Balanced portfolio with a cautious approach blending stocks, bonds, and currency exposure

Report created on Sep 18, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is structured around a core-satellite approach, allocating a significant portion to the Vanguard S&P 500 ETF and the iShares 5-10 Year Investment Grade Corporate Bond ETF. The inclusion of the Vanguard Extended Market Index Fund ETF Shares and the Invesco S&P 500® Equal Weight ETF suggests an attempt to capture the broader U.S. equity market beyond the top 500 companies. The Invesco DB US Dollar Index Bullish Fund introduces a currency play, which is less common in cautious profiles. This composition indicates a preference for familiar, large-cap U.S. equities and investment-grade bonds, supplemented by a strategic bet on the U.S. dollar.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 9.76% and a maximum drawdown of -27.26%, the portfolio has shown resilience and growth over time. The drawdown indicates the portfolio's vulnerability during market downturns, which is within expectations for its cautious profile. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing these figures with benchmarks for similar risk profiles can provide insight into the portfolio's relative performance, emphasizing the importance of understanding market timing and volatility.

Projection Info

Monte Carlo simulations, which use historical data to forecast potential future outcomes, project an annualized return of 9.83% for this portfolio. The range of outcomes from the 5th to the 67th percentile underscores the uncertainty inherent in such forecasts. While these projections are useful for setting expectations, investors should remember that past performance is not indicative of future results, and simulations cannot account for unforeseen market shifts.

Asset classes Info

  • Stocks
    60%
  • Bonds
    25%
  • Cash
    16%

The allocation across stocks (60%), bonds (25%), and cash equivalents (15%) showcases a balanced approach, leaning towards growth while maintaining a buffer against market volatility. This distribution aligns with the portfolio's cautious profile, offering a mix of growth potential through equities and stability through bonds and cash. Adjusting these allocations could further align the portfolio with the investor's risk tolerance and financial goals.

Sectors Info

  • Technology
    16%
  • Financials
    9%
  • Industrials
    7%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Telecommunications
    4%
  • Consumer Staples
    3%
  • Real Estate
    2%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The sectoral allocation demonstrates a diversified investment strategy, though with a noticeable emphasis on technology and financial services. This concentration reflects the current composition of major indices but may expose the portfolio to sector-specific risks. Diversifying further into underrepresented sectors could mitigate this risk and potentially smooth out returns over time.

Regions Info

  • North America
    59%

With 59% of assets allocated to North America, the portfolio has a significant home bias, which is common but may limit exposure to global growth opportunities. Expanding geographic diversification could reduce risk and tap into emerging markets or developed economies outside of the U.S., potentially enhancing returns.

Market capitalization Info

  • Mid-cap
    17%
  • No data
    15%
  • Mega-cap
    14%
  • Large-cap
    14%
  • Small-cap
    10%
  • Micro-cap
    4%

The mix of market capitalizations, including medium, mega, big, small, and micro, suggests a comprehensive U.S. equity strategy. However, the 'unknown' category indicates investments that may lack clarity in terms of size. Ensuring a deliberate allocation across different market caps can help manage risk and exploit opportunities in various segments of the market.

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.

Considering the Efficient Frontier, the portfolio appears well-positioned for a cautious investor, balancing risk and return effectively. However, continuous review and adjustment are crucial to maintaining this balance, especially as market conditions change. Reallocation or diversification across additional asset classes or sectors could further optimize the portfolio's performance.

Dividends Info

  • iShares 5-10 Year Investment Grade Corporate Bond ETF 4.40%
  • Invesco S&P 500® Equal Weight ETF 1.50%
  • Invesco DB US Dollar Index Bullish Fund 4.80%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Extended Market Index Fund ETF Shares 1.00%
  • Weighted yield (per year) 2.50%

The dividend yield of 2.50% contributes to the portfolio's total return, offering a steady income stream in addition to potential capital appreciation. Given the cautious profile, dividends play a crucial role in achieving a balance between growth and income. Reinvesting these dividends can compound growth over time, enhancing long-term returns.

Ongoing product costs Info

  • iShares 5-10 Year Investment Grade Corporate Bond ETF 0.04%
  • Invesco S&P 500® Equal Weight ETF 0.20%
  • Invesco DB US Dollar Index Bullish Fund 0.75%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Extended Market Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.16%

With a total expense ratio (TER) of 0.16%, the portfolio is cost-efficient, which is vital for maximizing net returns over the long term. Lower costs translate directly into higher returns for investors, making it essential to monitor and minimize investment expenses.

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