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

Report created on Apr 15, 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 composed of 80% Vanguard Total World Stock Index Fund ETF, 10% Invesco NASDAQ 100 ETF, and 10% split between British American Tobacco and Philip Morris International common stocks. This structure leans heavily towards global equities, providing broad market exposure. Compared to typical balanced portfolios, this one has a higher allocation to equities, which can enhance growth potential but may increase volatility. For more stability, consider adding bonds or other fixed-income assets to balance risk and reward.

Growth Info

Historically, the portfolio has achieved a CAGR of 11.04%, indicating strong growth over time. The max drawdown of -24.87% suggests susceptibility to market downturns, which is typical for equity-heavy portfolios. Compared to benchmarks, the performance is commendable, but the drawdown highlights potential volatility. To mitigate this, consider incorporating assets with lower volatility, such as bonds, to cushion against future downturns while maintaining growth.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show an annualized return of 16.10% with a high probability of positive returns. However, these projections are based on past data and may not reflect future market conditions. The simulations suggest potential for significant growth, but it's essential to remember that projections can vary widely. Regularly reviewing and adjusting the portfolio based on changing market conditions can help align with desired outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, making up 99% of the allocation, with a minimal 1% in cash. This concentration in equities provides potential for higher returns but also increases exposure to market fluctuations. A more balanced allocation including bonds or alternative investments could provide diversification benefits and reduce overall risk. Consider diversifying into additional asset classes to create a more resilient portfolio.

Sectors Info

  • Technology
    25%
  • Consumer Staples
    15%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation is tech-heavy at 25%, followed by consumer defensive and financial services. This concentration in technology can lead to higher volatility, especially during interest rate changes. However, the presence of consumer defensive stocks provides some stability. To further balance risk, consider diversifying into underrepresented sectors like utilities or real estate, which can offer more consistent returns during economic downturns.

Regions Info

  • North America
    68%
  • Europe Developed
    17%
  • Asia Emerging
    5%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic exposure is predominantly North American at 68%, with less emphasis on emerging markets. While the focus on developed markets provides stability, it limits exposure to potentially high-growth regions like Asia and Latin America. Expanding geographic diversification could enhance growth potential and reduce reliance on any single market. Consider increasing allocations to emerging markets to capture broader global opportunities.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    33%
  • Mid-cap
    16%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio is skewed towards large-cap stocks, with 44% in mega caps and 33% in big caps. This focus on larger companies provides stability and lower volatility but may limit growth potential compared to small and mid-cap stocks. Diversifying across market capitalizations can enhance returns while managing risk. Consider increasing exposure to smaller companies to capture growth opportunities that larger firms might not offer.

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 be optimized for a better risk-return profile using the Efficient Frontier, which suggests a potential return of 20.01% at the same risk level. The Efficient Frontier identifies the best possible risk-return ratio by adjusting the allocation of current assets. While optimizing can enhance returns, it's crucial to consider personal risk tolerance and investment goals. Regularly reviewing and adjusting the portfolio can help achieve optimal efficiency.

Dividends Info

  • British American Tobacco p.l.c. 5.30%
  • Philip Morris International Inc 3.40%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.00%
  • Weighted yield (per year) 2.10%

With a total dividend yield of 2.10%, the portfolio provides a moderate income stream, primarily from British American Tobacco and Philip Morris International. Dividends can offer stability and regular income, which is beneficial for investors seeking cash flow. However, the yield is modest compared to more income-focused portfolios. Consider increasing exposure to high-dividend stocks or funds if income generation is a priority.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, supporting better long-term performance by minimizing cost drag on returns. Low costs are advantageous as they enhance net returns over time. Maintaining this cost efficiency is beneficial, but it's also important to ensure that low costs do not compromise the quality or diversification of investments. Regularly reviewing fund expenses can help sustain cost-effectiveness.

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