A balanced and broadly diversified portfolio with a strong tilt towards US equities

Report created on Sep 22, 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 characterized by a heavy allocation to US equities, represented by the Vanguard S&P 500 ETF, and a significant, though lesser, commitment to international stocks via the Vanguard Total International Stock Index Fund ETF Shares. The 70-30 split between these ETFs suggests a strategy that leans towards the stability and growth potential of US markets, while still capturing the diversification benefits of international exposure. This composition aligns with a balanced investment approach, aiming to mitigate risk through geographic diversification while seeking growth through a substantial stake in US equities.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.93%, a robust figure that reflects the strong performance of both US and international equities over the past decade. However, the maximum drawdown of -33.88% highlights the potential volatility and risks associated with stock markets, especially during economic downturns. The days contributing to 90% of returns being limited to 34.0 underscores the unpredictability and concentration of stock market gains, emphasizing the importance of long-term investment.

Projection Info

Monte Carlo simulations, which use historical data to project potential future outcomes, suggest a wide range of possibilities for this portfolio. With key percentiles showing a substantial variance in outcomes, from a low 5th percentile increase of 65.7% to a high 67th percentile increase of 572.4%, these projections underscore the inherent uncertainty in stock market investments. The high percentage of simulations with positive returns (992 out of 1,000) indicates a strong likelihood of growth, yet the broad spread of potential outcomes highlights the importance of risk tolerance and time horizon in investment planning.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely invested in stocks (99%), with a minimal cash holding (1%). This asset class allocation underscores a growth-oriented strategy but also exposes the portfolio to market volatility. Stocks, while offering higher potential returns compared to other asset classes like bonds or real estate, can experience significant price fluctuations. Investors should be comfortable with the level of risk associated with a stock-heavy portfolio and consider whether a small allocation to other asset classes might provide better balance.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

With technology (29%) and financial services (16%) making up nearly half of the portfolio's sector allocation, there's a pronounced tilt towards industries that have been major drivers of market growth. However, this concentration also introduces sector-specific risks, such as regulatory changes or economic shifts affecting these industries disproportionately. Diversifying across a broader range of sectors could mitigate some of this risk, potentially smoothing out returns over time.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic allocation of this portfolio, with a 72% weighting towards North America, reflects a strong home bias. While the US market is one of the world's largest and most liquid, the underrepresentation of regions like Europe Emerging and Latin America (1% each) could mean missed opportunities in faster-growing markets. Broadening geographic exposure could enhance diversification and potentially capture growth in emerging markets.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    2%

The focus on mega (46%) and big (33%) cap stocks aligns with the portfolio's balanced risk profile, as these companies tend to be more stable and less volatile than their smaller counterparts. However, the relatively small allocation to medium (18%), small (2%), and micro (0%) cap stocks limits exposure to higher-growth potential segments of the market. Considering a slight increase in allocation towards smaller cap stocks could enhance growth prospects, albeit with added volatility.

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, which aims to determine the optimal risk-return balance, this portfolio appears well-positioned with its current allocation. However, continuous monitoring and occasional rebalancing are necessary to maintain this balance, especially as market conditions change. Investors should periodically review their portfolio to ensure it remains aligned with their risk tolerance and investment goals, potentially adjusting asset allocation to maintain an optimal position on the Efficient Frontier.

Dividends Info

  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.30%
  • Weighted yield (per year) 1.46%

The dividend yields of 1.10% for the Vanguard S&P 500 ETF and 2.30% for the Vanguard Total International Stock Index Fund ETF Shares contribute to a total portfolio yield of 1.46%. This yield provides a modest income stream, in addition to potential capital gains. For investors seeking both growth and income, this balanced approach can be appealing, though those requiring higher income might explore options with higher yielding assets.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 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 over time, significantly impacting the portfolio's growth. This efficient cost structure is a strong foundation for building wealth, underscoring the benefits of low-cost index fund investing.

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