset classes can help reduce portfolio volatility, ensuring a smoother investment journey. Investors may consider adjusting allocations based on their changing financial needs and market conditions.

Sectors Info

  • Financials
    24%
  • Technology
    15%
  • Consumer Discretionary
    8%
  • Industrials
    7%
  • Telecommunications
    6%
  • Health Care
    5%
  • Basic Materials
    4%
  • Consumer Staples
    4%
  • Energy
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is diverse, with financial services at 24% and technology at 15% leading the way. This balance aligns with global benchmarks, offering exposure to growth sectors while maintaining a broad market presence. Such diversification can help mitigate sector-specific risks, providing resilience against market fluctuations. However, investors should remain vigilant about sector trends, as shifts in economic conditions can impact performance. Regularly reviewing sector exposure ensures alignment with market dynamics and personal investment goals, optimizing the portfolio's potential.

Regions Info

  • North America
    50%
  • Asia Emerging
    11%
  • Europe Developed
    10%
  • Asia Developed
    4%
  • Latin America
    3%
  • Africa/Middle East
    2%

The portfolio's geographic allocation is heavily weighted towards North America at 50%, with emerging markets and Europe also represented. This distribution provides a mix of stability and growth potential, leveraging the strength of developed markets while capturing opportunities in emerging regions. Compared to global benchmarks, the portfolio is well-diversified, though it may benefit from increased exposure to underrepresented areas. Geographic diversification can reduce region-specific risks, enhancing overall portfolio resilience. Investors should consider global economic trends when assessing geographic allocations.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    18%
  • Mid-cap
    12%
  • Small-cap
    7%
  • No data
    5%
  • Micro-cap
    1%

Market capitalization exposure is skewed towards mega-cap stocks at 42%, with smaller allocations to big, medium, and small caps. This focus on large-cap stocks provides stability and lower volatility, as these companies are often well-established with strong market positions. However, including small and mid-cap stocks can enhance growth potential, capturing opportunities in emerging companies. Investors should assess their risk tolerance when considering market cap exposure, ensuring it aligns with their investment objectives and time horizon.

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 can be optimized using the Efficient Frontier, which identifies the best risk-return ratio for a given set of assets. This optimization focuses solely on current assets, suggesting potential allocation changes to improve efficiency. While the portfolio is balanced, exploring the Efficient Frontier can reveal opportunities to enhance returns without increasing risk. Investors should consider this analysis as part of their ongoing portfolio management, ensuring their investments remain aligned with their risk tolerance and financial objectives.

Dividends Info

  • Vanguard Total International Bond Index Fund ETF Shares 4.30%
  • Invesco DB Precious Metals Fund 3.70%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 4.40%
  • WisdomTree Europe Hedged Equity Fund 2.90%
  • Vanguard Small-Cap Value Index Fund ETF Shares 1.50%
  • Vanguard S&P 500 ETF 1.30%
  • Weighted yield (per year) 2.54%

The portfolio's total dividend yield is 2.54%, with contributions from various holdings, including international bonds and emerging market equities. Dividends provide a steady income stream, enhancing total returns, especially during periods of market volatility. For income-focused investors, dividend-paying assets can offer stability and cash flow. It's important to consider dividend sustainability and growth potential, as these factors can impact long-term returns. Investors should regularly review dividend yields to ensure alignment with their income needs and investment strategy.

Ongoing product costs Info

  • Vanguard Total International Bond Index Fund ETF Shares 0.07%
  • Invesco DB Precious Metals Fund 0.75%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 0.39%
  • WisdomTree Europe Hedged Equity Fund 0.58%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) is 0.20%, reflecting low costs that support long-term performance. Vanguard's low-cost ETFs contribute significantly to this efficiency, reducing the drag on returns. Lower costs mean more of your money is working for you, compounding over time. It's crucial to keep an eye on fees, as they can erode gains, particularly over extended periods. Investors should regularly review and compare costs, ensuring their portfolio remains cost-effective and aligned with their financial goals.

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