Balanced Portfolio with Strong Diversification and Moderate Risk Suitable for Long-Term Growth

Report created on Jul 27, 2024

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 four ETFs, with a significant portion allocated to the Vanguard S&P 500 ETF at 40%, followed by the Schwab U.S. Dividend Equity ETF and the Vanguard Total International Stock Index Fund ETF Shares, each at 25%. The Invesco NASDAQ 100 ETF holds the remaining 10%. This diversified mix offers exposure to both domestic and international markets, enhancing potential growth while spreading risk. Maintaining a balanced allocation helps mitigate market volatility, providing stability. Consider monitoring the allocation to ensure it aligns with your evolving financial goals and risk tolerance.

Growth Info

Historically, this portfolio has performed well, with a compound annual growth rate (CAGR) of 13.36%. It has experienced a maximum drawdown of -23.79%, indicating exposure to market fluctuations. The days that make up 90% of returns are limited to 20, suggesting concentrated periods of gains. This performance highlights the potential for high returns, albeit with some volatility. Regularly reviewing historical performance helps in understanding the risk-return profile and setting realistic expectations. Consider maintaining a diversified approach to continue leveraging market opportunities while managing downside risk.

Projection Info

A Monte Carlo simulation, using 1,000 simulations, projects future performance with a hypothetical initial investment. The median outcome suggests a potential return of 461.69%, while the 5th percentile indicates a 93.67% return. This simulation offers insight into possible future outcomes and variability. Understanding these projections helps in setting long-term expectations and preparing for different market scenarios. Consider using these insights to adjust your investment strategy, ensuring it remains aligned with your risk tolerance and financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, comprising 99.56% of the total allocation, with minimal exposure to cash and other asset classes. This stock-centric focus suggests a growth-oriented strategy, capitalizing on equity market returns. While this can drive significant gains, it also exposes the portfolio to equity market volatility. Diversifying into other asset classes, such as bonds, could help reduce risk and provide more stable returns. Consider evaluating your risk appetite and exploring additional asset classes to enhance portfolio resilience.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Consumer Staples
    8%
  • Telecommunications
    8%
  • Energy
    6%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is well-diversified, with significant exposure to technology, financial services, and healthcare sectors. Technology leads with 24.23%, followed by financial services at 15.39% and healthcare at 11.03%. This sector spread offers a balance between growth and stability. However, overexposure to a single sector can increase risk. Regularly reviewing sector allocations ensures alignment with market trends and personal investment goals. Consider rebalancing periodically to maintain diversification and capitalize on sector-specific opportunities.

Regions Info

  • North America
    76%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly focused on North America, accounting for 76.30% of the allocation. There is moderate exposure to Europe Developed and Asia Emerging. This geographic spread provides a strong base in stable, developed markets while offering growth potential in emerging regions. However, the heavy North American focus may limit benefits from global diversification. Consider expanding exposure to underrepresented regions to capture diverse growth opportunities and mitigate regional risks.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Vanguard S&P 500 ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the Invesco NASDAQ 100 ETF and Vanguard S&P 500 ETF. This correlation suggests that these assets tend to move in similar directions, which may reduce diversification benefits. Understanding asset correlations is crucial for managing risk and enhancing returns. To optimize the portfolio, consider reducing overlap between correlated assets and diversifying into less correlated options, thereby improving resilience against market shifts.

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.

Before optimizing, focus on reducing overlap between highly correlated assets, such as the Invesco NASDAQ 100 ETF and Vanguard S&P 500 ETF, to enhance diversification. Consider moving along the efficient frontier to adjust risk levels: increasing bond allocation for a more conservative stance or adding equities for higher risk and potential returns. Prioritize maintaining a diversified approach to optimize the portfolio's risk-return profile. Regular reviews and adjustments based on market conditions and personal goals ensure continued alignment with financial objectives.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.14%

The portfolio offers a total dividend yield of 2.14%, with the Schwab U.S. Dividend Equity ETF providing the highest yield at 3.4%. This income component can enhance overall returns and provide a buffer during market downturns. Dividends are a reliable source of passive income, contributing to the portfolio's long-term growth. To maximize income potential, consider reinvesting dividends and maintaining a balanced approach to dividend and growth-focused investments.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is low at 0.06%, with individual ETF costs ranging from 0.03% to 0.15%. Low costs are crucial for maximizing net returns over time, as they minimize the drag on performance. Keeping investment costs low is a fundamental principle for enhancing portfolio efficiency. Regularly reviewing and comparing expense ratios ensures that the portfolio remains cost-effective. Consider maintaining a focus on low-cost investments to maximize returns.

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