A strategically diversified ETF portfolio with a cautious risk profile and high dividend focus

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio suits an investor with a cautious approach to risk, prioritizing a balance between income generation and capital appreciation. It's designed for those with a medium to long-term investment horizon, who appreciate the stability provided by diversified investments across sectors and geographies but are also looking to participate in equity market growth. The emphasis on dividend-yielding ETFs appeals to individuals seeking regular income streams, making it ideal for those nearing retirement or with a preference for income over high-risk growth strategies.

Positions

  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    25.00%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF
    JAAA - US47103U8457
    20.00%
  • American Century ETF Trust
    AVGV - US0250722164
    15.00%
  • Global X Funds
    SHLD - US37960A5294
    15.00%
  • Vanguard International High Dividend Yield Index Fund ETF Shares
    VYMI - US9219467944
    15.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    10.00%

The portfolio is strategically composed of six ETFs spanning various sectors and geographies, with a 25% allocation to a momentum ETF, indicating a tilt towards stocks showing upward price trends. This is complemented by significant investments in CLO, international high dividend, U.S. dividend equity, and other sector-specific ETFs. Such a mix not only diversifies across asset classes, with an 80% stock and 20% bond split, but also across market capitalizations and regions, showcasing a well-thought-out approach to achieving diversification within a cautious risk framework.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 23.43% and a maximum drawdown of -10.30%, the portfolio has demonstrated robust performance. The days contributing most to returns highlight the impact of significant market movements on the portfolio's gains. While past performance is impressive, it's crucial to remember that it doesn't guarantee future results. The portfolio's ability to limit losses during downturns, as indicated by the maximum drawdown, aligns well with its cautious risk profile.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes, with the median simulation suggesting substantial growth. While these simulations provide valuable insights, they are based on past market behavior and cannot predict future market movements with certainty. Investors should consider these projections as one of many tools in making informed decisions, keeping in mind their investment horizon and risk tolerance.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The portfolio's asset allocation is heavily weighted towards stocks (80%), with a 20% allocation in bonds, offering a balanced approach to growth and income. This allocation is in line with the portfolio's cautious risk classification, aiming to capture the growth potential of equities while using bonds to mitigate volatility. Periodic reassessment of this allocation is recommended to ensure it continues to meet the investor's risk tolerance and financial goals.

Sectors Info

  • Industrials
    20%
  • Financials
    15%
  • Technology
    15%
  • Telecommunications
    6%
  • Consumer Discretionary
    6%
  • Consumer Staples
    5%
  • Energy
    5%
  • Health Care
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation is broad, covering industrials, financial services, technology, and several others, which helps in spreading risk and taking advantage of growth in different areas of the economy. However, the concentration in industrials, financial services, and technology suggests a focus on sectors that can exhibit volatility. Balancing sector exposure can further align the portfolio with a cautious investment strategy, potentially reducing risk while still targeting growth.

Regions Info

  • North America
    55%
  • Europe Developed
    13%
  • Japan
    3%
  • Asia Developed
    3%
  • Asia Emerging
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic allocation shows a strong preference for North American assets, complemented by exposure to developed Europe, Japan, and emerging markets. This geographical spread supports risk mitigation by diversifying across economies with different growth drivers. However, the portfolio may benefit from increased exposure to emerging markets and other developed regions to capitalize on global economic shifts and reduce dependency on North American market performance.

Market capitalization Info

  • Large-cap
    33%
  • Mega-cap
    23%
  • Mid-cap
    16%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown indicates a diversified approach, with allocations to mega, big, medium, small, and micro-cap stocks. This variety can help buffer against market volatility since different cap-sizes respond differently to economic changes. Yet, the emphasis on bigger companies, while safer, may limit potential returns from high-growth small and micro-caps. A slight adjustment towards smaller caps could offer higher growth potential, aligning with the portfolio's cautious yet growth-oriented strategy.

Dividends Info

  • American Century ETF Trust 2.00%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 5.50%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Global X Funds 0.20%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 3.80%
  • Weighted yield (per year) 2.52%

The portfolio's dividend yield stands at 2.52%, highlighting its focus on generating income alongside capital appreciation. This is particularly beneficial for cautious investors seeking steady returns. However, it's essential to balance the pursuit of high dividends with the overall health and growth prospects of the underlying investments, ensuring that dividend payouts do not come at the expense of long-term capital growth.

Ongoing product costs Info

  • American Century ETF Trust 0.26%
  • Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 0.21%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Global X Funds 0.50%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
  • Weighted costs total (per year) 0.23%

With a total expense ratio (TER) of 0.23%, the portfolio is efficiently managed in terms of costs, which is crucial for enhancing long-term returns. Lower costs mean more of the investment's return is kept by the investor. Continuously monitoring these costs and comparing them to similar investment options can ensure that the portfolio remains cost-effective, maximizing the investor's returns.

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.

The portfolio's current configuration is closely aligned with the Efficient Frontier, indicating an optimal risk-return balance given its asset allocation. However, the suggestion that an even more efficient portfolio could achieve a 7.75% expected return at a similar risk level prompts consideration of potential adjustments. This could involve rebalancing asset classes or reallocating within sectors to further refine the portfolio's efficiency, enhancing potential returns without significantly increasing risk.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.