Balanced portfolio with a focus on large-cap growth and value and emerging markets exposure

Report created on Jan 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 composed of five ETFs, with a balanced allocation between growth and value-focused funds. The Vanguard Mega Cap Value and Russell 1000 Growth ETFs each hold 25%, while the FTSE Developed and Emerging Markets ETFs each account for 20%. The Mid-Cap Value ETF rounds out the portfolio at 10%. This composition shows a robust mix of large-cap equities and international exposure. Compared to typical balanced portfolios, this setup leans slightly towards equities, which can drive growth but may increase volatility. Consider increasing cash or bond exposure for added stability.

Growth Info

Historically, this portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 10.86%, indicating significant growth potential. However, it also experienced a maximum drawdown of -33.94%, highlighting periods of volatility. Compared to benchmarks, such performance suggests a good balance between risk and reward, typical of a balanced risk profile. While past performance is not a guarantee of future results, maintaining a diversified approach can help manage future risks and capitalize on growth opportunities.

Projection Info

Using Monte Carlo simulations, this portfolio shows a range of potential outcomes, with a median return projection of 259.97%. These simulations use historical data to estimate future performance, offering a glimpse into potential risks and rewards. However, it's important to note that these are not predictions but rather possibilities based on past trends. To better prepare for future market conditions, regularly review and adjust your portfolio to align with your goals and risk tolerance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99.1% in equities, leaving minimal allocation to cash or other asset classes. While stocks can offer high returns, they also come with higher volatility. Compared to balanced benchmarks, this allocation is more aggressive. To enhance diversification and reduce risk, consider including more fixed-income assets or alternatives. This could help provide stability and potential income during market downturns.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    11%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    3%

The sector allocation is well-diversified, with notable exposure to technology (22.5%) and financial services (18.3%). While these sectors can drive growth, they may also introduce volatility, especially in changing economic conditions. Compared to common benchmarks, this sector mix is relatively balanced. To mitigate sector-specific risks, ensure regular reviews and consider rebalancing if any sector becomes overly dominant.

Regions Info

  • North America
    62%
  • Asia Emerging
    12%
  • Europe Developed
    11%
  • Asia Developed
    5%
  • Japan
    4%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%

The portfolio's geographic allocation is predominantly North American (61.9%), with significant exposure to Asia Emerging (11.8%) and Europe Developed (10.9%). This geographic mix aligns with global benchmarks, providing a good balance between developed and emerging markets. However, the lower exposure to regions like Latin America and Africa may limit diversification benefits. Consider increasing allocations to underrepresented areas to capture potential growth opportunities.

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 can potentially be optimized using the Efficient Frontier, which focuses on achieving the best risk-return ratio with the current assets. This involves adjusting allocations to maximize returns for a given level of risk. While this optimization doesn't ensure diversification or other goals, it can enhance performance. Consider consulting with a financial advisor to explore optimization strategies that align with your objectives.

Dividends Info

  • Vanguard Mega Cap Value Index Fund ETF Shares 2.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 1.50%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.40%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.82%

The portfolio's overall dividend yield is 1.82%, with the highest contributions from the Emerging Markets ETF at 3.2%. Dividends can provide a steady income stream, which is beneficial for reinvesting or supplementing cash flow. For investors seeking income, consider increasing allocations to higher-yielding assets. However, balance is key, as high yields may come with increased risk.

Ongoing product costs Info

  • Vanguard Mega Cap Value Index Fund ETF Shares 0.07%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, supporting better long-term returns by minimizing costs. This is below average for similar portfolios, indicating efficient cost management. Keeping costs low is crucial for maximizing net returns over time. Continue to monitor and evaluate the cost-effectiveness of your investments, ensuring they align with your performance and risk objectives.

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