Balanced and highly diversified portfolio with a global reach and a focus on low costs

Report created on Jul 21, 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 is structured with a 60% allocation towards equities and a 20% allocation towards bonds, with the remaining 20% distributed across international stocks, small-cap value stocks, and emerging markets. This composition suggests a balanced approach to risk, aiming to capture growth through equities while using bonds to mitigate volatility. The inclusion of both international and emerging market equities enhances global exposure, potentially offering a hedge against region-specific economic downturns and tapping into growth opportunities outside the domestic market.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 9.43% and a maximum drawdown of -29.90%, the portfolio has demonstrated resilience and growth over time. The days contributing to 90% of returns highlight the impact of significant market movements on performance. This historical performance, combined with a balanced risk profile, indicates a well-structured portfolio capable of weathering market volatility while offering attractive returns. However, investors should remember that past performance is not indicative of future results.

Projection Info

Using Monte Carlo simulations, the forward projection offers a range of potential outcomes based on historical data. With 931 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for future growth. However, the wide range between the 5th and 67th percentiles underscores the inherent uncertainties in market movements. Investors should consider these projections as one of many tools in decision-making, acknowledging the limitations of relying solely on historical data for future predictions.

Asset classes Info

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

The portfolio's asset class distribution, with a dominant 79% in stocks and 20% in bonds, aligns with its balanced risk classification. This allocation is conducive to achieving long-term growth while buffering against short-term market dips. The minimal cash holding suggests an active investment approach, maximizing market exposure. Investors might consider whether the current stock-bond ratio aligns with their risk tolerance and investment horizon, potentially adjusting allocations for better alignment.

Sectors Info

  • Technology
    18%
  • Financials
    15%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    3%
  • Utilities
    2%

The sectoral allocation spans technology, financial services, industrials, and consumer cyclicals, among others, offering a broad market representation. The technology sector's prominence is consistent with its significant role in driving modern economic growth, though it may introduce higher volatility. A balanced sector distribution can mitigate sector-specific risks, but investors should monitor sector concentrations and consider rebalancing to avoid overexposure to any single sector's cyclical risks.

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 allocation emphasizes North America with significant exposure to emerging and developed markets in Asia and Europe. This global diversification can reduce risk by spreading investments across different economic cycles and geopolitical environments. However, the relatively lower exposure to Latin America and Africa/Middle East suggests potential areas for increased diversification, especially for investors seeking broader emerging market exposure.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    21%
  • Mid-cap
    15%
  • Small-cap
    10%
  • Micro-cap
    2%

The spread across mega, big, medium, small, and micro-cap stocks indicates a comprehensive market cap diversification strategy. This approach leverages the growth potential of smaller companies while relying on the stability of larger corporations. However, the allocation towards smaller cap stocks, while beneficial for growth, may also increase volatility. Investors should assess their comfort with the associated risks and consider adjusting the market cap distribution to match their risk tolerance.

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.

The portfolio's current allocation suggests it is near the Efficient Frontier, indicating an optimized risk-return balance based on historical data. However, as market conditions evolve, so does the Efficient Frontier. Regularly reviewing and adjusting the portfolio in response to changing market dynamics can help maintain this optimization, ensuring the portfolio continues to meet the investor's goals and risk tolerance.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard Small-Cap Value Index Fund ETF Shares 2.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.70%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.28%

The portfolio's average dividend yield of 2.28% contributes to its total return, providing a steady income stream in addition to potential capital gains. This yield is particularly relevant for income-focused investors or those seeking a buffer against market volatility. However, dividend yields can vary with market conditions and company performance, so investors should not rely solely on dividends for return expectations.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • 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 a total expense ratio (TER) of 0.04%, the portfolio stands out for its cost efficiency, enhancing net returns for investors. Lower costs are crucial for long-term investment success, as they compound over time, significantly affecting final investment outcomes. Investors should continue to monitor costs, including looking for opportunities to further minimize expenses without compromising on diversification and risk management.

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