Balanced and highly diversified global investment portfolio with a focus on ETFs

Report created on Aug 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio under review showcases a strategic blend of 70% stocks, 20% bonds, and 10% real estate, with a minor cash holding. This allocation is spread across a variety of ETFs that provide exposure to global markets, including specific allocations to Australia, Brazil, and China, alongside broader international and U.S. assets. The emphasis on ETFs simplifies portfolio management while ensuring broad market exposure. Given the diversification across asset classes and geographies, this portfolio aligns well with a balanced risk profile, aiming to mitigate volatility through diversification.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.43%, with a maximum drawdown of -32.62%. These figures suggest a resilient performance across varying market conditions, balancing growth with risk management effectively. The days contributing to 90% of returns highlight the portfolio's potential for significant gains on relatively few but impactful days. This performance underscores the importance of staying invested over the long term to capture key growth opportunities.

Projection Info

Monte Carlo simulations, which use historical data to project a range of possible future outcomes, indicate a wide spectrum of potential performances for this portfolio. With a 50th percentile projection showing a 117.2% return, the portfolio demonstrates strong potential for growth. However, the 5th percentile at -52.4% underscores the inherent risks. These projections are useful for setting realistic expectations, though it's crucial to remember that past performance is not a guaranteed predictor of future results.

Asset classes Info

  • Stocks
    70%
  • Bonds
    20%
  • Real Estate
    10%
  • Cash
    1%

The allocation to stocks, bonds, and real estate is a classic example of a diversified portfolio designed to balance growth with income and stability. Stocks offer growth potential, bonds provide income and act as a buffer against stock market volatility, and real estate can offer both income through dividends and potential appreciation. This mix supports a balanced investment approach, suitable for investors with a moderate risk tolerance.

Sectors Info

  • Financials
    17%
  • Real Estate
    12%
  • Technology
    11%
  • Consumer Discretionary
    7%
  • Industrials
    7%
  • Health Care
    6%
  • Telecommunications
    5%
  • Basic Materials
    5%
  • Energy
    5%
  • Consumer Staples
    4%
  • Utilities
    2%

Sector allocation is well-diversified, covering financial services, real estate, technology, and more, which helps in spreading risk. However, the concentration in financial services and real estate might expose the portfolio to sector-specific risks, such as interest rate changes. Diversifying across sectors can mitigate the impact of any single sector underperforming, supporting a more stable portfolio performance over time.

Regions Info

  • North America
    41%
  • Australasia
    11%
  • Latin America
    10%
  • Asia Emerging
    7%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Developed
    2%
  • Africa/Middle East
    1%

Geographic exposure includes significant investments in North America, Australasia, Latin America, and emerging Asian markets. This global diversification enhances the portfolio's growth potential by tapping into different economic cycles and opportunities worldwide. However, the allocation to emerging markets, while offering high growth potential, also introduces higher volatility and risk, necessitating careful monitoring.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization exposure leans towards mega and big cap stocks, which typically offer stability and lower volatility compared to smaller companies. However, this focus might limit exposure to high-growth opportunities often found in mid, small, and micro-cap stocks. Incorporating a broader range of market caps could enhance growth potential while maintaining a balanced risk profile.

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.

Optimization using the Efficient Frontier could further enhance the portfolio's risk-return profile. This method identifies the most efficient allocation of assets to achieve the best possible returns for a given level of risk. While the current allocation appears well-balanced, there may be opportunities to adjust asset weights to improve returns without increasing risk significantly. Regular review and adjustment in response to changing market conditions are advisable.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • iShares MSCI Australia ETF 3.10%
  • iShares MSCI Brazil ETF 6.00%
  • iShares China Large-Cap ETF 2.60%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Vanguard Real Estate Index Fund ETF Shares 3.90%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 3.06%

Dividend yields across the various ETFs contribute to the portfolio's total yield of 3.06%, offering a steady income stream in addition to potential capital gains. This yield is particularly beneficial in a balanced portfolio, providing cash flow which can be reinvested or used as income. Balancing high-dividend assets with growth-oriented investments can optimize the portfolio for both income and appreciation.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • iShares MSCI Australia ETF 0.50%
  • iShares MSCI Brazil ETF 0.59%
  • iShares China Large-Cap ETF 0.74%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) of 0.20% is impressively low, maximizing investor returns by minimizing costs. ETFs are known for their cost efficiency, and this portfolio benefits from selecting funds with competitive fees. Keeping costs low is a critical component of long-term investment success, as even small differences in fees can significantly impact net returns over time.

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