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

Report created on Jul 20, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is structured around a core of U.S. large-cap stocks, complemented by significant allocations to international, emerging market, and small-cap equities. The heavy emphasis on equity ETFs, with 100% of the portfolio allocated to stocks, indicates a growth-oriented strategy, albeit with a balanced approach given the mix of domestic, international, and emerging markets. The absence of bonds or other asset classes suggests a higher risk tolerance, relying solely on equity for growth and dividends for income.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.44%, with a maximum drawdown of -34.05%. These figures highlight the portfolio's ability to generate strong returns, though not without significant volatility. The concentration in equities, while beneficial during bull markets, can lead to substantial short-term losses during market downturns, as evidenced by the drawdown figure. This performance should be benchmarked against similar equity-focused portfolios to gauge relative success.

Projection Info

Utilizing a Monte Carlo simulation, which projects future performance based on historical data, this portfolio shows a wide range of outcomes, with a median increase of 251.4% over the simulation period. While the simulation suggests a high likelihood of positive returns, the wide range between the 5th and 67th percentiles underscores the inherent uncertainty and risk in equity investing. It's crucial to understand that these projections are hypothetical and cannot guarantee future results.

Asset classes Info

  • Stocks
    100%

The portfolio's exclusive investment in stocks across various ETFs represents a concentrated bet on equity markets globally. While this can offer significant growth opportunities, especially in buoyant market conditions, it lacks the risk mitigation typically provided by fixed-income or alternative investments. Diversification across asset classes is a fundamental principle of risk management, suggesting potential room for improvement in this portfolio's composition.

Sectors Info

  • Technology
    21%
  • Financials
    17%
  • Industrials
    12%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Consumer Staples
    8%
  • Energy
    7%
  • Telecommunications
    7%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral allocation covers a broad spectrum, with technology and financial services being notably predominant. This sectoral spread is reflective of the current global market trends, where technology, in particular, has been a significant growth driver. However, the heavy weighting towards these sectors could expose the portfolio to sector-specific risks, such as regulatory changes or economic downturns affecting these industries more severely than others.

Regions Info

  • North America
    67%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic diversification is well-represented, with two-thirds of the portfolio in North American equities and the remainder spread across developed Europe, emerging Asia, and other regions. This global exposure helps mitigate the risk of regional economic downturns but also introduces currency risk and the complexities of international investing. The allocation could benefit from a closer examination of the balance between developed and emerging markets to ensure it aligns with the investor's risk tolerance and return expectations.

Market capitalization Info

  • Large-cap
    37%
  • Mega-cap
    35%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The market capitalization breakdown shows a balanced approach, with a slight preference for big and mega-cap stocks, which tend to be more stable and less volatile than their smaller counterparts. However, the presence of medium, small, and micro-cap stocks introduces growth potential and diversification benefits, albeit with increased volatility and risk. This mix supports a balanced risk-return profile but warrants periodic review to ensure alignment with market conditions and investment objectives.

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.

Given the current asset allocation and focus on equities, optimizing this portfolio along the Efficient Frontier could involve assessing the trade-off between risk and return to find the optimal balance. While the portfolio already demonstrates strong growth potential and reasonable diversification, fine-tuning the allocation could further enhance its risk-return profile. This might include introducing non-correlated assets to reduce volatility without significantly compromising expected returns.

Dividends Info

  • Schwab U.S. Small-Cap ETF 1.50%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab Emerging Markets Equity ETF 2.60%
  • Schwab International Equity ETF 2.60%
  • Schwab U.S. Large-Cap ETF 1.20%
  • Weighted yield (per year) 2.22%

The dividend yields across the ETFs contribute to the portfolio's total yield of 2.22%, providing a steady income stream in addition to potential capital gains. This focus on dividend-paying equities is particularly beneficial in volatile or bear markets, where dividend income can offset some capital losses. However, it's important to balance the pursuit of high dividends with the overall quality and growth prospects of the underlying investments.

Ongoing product costs Info

  • Schwab U.S. Small-Cap ETF 0.04%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab Emerging Markets Equity ETF 0.11%
  • Schwab International Equity ETF 0.06%
  • Schwab U.S. Large-Cap ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) of 0.05% is impressively low, maximizing the potential for net returns. Keeping costs low is a critical component of long-term investment success, especially in a fully equity-based portfolio where transaction and management fees can erode gains. This cost efficiency is a strong aspect of the portfolio, supporting better performance over time.

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