Balanced portfolio with a strong focus on US equities and low costs

Report created on Oct 24, 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 heavily weighted towards US equities, with an 80% allocation in the Vanguard S&P 500 ETF and a 20% allocation in the Vanguard Total International Stock Index Fund ETF Shares. This composition reflects a preference for the stability and growth potential of large-cap US companies, while also incorporating a diversified international exposure to mitigate geographic risk. The allocation across only two ETFs simplifies the portfolio, making it easy to manage, but it also concentrates risk to the performance of these markets.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 14.06%, with a maximum drawdown of -33.90%. The drawdown indicates the portfolio's vulnerability during market downturns, but the high CAGR suggests strong recovery and growth potential. The days that make up 90% of returns number at 33, highlighting the impact of significant market movements on portfolio performance. This historical performance is a useful indicator, though it's crucial to remember that past results do not guarantee future outcomes.

Projection Info

Monte Carlo simulations project a wide range of potential outcomes for this portfolio, with key percentiles indicating significant growth potential but also notable risk. The 50th percentile forecast suggests a 399.5% return, indicating robust growth potential. However, the range from the 5th to the 67th percentile underscores the uncertainty inherent in these projections. While Monte Carlo simulations are valuable for understanding potential volatility and outcomes, they are based on historical data and cannot predict future market conditions with certainty.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is nearly entirely in stocks (99%), with a minimal cash position (1%). This allocation underscores a growth-oriented strategy but comes with higher volatility and risk compared to portfolios with more significant allocations to bonds or other asset classes. The lack of diversification across asset classes may increase the portfolio's sensitivity to stock market fluctuations, emphasizing the importance of understanding one's risk tolerance and investment horizon.

Sectors Info

  • Technology
    31%
  • Financials
    15%
  • Consumer Discretionary
    11%
  • Telecommunications
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is heavily weighted towards technology (31%), financial services (15%), and consumer cyclicals (11%), reflecting a growth-focused strategy. This sector concentration can offer higher returns but also increases vulnerability to sector-specific downturns. Diversifying across a broader range of sectors could mitigate some of this risk, potentially smoothing out returns over time.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly invested in North America (81%), with limited exposure to developed Europe (8%) and emerging Asian markets (3%). This concentration in North American equities, particularly the US, leverages the region's economic stability and growth prospects. However, increasing exposure to other regions could offer additional diversification benefits, potentially reducing risk and capturing growth in emerging markets.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's market capitalization breakdown shows a strong preference for mega (46%) and big (33%) cap stocks, which tend to be more stable and less volatile than smaller companies. However, this focus may limit the portfolio's growth potential compared to a strategy that includes a higher proportion of medium, small, or micro-cap stocks, which can offer higher growth potential albeit with increased 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.

Optimizing this portfolio using the Efficient Frontier could potentially improve the risk-return ratio. The current allocation demonstrates a strong growth orientation but might benefit from adjustments to enhance diversification and reduce volatility. Optimization would involve rebalancing the asset allocation to achieve the most desirable risk-return trade-off without significantly altering the portfolio's overall growth objectives.

Dividends Info

  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.42%

The dividend yields of 1.10% for the Vanguard S&P 500 ETF and 2.70% for the Vanguard Total International Stock Index Fund ETF Shares contribute to a total portfolio yield of 1.42%. This yield offers a modest income stream in addition to potential capital gains. For investors seeking higher income, considering assets with higher dividend yields or fixed income securities might be beneficial.

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) 0.03%

The portfolio's costs are impressively low, with total expense ratios (TER) of 0.03% for the Vanguard S&P 500 ETF and 0.05% for the Vanguard Total International Stock Index Fund ETF Shares. Low costs are crucial for long-term investment success, as they directly enhance net returns by reducing the drag on performance. This cost efficiency is a significant strength of the portfolio.

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