Balanced and highly diversified portfolio with a focus on broad market exposure and low costs

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is structured around a core-satellite strategy, emphasizing broad market exposure through ETFs. The majority allocation to the Vanguard Total Stock Market Index Fund ETF Shares (45%) provides comprehensive U.S. equity market coverage. The inclusion of international stocks, emerging markets, intermediate-term treasuries, and mid-cap equities enhances diversification. This balanced approach between stocks (79%) and bonds (20%) aligns with a profile aiming for moderate growth with controlled risk exposure.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 9.38% and a maximum drawdown of -28.36%, the portfolio demonstrates resilience and the potential for steady growth. The days contributing to 90% of returns suggest that gains are concentrated in specific periods, highlighting the importance of staying invested through market cycles. Comparatively, the performance metrics suggest a balanced risk-return trade-off, suitable for investors with a medium-term outlook and a moderate risk tolerance.

Projection Info

The Monte Carlo simulation, projecting a wide range of outcomes based on historical data, indicates a median growth potential of 167.5% over the simulation period. While such projections are informative, they also underscore the inherent uncertainty in all market forecasts. The range from the 5th to the 67th percentile (-2.0% to 252.7%) reflects this variability, emphasizing the need for ongoing portfolio review and adjustment in response to changing market conditions.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%

The asset class distribution, with a substantial tilt towards stocks (79%) over bonds (20%), positions the portfolio for growth while maintaining a buffer against market volatility through fixed income securities. This allocation supports a balanced investment strategy, aiming to capture equity market gains while mitigating risks through bond investments. Adjusting the stock-bond ratio can further align the portfolio with the investor's changing risk tolerance and investment horizon.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Industrials
    9%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is well-diversified, with technology (19%) and financial services (14%) as the leading sectors, followed by industrials and consumer cyclicals. This sector spread mirrors the broader market composition, contributing to the portfolio's resilience against sector-specific risks. However, investors should monitor sector concentrations, especially in rapidly evolving industries like technology, to ensure ongoing alignment with investment objectives.

Regions Info

  • North America
    51%
  • Asia Emerging
    9%
  • Europe Developed
    8%
  • Asia Developed
    4%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%

Geographic diversification is achieved through a mix of North American (51%), emerging Asian (9%), and developed European (8%) exposures, among others. This global footprint enhances the portfolio's growth potential and spreads geopolitical and currency risks. However, the dominant North American exposure suggests a potential opportunity to further diversify by increasing allocations to underrepresented regions, enhancing global exposure.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    23%
  • Mid-cap
    18%
  • Small-cap
    4%
  • Micro-cap
    1%

The market capitalization breakdown, with a focus on mega (32%) and big (23%) cap stocks, lends stability to the portfolio while medium (18%), small (4%), and micro (1%) cap stocks offer growth potential. This mix balances the pursuit of growth with the need for stability, a characteristic of a balanced investment strategy. Diversifying further into smaller caps could enhance growth prospects but would also increase volatility.

Redundant positions Info

  • Vanguard Mid-Cap Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard Mid-Cap Index Fund ETF Shares and the Vanguard Total Stock Market Index Fund ETF Shares suggests redundancy, limiting the diversification benefits. Reducing overlap by reallocating from highly correlated assets to those with lower correlations can enhance portfolio efficiency by spreading risk more effectively across different investment vehicles.

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.

To optimize the risk-return profile, focusing on reducing asset overlap and enhancing diversification across uncorrelated assets is recommended. While the Efficient Frontier concept suggests an ideal combination of assets for maximizing returns for a given level of risk, real-world application requires regular adjustment to reflect changing market conditions and investment goals.

Dividends Info

  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.40%
  • Vanguard Mid-Cap Index Fund ETF Shares 1.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.16%

The portfolio's average dividend yield of 2.16% contributes to its total return, offering a steady income stream in addition to potential capital appreciation. While not the primary focus, dividends play a crucial role in compounding returns over time, especially in a balanced portfolio where income can provide a buffer during market downturns.

Ongoing product costs Info

  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Mid-Cap Index Fund ETF Shares 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With an overall expense ratio of 0.04%, the portfolio benefits from Vanguard's low-cost ETF offerings, maximizing net returns for investors. Keeping costs low is fundamental to enhancing long-term investment outcomes, as even small differences in fees can have a significant impact on compounding returns over time.

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