Balanced and globally diversified portfolio with a strong focus on stocks

Report created on May 29, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio primarily consists of two ETFs that together offer a comprehensive exposure to global stock markets. With 70% allocated to a U.S. total stock market index and 30% to an international stock index, it demonstrates a strong inclination towards equity investments. This composition aligns with a balanced risk profile, aiming to capitalize on the growth potential of equities while maintaining a level of geographical diversification to mitigate risks associated with market volatility.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 11.35%, with a maximum drawdown of -34.61%. These figures suggest a resilient performance across various market conditions, highlighting the portfolio's ability to recover from downturns. However, it's essential to remember that past performance is not indicative of future results, and investors should consider their risk tolerance and investment horizon when evaluating such data.

Projection Info

A Monte Carlo simulation, which runs a multitude of scenarios to predict future outcomes, suggests a median annualized return of 10.43%. This projection, while based on historical data, provides a range of potential future outcomes, emphasizing the uncertainty inherent in investing. It's a useful tool for setting realistic expectations and preparing for various market environments.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

With 99% of the portfolio invested in stocks and only a minimal cash holding, the portfolio is positioned for growth. This asset class allocation is typical for investors with a medium to long-term horizon who can tolerate short-term market fluctuations in exchange for higher potential returns over time. However, the absence of bonds or alternative investments may limit opportunities for risk mitigation during stock market declines.

Sectors Info

  • Technology
    24%
  • Financials
    17%
  • Industrials
    11%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

The sector allocation shows a significant weighting towards technology, financial services, and industrials, which could drive growth but also expose the portfolio to sector-specific risks. A balanced approach across diverse sectors can help mitigate these risks while capturing growth opportunities in different areas of the economy.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, with meaningful exposure to developed Europe and emerging Asian markets. This distribution offers a blend of stability from developed markets and growth potential from emerging economies. However, investors might consider increasing exposure to underrepresented regions for enhanced global diversification.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's emphasis on mega and big-cap stocks suggests a preference for established, large companies known for their stability and potential for steady growth. While this can be a safer bet during turbulent times, incorporating a broader mix of medium, small, and micro-cap stocks could introduce higher growth potential, albeit with increased volatility.

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 current asset allocation appears well-suited for a balanced risk-return profile, but there's always room for optimization. Using the Efficient Frontier could identify a mix of assets that achieves the highest expected return for a given level of risk. This process, however, relies on historical data and assumptions that may not predict future performance accurately.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.78%

The portfolio's average dividend yield of 1.78% contributes to its total return, providing a steady income stream in addition to potential capital gains. This yield is a critical component for investors looking for regular income or reinvestment opportunities to compound growth over time.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With an average total expense ratio (TER) of 0.04%, the portfolio benefits from low costs, which is crucial for long-term investment success. Lower costs mean more of the portfolio's returns are kept by the investor, a key factor in accumulating wealth over time.

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