A balanced portfolio with high US exposure and moderate risk tolerance

Report created on Dec 21, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards equities, with the Vanguard Total Stock Market Index Fund ETF making up nearly 70%. This is complemented by a significant allocation to commodities through the Direxion Auspice Broad Commodity Strategy ETF, and a small portion in currency via the WisdomTree Bloomberg U.S. Dollar Bullish Fund. Compared to typical balanced portfolios, this composition leans more towards equities and commodities, which can provide growth but also introduce volatility. Consider reviewing the balance to ensure alignment with long-term goals and risk tolerance.

Growth Info

Historically, the portfolio has performed well, with a CAGR of 12.42%. This indicates solid growth over time, although it's important to note the maximum drawdown of -28.43%, which highlights potential volatility. Compared to benchmarks, this performance is commendable but underscores the need for risk management strategies. Regularly reviewing performance against benchmarks can provide insights into potential adjustments to maintain or improve performance.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a median return of 191.4% over the investment horizon. However, past performance doesn't guarantee future results, and the simulation shows a wide range of potential outcomes. This highlights the uncertainty inherent in investing. Consider using this projection as a guide, not a guarantee, and maintain flexibility to adjust as market conditions change.

Asset classes Info

  • Stocks
    70%
  • Cash
    26%
  • Bonds
    4%

The portfolio is concentrated in equities, with almost 70% allocated to stocks. This offers potential for growth but can also increase exposure to market volatility. The remaining allocation to commodities and currency provides some diversification but is limited. Comparing this to benchmarks, there's an opportunity to diversify further by considering other asset classes, such as bonds or alternative investments, to balance risk and return.

Sectors Info

  • Technology
    21%
  • Financials
    9%
  • Health Care
    8%
  • Consumer Discretionary
    7%
  • Industrials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    1%

Sector allocation is skewed towards technology, with over 21% of the portfolio invested in this sector. This is significantly higher than typical benchmarks and suggests a reliance on tech performance. While this can drive growth, it also introduces sector-specific risks, such as sensitivity to regulatory changes. Consider diversifying sector exposure to mitigate potential downturns in any single sector and enhance overall stability.

Regions Info

  • North America
    69%

Geographically, the portfolio is predominantly focused on North America, with over 69% exposure. This limits international diversification, which can be beneficial in reducing risk and capturing growth opportunities in other regions. Comparing this to global benchmarks, there's a notable underexposure to Europe and Asia. Exploring opportunities to increase geographic diversification could improve resilience against regional economic downturns.

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 along the Efficient Frontier, which represents the best possible risk-return ratio for a given level of risk. This involves reallocating existing assets to achieve an ideal balance. While this doesn't guarantee diversification or meet all goals, it can enhance efficiency. Consider consulting with a financial advisor to explore optimization strategies and ensure alignment with personal objectives.

Dividends Info

  • Direxion Auspice Broad Commodity Strategy ETF 3.30%
  • WisdomTree Bloomberg U.S. Dollar Bullish Fund 6.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.90%
  • Weighted yield (per year) 1.76%

The portfolio's dividend yield is 1.76%, with contributions from all three ETFs. While dividends provide a steady income stream, the yield is relatively modest. For investors seeking income, exploring higher-yielding assets could be beneficial. However, it's important to balance yield with growth potential and risk. Regularly reviewing dividend contributions can ensure they align with income needs and objectives.

Ongoing product costs Info

  • Direxion Auspice Broad Commodity Strategy ETF 0.80%
  • WisdomTree Bloomberg U.S. Dollar Bullish Fund 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.25%

The portfolio's total expense ratio (TER) is 0.25%, which is relatively low and supports better long-term returns by minimizing costs. This is a positive aspect, as high costs can erode returns over time. Continue monitoring expense ratios and consider lower-cost alternatives if possible. Keeping costs in check is a key factor in maximizing net returns and achieving investment goals.

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