A balanced and highly diversified portfolio with strong emphasis on stocks and global exposure

Report created on Apr 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio predominantly consists of equities, with a 70% allocation to U.S. stocks and a 20% allocation to international stocks, complemented by a 10% investment in bonds. Such a structure is indicative of a balanced approach, aiming to harness growth from the stock market while using bonds to mitigate volatility. The allocation closely mirrors a classic balanced portfolio, which typically maintains a substantial but not overwhelming exposure to equities.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.28%, with a maximum drawdown of -32.20%. These figures suggest a resilient performance across market cycles, with the ability to recover from downturns. However, the significant drawdown indicates potential vulnerability to market volatility. It's important to remember that past performance is not a reliable indicator of future results, but these historical metrics can provide insight into the portfolio's risk and return profile.

Projection Info

Utilizing Monte Carlo simulations—statistical techniques that forecast potential outcomes by varying random variables—this portfolio's future performance has been projected. The simulations suggest a wide range of outcomes, with a median increase of 125.9%. While optimistic, it's crucial to acknowledge the inherent uncertainty in such predictions. They rely on historical data, which may not fully capture future market conditions.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The asset class distribution, with 89% in stocks and 10% in bonds, aligns with the portfolio's balanced risk profile. This mix is geared towards investors seeking growth while maintaining a cushion against volatility. The minimal cash holding ensures that the portfolio is fully invested, which is suitable for long-term growth objectives.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The sector allocation is well-diversified, with technology, financial services, and consumer cyclicals leading. This distribution reflects a growth-oriented strategy, as these sectors often outperform during economic expansions. However, the heavy weighting in technology could expose the portfolio to sector-specific risks, such as regulatory changes or rapid shifts in consumer preferences.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily skewed towards North America (71%), with modest exposure to developed Europe and emerging Asian markets. This concentration in developed markets, particularly the U.S., may limit exposure to potential growth in emerging markets. Diversifying geographically could reduce risk and tap into growth opportunities outside of the U.S.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    27%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a preference for larger companies, with 65% in mega and big caps. This bias towards larger firms can provide stability but might limit the portfolio's growth potential compared to more aggressive allocations that include a higher proportion of small and micro-cap stocks.

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, which aims to maximize returns for a given level of risk, this portfolio appears well-positioned. However, there's always room for optimization, such as adjusting the equity-to-bond ratio or diversifying further into emerging markets or alternative asset classes to enhance risk-adjusted returns.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.97%

Dividend yields contribute to the portfolio's total return, with the bond component offering a 3.70% yield, significantly enhancing income generation. The overall yield of 1.97% combines growth and income, making the portfolio suitable for investors seeking a mix of capital appreciation and income.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • 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) 0.03%

With an average Total Expense Ratio (TER) of 0.03%, the portfolio is cost-efficient, minimizing the drag on returns due to fees. Lower costs are crucial for long-term investment success, as they compound over time, leaving more in the investor's pocket.

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