This portfolio has only about 3.8 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced and Broadly Diversified Portfolio with Strong Historic Performance

Report created on Jul 30, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of four main ETFs: Vanguard S&P 500 ETF (50%), Invesco NASDAQ 100 ETF (20%), Avantis U.S. Small Cap Value ETF (15%), and Vanguard Total International Stock Index Fund ETF Shares (15%). This composition indicates a strong bias towards U.S. equities, with a significant portion allocated to large-cap stocks and a smaller but notable allocation to small-cap value and international stocks. This mix provides a good balance between growth potential and diversification, which is essential for managing risk in a balanced portfolio.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 14.56%, with a maximum drawdown of -25.09%. This performance suggests that the portfolio has been able to generate strong returns while also experiencing significant volatility. Understanding this helps set realistic expectations for future performance, especially during market downturns. To manage this volatility, it's crucial to have a long-term investment horizon and not react impulsively to short-term market fluctuations.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The 5th percentile outcome is 122.55%, the median (50th percentile) is 574.39%, and the 67th percentile is 857.04%. This simulation helps visualize a range of possible outcomes based on historical data and variability. While the median projection is quite optimistic, it's essential to prepare for lower-end scenarios as well. Regularly reviewing and adjusting the portfolio can help navigate these uncertainties.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, making up 99.47% of the total allocation, with minimal exposure to cash and other asset classes. This high concentration in equities can lead to higher returns but also increases risk. Diversifying into other asset classes like bonds could help reduce risk and provide more stability. Adding a small allocation to bonds or other fixed-income securities could be beneficial, especially during periods of market volatility.

Sectors Info

  • Technology
    28%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is diversified across several industries, with the highest concentration in Technology (28%), followed by Financial Services (13.5%) and Consumer Cyclicals (12.4%). This broad sector diversification helps mitigate risks associated with sector-specific downturns. However, the heavy weighting in Technology could expose the portfolio to higher volatility. Rebalancing the sector allocation periodically can help maintain a balanced risk profile and ensure no single sector dominates the portfolio.

Regions Info

  • North America
    85%
  • Europe Developed
    7%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America (85%), with smaller allocations to Europe, Asia, and other regions. This concentration in North America provides exposure to a stable and growing market but also limits the benefits of global diversification. Increasing exposure to international markets could provide growth opportunities and reduce regional risk. Diversifying geographically can help capture growth in emerging markets and mitigate risks associated with economic downturns in any single region.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.48%

The portfolio's dividend yield is not explicitly provided, but given the ETFs included, it likely generates some level of dividend income. Dividends can provide a steady income stream and contribute to total returns, especially during market downturns. Reinvesting dividends can also enhance long-term growth through compounding. Monitoring the dividend yield and considering higher-yielding assets if income generation is a priority can be beneficial.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is 0.09%, which is quite low. Low costs are advantageous as they minimize the drag on returns, allowing more of the portfolio's performance to benefit the investor. Keeping investment costs low is a fundamental principle of effective portfolio management. Regularly reviewing and comparing expense ratios can help ensure that the portfolio remains cost-efficient, especially when considering new investments or rebalancing.

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