A diverse ETF-driven portfolio with a cautious risk profile and a focus on dividends
Risk profile
- Secure Speculative
The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.
Diversification profile
- Focused Diversified
The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.
What type of investor this portfolio is suitable for
Cautious Investors
This portfolio is well-suited for investors with a cautious risk tolerance, seeking a balance between income and growth. It's tailored for those who prefer a diversified investment approach, combining the stability of dividends with the growth potential of equities. The ideal investor likely has a medium to long-term horizon, valuing steady returns and risk mitigation over aggressive growth.
Positions
-
Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 30.00% -
Avantis All Equity Markets ETF
AVGE - US0250722321 20.00% -
Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 15.00% -
Vanguard International High Dividend Yield Index Fund ETF Shares
VYMI - US9219467944 15.00% -
Janus Detroit Street Trust - Janus Henderson AAA CLO ETF
JAAA - US47103U8457 10.00% -
Global X Funds
SHLD - US37960A5294 10.00%
This portfolio is primarily composed of ETFs, with a significant emphasis on stocks (90%) and a minor allocation to bonds (10%). The selection of ETFs spans various sectors and geographies, with a notable focus on momentum, equity markets, dividend equities, and international high dividend yields. This structure suggests a strategy aimed at balancing growth with income generation, tailored to a cautious risk tolerance.
Growth
The portfolio has demonstrated impressive historical performance, with a Compound Annual Growth Rate (CAGR) of 23.83% and a maximum drawdown of -12.58%. These figures indicate a strong upward trend in value, albeit with some volatility. The days contributing to 90% of returns being concentrated in a relatively small number suggests significant gains were achieved during specific periods, emphasizing the impact of market timing and momentum strategies.
Projection
Using a Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of potential outcomes. The median projected growth is substantial, but it's important to note that such simulations assume past trends will continue, a limitation given the unpredictable nature of markets.
Asset classes
- Stocks 90%
- Bonds 10%
- Cash 0%
- Other 0%
- No data 0%
The asset class distribution, with a heavy tilt towards stocks, aligns with the portfolio's growth-oriented strategy. However, the 10% allocation to bonds offers some cushion against stock market volatility. This mix supports the portfolio's cautious risk profile while still aiming for significant growth.
Sectors
- Technology 18%
- Financials 17%
- Industrials 17%
- Telecommunications 7%
- Consumer Discretionary 6%
- Consumer Staples 6%
- Energy 6%
- Health Care 6%
- Utilities 2%
- Basic Materials 2%
- Real Estate 1%
The sector allocation is well-diversified, covering technology, financial services, and industrials prominently, alongside a mix of other sectors. This diversification can help mitigate sector-specific risks, although the technology and financial sectors' significant weight could expose the portfolio to higher volatility in these areas.
Regions
- North America 66%
- Europe Developed 12%
- Japan 3%
- Asia Developed 3%
- Asia Emerging 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
- Europe Emerging 0%
Geographic allocation is predominantly in North America (66%), with diversified exposure across developed and emerging markets in Europe, Asia, and other regions. This global spread can help capture growth in various economies, though the heavy North American concentration may reflect a home bias, potentially limiting global diversification benefits.
Market capitalization
- Large-cap 37%
- Mega-cap 27%
- Mid-cap 19%
- Small-cap 4%
- Micro-cap 2%
The market capitalization exposure, with a mix of big, mega, and medium-sized companies, suggests a balanced approach to risk. Smaller allocations to small and micro-cap stocks introduce growth potential but with increased volatility and risk.
Dividends
- Avantis All Equity Markets ETF 1.70%
- Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 5.50%
- Schwab U.S. Dividend Equity ETF 3.70%
- Global X Funds 0.20%
- Invesco S&P 500® Momentum ETF 0.60%
- Vanguard International High Dividend Yield Index Fund ETF Shares 3.80%
- Weighted yield (per year) 2.22%
The dividend yield across various ETFs contributes to the portfolio's income generation, complementing growth strategies. This approach is particularly appealing for cautious investors seeking steady income alongside capital appreciation.
Ongoing product costs
- Avantis All Equity Markets ETF 0.23%
- Janus Detroit Street Trust - Janus Henderson AAA CLO ETF 0.21%
- Schwab U.S. Dividend Equity ETF 0.06%
- Global X Funds 0.50%
- Invesco S&P 500® Momentum ETF 0.13%
- Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
- Weighted costs total (per year) 0.20%
The portfolio's total expense ratio (TER) of 0.20% is relatively low, enhancing net returns. Keeping costs down is crucial for long-term investment success, as they can significantly erode returns over time.
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.
The current portfolio's expected return is below the optimal portfolio's 7.75% return at a similar risk level, suggesting room for reallocation or rebalancing. Optimization aims for the best possible risk-return ratio, indicating that adjusting the asset mix could enhance performance without increasing risk unduly.
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