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Balanced portfolio with a strong focus on North American financials and diversified ETFs

Report created on Jul 30, 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 characterized by a significant allocation towards financial stocks and ETFs, representing a combined weight of over 46%. The presence of major Canadian banks like the Bank of Montreal and Toronto Dominion Bank, alongside diversified ETFs such as the Vanguard S&P 500 Index ETF, suggests a strategy that leans towards stable, dividend-yielding investments. However, the portfolio's heavy tilt towards financials may limit sectoral diversification. Diversification is further achieved through investments across North America, developed European markets, and a modest exposure to other global regions.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.05%, with a maximum drawdown of -32.98%. These figures indicate a strong performance trend, albeit with significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 22.0 days highlight the portfolio's susceptibility to short-term market movements. Comparing this performance to a balanced benchmark could provide further insight into risk-adjusted returns.

Projection Info

Using Monte Carlo simulations, which estimate future performance based on historical data, the portfolio shows a wide range of outcomes. The 50th percentile projection suggests a potential 701.7% increase, while the 5th and 67th percentiles indicate more conservative and optimistic scenarios, respectively. It's crucial to remember that these projections, while useful for planning, are speculative and depend on past market behaviors continuing into the future.

Asset classes Info

  • Stocks
    53%
  • US Equity
    24%
  • Stocks
    10%

The portfolio's asset allocation is heavily skewed towards stocks (53%) and US Equity (24%), with a smaller portion in other equities (10%). This composition underlines a growth-oriented strategy but comes with higher volatility. The absence of more conservative asset classes like bonds or cash equivalents might be a concern for risk-averse investors, suggesting a review of allocation to enhance stability during market downturns.

Sectors Info

  • Financials
    46%
  • Consumer Staples
    16%
  • Technology
    9%
  • Industrials
    7%
  • Energy
    5%
  • Basic Materials
    4%
  • Health Care
    4%
  • Consumer Discretionary
    4%
  • Telecommunications
    3%
  • Utilities
    1%
  • Real Estate
    1%

Sectoral allocation shows a heavy emphasis on financial services (46%) and a reasonable spread across consumer defensive, technology, and other sectors. While the financial sector can offer stable dividends, this concentration increases susceptibility to sector-specific risks. Diversifying more significantly into sectors with growth potential or lower correlation with financial markets could provide a more balanced risk-return profile.

Regions Info

  • North America
    87%
  • Europe Developed
    8%
  • Japan
    3%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is predominantly invested in North America (87%), with minor allocations in Europe Developed and Japan. This concentration benefits from the stability and growth potential of North American markets but may miss out on opportunities in emerging markets or other developed regions. Increasing exposure to underrepresented geographies could enhance diversification and potentially capture higher growth rates.

Market capitalization Info

  • Large-cap
    65%
  • Mega-cap
    25%
  • Mid-cap
    9%
  • Small-cap
    1%

The market capitalization breakdown shows a preference for big (65%) and mega (25%) cap stocks, indicating a conservative approach favoring established companies. While this can offer stability and reliable dividends, incorporating more medium or small-cap stocks could introduce growth potential and further diversification, albeit with increased risk.

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.

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Considering the Efficient Frontier, this portfolio may benefit from optimization to achieve a better risk-return ratio. Adjusting allocations across different assets and sectors without increasing the overall risk could potentially yield higher returns. This optimization should consider current market conditions and future outlooks, keeping in mind that efficiency is based on historical data and may not predict future performance accurately.

Dividends Info

  • Bank of Montreal 4.00%
  • Canadian Natural Resources Ltd 5.10%
  • HudBay Minerals Inc 0.10%
  • Loblaw Companies Limited 1.00%
  • Metro Inc. 1.30%
  • Mackenzie US Large Cap Equity Index ETF 0.80%
  • Stantec Inc 0.60%
  • Toronto Dominion Bank 3.10%
  • TD International Equity Index ETF 1.70%
  • TD Q Canadian Dividend ETF 2.90%
  • Vanguard S&P 500 Index ETF 0.70%
  • BMO MSCI EAFE 1.80%
  • BMO S&P/TSX Equal Weight Banks 3.30%
  • Weighted yield (per year) 2.26%

The portfolio's average dividend yield stands at 2.26%, with individual yields ranging from 0.10% to 5.10%. This indicates a strategy partly focused on income generation through dividends. However, balancing yield with growth potential and sector diversification could improve overall portfolio performance and sustainability of returns.

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