A cautious income tilted portfolio with strong North American bias and notable sector concentration

Report created on Dec 19, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is built from just two broad ETFs, split 50 / 50 between a balanced fund and a dividend fund. That structure keeps things simple and mostly aligned with a cautious profile, but it does tilt overall exposure toward equities and Canadian dividends compared with many “classic” cautious mixes. Simplicity is useful because it’s easier to monitor and maintain, and balanced ETFs already handle a lot of internal rebalancing. Still, it can help to review whether the 50 / 50 split truly matches the intended mix of safety versus growth, especially given the added equity and dividend tilt on top of the already balanced exposure.

Growth Info

The historic compound annual growth rate (CAGR) near 10% means that, as an example, $10,000 held over ten years would have grown roughly to about $25,900, assuming that rate persisted every year. That’s strong compared with many cautious or conservative styles and suggests the mix has historically leaned more toward growth than pure capital preservation. The maximum drawdown of around –31% shows that during tough markets, the portfolio could still see sizable temporary losses. It’s important to remember that these results come from past conditions; markets change, so future returns and drawdowns can be very different from this history.

Projection Info

The Monte Carlo analysis uses many random “what if” paths based on historical patterns to estimate future ranges. With 1,000 simulations and a 5th percentile outcome around 58.9% of initial value, even the weaker paths mostly stayed above complete capital loss, while the median path more than doubles the initial amount. An overall simulated annualized return a bit above 10% is encouraging but not guaranteed. Monte Carlo models rely heavily on past volatility and return behaviour; if future markets are calmer or rougher than the past period, real results can be better or worse. Treat these outputs as rough guideposts, not promises.

Asset classes Info

  • Stocks
    57%
  • Bonds
    19%
  • US Equity
    14%
  • Cash
    1%

Across asset classes, the portfolio holds about 57% equity, 19% bonds, 14% classified as US equity, plus a small cash position. For a cautious risk score of 3 out of 7, this is relatively equity-heavy, which explains both the strong returns and the significant historical drawdown. The moderate diversification score of 3 out of 5 reflects that there is a mix of stocks, bonds, and a bit of cash, which is good, but the balance is still tilted toward growth assets. Anyone wanting milder ups and downs might dial in more defensive exposure, while a longer horizon can justify this growth-leaning structure.

Sectors Info

  • Financials
    35%
  • Energy
    16%
  • Technology
    12%
  • Consumer Discretionary
    10%
  • Utilities
    7%
  • Industrials
    6%
  • Health Care
    4%
  • Basic Materials
    4%
  • Telecommunications
    4%
  • Consumer Staples
    2%
  • Real Estate
    1%

Sector exposure is where this portfolio really shows a strong tilt: financial services at 35% and energy at 16% together dominate just over half of the equity slice. Technology, consumer cyclicals, and utilities make up a lot of the rest, with smaller allocations to healthcare, materials, communications, and defensive areas. This pattern is very typical of Canadian equity and dividend strategies and aligns with common benchmarks in Canada, which is a positive sign of familiarity. However, it also means the portfolio will react strongly to interest rate moves, bank earnings, and commodity cycles, so swings can align with those themes.

Regions Info

  • North America
    85%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

Geographically, about 85% is in North America, with Canada very prominent, and only modest allocations to Europe, Japan, and other developed and emerging regions. This home bias is extremely common for Canadian investors and means results will be highly linked to North American economic and currency conditions. The alignment with typical North American benchmarks is reassuring and makes performance easier to compare. At the same time, overseas markets can behave differently at various points in the cycle, sometimes softening local shocks. Adding more non‑North‑American exposure can smooth the ride, but it also introduces currency moves and different political and regulatory risks.

Market capitalization Info

  • Large-cap
    33%
  • Mega-cap
    27%
  • Mid-cap
    18%
  • Small-cap
    2%

By market capitalization, the portfolio is dominated by large companies: roughly 33% big cap and 27% mega cap, plus a solid 18% in mid cap and very little in small cap. Large and mega cap stocks tend to be more stable, widely followed, and often pay reliable dividends, all of which fit well with a cautious, income-aware style. The relatively small tilt toward smaller companies limits both potential extra growth and the extra volatility that often comes with it. This size mix is well-balanced and lines up closely with many broad market benchmarks, which supports smoother long‑term compounding.

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.

On a risk‑return chart called the Efficient Frontier, each mix of the two existing ETFs would sit at a different point, from more conservative to more aggressive. “Efficiency” here simply means getting the most expected return for a given level of volatility, without adding new products. Because the current 50 / 50 split leans more toward equities than some cautious blends, a slightly higher share of the balanced ETF could move the portfolio closer to the lower‑risk part of that curve. On the other hand, accepting the current volatility may be reasonable if the priority is maintaining growth and dividend tilt.

Dividends Info

  • iShares Core Balanced ETF Portfolio 1.40%
  • iShares Core MSCI Canadian Quality Dividend Index ETF 1.90%
  • Weighted yield (per year) 1.65%

The overall dividend yield of about 1.65% combines the 1.4% from the balanced ETF and 1.9% from the Canadian dividend ETF. That’s a modest but steady income stream, fitting for a cautious profile that still wants some cash flow without reaching into very high‑yield or concentrated bets. Dividends can be especially attractive for investors funding part of their spending from their portfolio or who like the psychological comfort of regular cash payouts. It’s worth keeping in mind that focusing on yield alone can increase sector concentration, as seen in the heavy financial and energy exposure, so balancing income with diversification is key.

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