Balanced Diverse Portfolio with Strong Growth Potential and Efficient Risk Management for Moderate Investors

Report created on Aug 11, 2024

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 five ETFs with a focus on large-cap U.S. equities, international stocks, semiconductors, gold, and real estate. This diversified mix covers various asset classes and sectors, providing a balanced approach to investing. The allocation leans heavily towards the Vanguard S&P 500 ETF, which makes up 60% of the portfolio, ensuring a strong foundation in the U.S. market. This composition is suitable for investors seeking growth while managing risk through diversification across different sectors and regions.

Growth Info

Historically, the portfolio has demonstrated strong performance, with a compound annual growth rate (CAGR) of 13.43%. This impressive growth rate indicates that the portfolio has effectively capitalized on market opportunities. However, it experienced a maximum drawdown of -32.55%, reflecting its susceptibility to market volatility. The portfolio's performance is driven by key days, with 90% of returns occurring over just 35 days. This highlights the importance of maintaining a long-term investment perspective to capture these pivotal growth periods.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was analyzed. This method provides a range of possible outcomes by simulating random variables. The results show a median projected return of 410.89%, with 982 simulations yielding positive returns. The analysis indicates a potential annualized return of 14.64%, suggesting continued growth. However, the projections also reveal a 5th percentile return of 35.77%, underscoring the importance of being prepared for varied outcomes. This forward-looking assessment reinforces the portfolio's growth potential.

Asset classes Info

  • Stocks
    90%
  • Other
    5%
  • Real Estate
    5%

The portfolio's asset class allocation is predominantly in stocks, with 89.65% invested in equities. This high exposure to stocks aligns with the portfolio's growth objectives but also introduces higher volatility. The remaining allocation includes 5% in real estate and 5% in gold, providing some diversification benefits. The inclusion of these asset classes can help mitigate risk and enhance returns. To maintain a balanced risk profile, consider periodically reviewing the asset allocation to ensure alignment with investment goals and risk tolerance.

Sectors Info

  • Technology
    32%
  • Financials
    12%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Real Estate
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%

The portfolio is well-diversified across sectors, with a significant allocation to technology at 32.41%. Other notable sectors include financial services, healthcare, and consumer cyclicals. This sector allocation provides exposure to various economic drivers, enhancing the portfolio's resilience to sector-specific risks. However, the concentration in technology could increase vulnerability to sector volatility. To optimize sector diversification, regularly assess sector performance and consider rebalancing if necessary. This approach can help maintain a balanced exposure to different economic cycles.

Regions Info

  • North America
    74%
  • Europe Developed
    9%
  • Asia Developed
    3%
  • Asia Emerging
    3%
  • Japan
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, with 74.24% allocated to the region. This focus on the U.S. market provides stability and growth potential but may limit exposure to emerging markets' opportunities. The remaining allocation covers Europe, Asia, and other regions, offering some international diversification. To enhance geographic diversification, consider monitoring global market trends and adjusting allocations as needed. This strategy can help capture growth opportunities in diverse markets while managing regional risks.

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 optimization chart suggests that there is room for improvement in terms of efficiency. By moving along the efficient frontier, the portfolio could potentially achieve a higher expected return of 18.56% with the same risk level. However, this optimization requires careful consideration of risk appetite and investment goals. For those seeking a riskier portfolio, increasing exposure to high-growth assets may be beneficial. Conversely, a more conservative approach could involve reallocating towards lower-risk assets. Exploring these options can help tailor the portfolio to better meet financial objectives.

Dividends Info

  • VanEck Semiconductor ETF 0.40%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.55%

The portfolio offers a moderate dividend yield of 1.55%, providing some income alongside capital appreciation. The Vanguard Real Estate Index Fund ETF Shares contribute significantly to this yield with a 3.8% dividend, while the Vanguard Total International Stock Index Fund ETF Shares add a 3.0% yield. Dividends can offer a steady income stream and cushion against market volatility. For investors seeking higher income, consider exploring options to enhance the portfolio's dividend yield while maintaining its growth potential.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • VanEck Semiconductor ETF 0.35%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

The portfolio's costs are relatively low, with a total expense ratio (TER) of 0.1%. This low-cost structure is primarily due to the Vanguard S&P 500 ETF's minimal expense of 0.03%. Keeping investment costs low is crucial for maximizing returns over the long term. The VanEck Semiconductor ETF and SPDR® Gold Shares have higher expense ratios, but their allocation is limited. To maintain cost efficiency, regularly review the expense ratios of the portfolio's holdings and consider cost-effective alternatives if necessary.

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.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey