Balanced portfolio with a strong focus on US equities and low costs

Report created on Aug 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards US equities, with a significant concentration in the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares, comprising 90% of the total allocation. The remaining 10% is invested in the American Century ETF Trust. This composition reflects a focus on broad market exposure, primarily to large-cap stocks, with a moderate level of diversification across sectors.

Growth Info

Historically, the portfolio has demonstrated robust growth with a Compound Annual Growth Rate (CAGR) of 19.78%. This performance is notable, considering the max drawdown was -18.12%, indicating resilience during market downturns. The days contributing most to returns were relatively few, underscoring the importance of staying invested over the long term to capture significant growth spurts.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. While past performance doesn't guarantee future results, the simulations suggest potential for substantial growth, with the median outcome indicating a 1,249.0% increase. However, it's crucial to remember that such projections are speculative and subject to market volatility.

Asset classes Info

  • Stocks
    100%

The portfolio is exclusively invested in stocks, with no allocation to bonds, cash, or other asset classes. This singular focus enhances potential returns but also increases volatility and risk. Diversifying across different asset classes could provide a buffer against stock market fluctuations, potentially leading to a smoother investment journey.

Sectors Info

  • Technology
    30%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    9%
  • Industrials
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is concentrated in technology, financial services, and consumer cyclicals, which are sectors known for their growth potential. However, this concentration also exposes the portfolio to sector-specific risks. Balancing across a wider range of sectors could mitigate this risk while still allowing for significant growth opportunities.

Regions Info

  • North America
    90%
  • Europe Developed
    4%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily weighted towards North America, with minimal exposure to international markets. While this has likely benefited the portfolio in recent years, increasing global diversification could reduce risk and tap into growth opportunities in emerging and developed markets outside the US.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    33%
  • Mid-cap
    19%
  • Small-cap
    3%
  • Micro-cap
    1%

The focus on mega and large-cap stocks provides a foundation of stability and potential for growth. However, the limited exposure to small and micro-cap stocks means the portfolio may miss out on the higher growth potential these companies can offer. A more balanced market cap allocation could enhance returns while managing risk.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates a redundancy in exposure that doesn't contribute to diversification. Reducing overlap by reallocating assets could improve the portfolio's risk-adjusted returns without sacrificing growth potential.

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's current allocation suggests room for optimization, particularly by addressing the overlap between the Vanguard ETFs. Utilizing the Efficient Frontier concept could identify an allocation that offers the highest expected return for a given level of risk, potentially enhancing the portfolio's performance.

Dividends Info

  • American Century ETF Trust 3.00%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.38%

The portfolio's dividend yield of 1.38% contributes to total returns, providing a steady income stream. While not the primary focus, dividends can offer a cushion during market downturns and contribute to compounding growth over time.

Ongoing product costs Info

  • American Century ETF Trust 0.31%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

With a total expense ratio (TER) of 0.06%, the portfolio benefits from low costs, which can significantly enhance long-term returns. Keeping investment costs low is crucial for maximizing the compounding effect of returns, a principle well applied in this portfolio's construction.

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