A broadly diversified portfolio with balanced risk and a focus on global equities

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of the Vanguard Total World Stock Index Fund ETF Shares, which constitutes 90% of the holdings. This ETF provides extensive global equity exposure. The remaining 10% is allocated equally between Berkshire Hathaway Inc and JPMorgan Chase & Co, both established U.S. companies. This composition aligns well with a balanced risk profile, offering diversification across sectors and geographies. However, with 99% in stocks and only 1% in cash, the portfolio is heavily equity-focused. Diversifying into other asset classes like bonds or real estate might enhance stability during market volatility.

Growth Info

The portfolio has demonstrated strong historic performance with a CAGR of 9.57%, indicating robust average annual growth over time. However, it experienced a significant maximum drawdown of -34.61%, highlighting potential vulnerability during market downturns. Comparing this to benchmarks, the performance aligns with typical equity-heavy portfolios. While past performance can provide insights, it doesn't guarantee future results. To mitigate future drawdowns, consider diversifying into less volatile asset classes or implementing risk management strategies.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, indicates a wide range of potential returns. The 50th percentile projects a 429.7% increase, while the 5th percentile suggests a more modest 35.9% gain. Although 982 out of 1,000 simulations yielded positive returns, it's crucial to remember that simulations are based on past data and assumptions, which may not hold true in the future. Regularly reviewing the portfolio and adjusting allocations as needed can help align with changing market conditions and personal goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

With 99% of the portfolio in stocks, it is heavily weighted towards equities, offering potential for high returns but also higher volatility. This allocation is typical for growth-focused portfolios but may not provide sufficient diversification. A more balanced approach could include bonds or alternative investments to mitigate risk. Comparing to benchmarks, such a high equity allocation might be aggressive for some investors, especially those nearing retirement. Adjusting the mix to include fixed-income securities could provide more stability and income.

Sectors Info

  • Financials
    25%
  • Technology
    22%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The portfolio's sector allocation is diverse, with a notable 25% in financial services and 22% in technology. Such concentration can lead to higher volatility, especially during sector-specific downturns. While financials and tech have been strong performers, a balanced sector allocation is key to managing risk. Compared to benchmarks, this portfolio leans heavily on these sectors, which could be a double-edged sword. A more even distribution across sectors, including defensive ones like consumer staples or utilities, might offer better risk-adjusted returns.

Regions Info

  • North America
    70%
  • Europe Developed
    13%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America, making up 70% of the allocation. While this aligns with many global equity benchmarks, it may limit exposure to growth opportunities in emerging markets. The remaining allocations are spread across Europe, Asia, and other regions, providing some diversification. However, increasing exposure to underrepresented areas like Latin America or Africa could enhance diversification and potentially capture higher growth rates. Balancing geographic exposure can help mitigate risks associated with regional economic downturns.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization distribution is skewed towards mega and big-cap stocks, which together comprise 76% of the holdings. This focus on large companies provides stability and lower volatility compared to smaller caps. However, it may limit growth potential found in medium, small, and micro-cap stocks, which are only 23% of the allocation. A more balanced approach, increasing exposure to smaller companies, could enhance growth prospects and diversification. This strategy might align better with investors seeking higher returns over a longer horizon.

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 could potentially be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio. Currently, the portfolio's expected return is slightly below the optimal level. By adjusting the allocations, such as increasing exposure to assets with better risk-adjusted returns, the portfolio could achieve a higher expected return of 16.07%. This optimization focuses solely on the current asset mix and does not imply diversification improvements. Regular reviews and adjustments can ensure the portfolio remains aligned with the investor's risk tolerance and goals.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 2.06%

The portfolio's dividend yield is 2.06%, mainly driven by the Vanguard ETF and JPMorgan Chase. Dividends provide a steady income stream, which can be reinvested or used for other purposes. For growth-focused portfolios, dividends can offer a buffer during market downturns. However, the yield is modest compared to high-dividend strategies. Investors seeking income might consider increasing exposure to dividend-focused assets. Balancing growth and income can enhance total returns and provide stability, especially for those nearing retirement or requiring regular cash flow.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from low costs, with the Vanguard ETF's total expense ratio at just 0.07%. Keeping costs low is crucial for enhancing long-term returns, as high fees can erode gains over time. In comparison to industry averages, this portfolio is cost-efficient, which is a positive aspect. However, it's essential to regularly review and ensure that low costs do not compromise the quality of investments. Maintaining this cost efficiency while optimizing returns can significantly impact the portfolio's performance over the years.

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