Balanced and broadly diversified portfolio with a strong focus on global stocks

Report created on Aug 3, 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 primarily composed of two ETFs: 75% in the Vanguard Total Stock Market Index Fund ETF Shares and 25% in the Vanguard Total International Stock Index Fund ETF Shares. This allocation reflects a significant emphasis on U.S. equities, given the 75% allocation, while still maintaining a meaningful exposure to international markets. Such a structure suggests a strategy aiming for broad diversification across both domestic and global stock markets, leveraging the inherent growth potential of equities while attempting to mitigate risk through geographical spread.

Growth Info

The portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.35%, with a maximum drawdown of -34.67%. These figures highlight a strong historical performance, albeit with significant volatility as indicated by the drawdown. The days contributing to 90% of returns being concentrated in just 27.0 days underscores the impact of short-term, high-gain periods on overall performance. Comparing these metrics with benchmarks would provide further context, but as it stands, the portfolio has shown robust growth potential.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes for this portfolio. With 967 out of 1,000 simulations yielding positive returns, the median projected increase is 288.4%, indicating strong potential for future growth. However, the significant spread between the 5th and 67th percentiles (22.0% to 432.2%) underscores the inherent uncertainty and risk in equity investments. It's important to note that while these projections offer valuable insights, they cannot guarantee future results.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (99%), with a minimal cash holding (1%). This high equity exposure aligns with the portfolio's balanced risk profile and its aim for growth over the long term. However, the lack of diversification into other asset classes, such as bonds or real estate (beyond stock market REITs), may increase volatility and risk during market downturns. Introducing other asset classes could provide additional stability and income.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation within this portfolio is well-diversified, with technology (27%) and financial services (16%) being the most prominent. This sectoral spread is reflective of the broader market composition, particularly within the U.S. However, the heavy weighting in technology, a sector known for its volatility, could influence the portfolio's overall risk profile. Balancing sector exposures, especially during tech market fluctuations, could enhance stability without significantly compromising growth potential.

Regions Info

  • North America
    77%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (77%), with diversified but smaller allocations across Europe, Asia, and other regions. This North American focus, primarily on the U.S. market, is typical for U.S.-based investors but does introduce geographical concentration risk. Increasing exposure to emerging markets and other developed markets could further diversify risk and tap into growth opportunities outside the U.S.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown—42% mega, 31% big, 19% medium, 6% small, and 2% micro—indicates a conservative tilt towards larger, more established companies. This bias towards larger caps may reduce volatility and provide stable returns but could also limit growth potential from smaller, more dynamic companies. A slight increase in small and micro-cap exposure could enhance growth prospects while introducing manageable 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.

Considering the Efficient Frontier, the portfolio's current allocation between the two ETFs appears well-optimized for a balance between risk and return, based on historical data. However, the lack of asset class diversification beyond equities suggests there might be room for improvement in achieving an optimal risk-return ratio. Exploring allocations that include bonds or alternative assets could potentially enhance the portfolio's efficiency.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.62%

The portfolio's dividend yield stands at 1.62%, with the international fund contributing a higher yield (2.90%) compared to the domestic fund (1.20%). While not the primary focus, dividends contribute to the portfolio's total return, offering a steady income stream in addition to potential capital gains. For investors seeking higher income, reallocating slightly towards higher-yielding assets could be beneficial.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Low costs are crucial for long-term investment success, as they compound favorably over time. This efficient cost structure is a significant strength of the portfolio, aligning with best practices for long-term investing.

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