A balanced and diversified portfolio with a focus on global equity exposure

Report created on Jan 16, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists of two major ETFs, each representing 50% of the total assets. This composition offers a straightforward structure with a balanced mix between domestic and international equities. While this alignment is beneficial for simplicity and broad market exposure, it lacks diversification across different asset classes. A more varied composition could mitigate risks associated with market volatility.

Growth Info

Historically, the portfolio has delivered a solid Compound Annual Growth Rate (CAGR) of 10.11%. This performance is commendable, especially when compared to typical market benchmarks. However, a maximum drawdown of -34.46% indicates significant volatility during market downturns. While past performance is no guarantee of future results, understanding these trends can help set realistic expectations for future returns.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, the portfolio shows potential for substantial growth. With a median projection of 239.27% and a positive return in 957 out of 1,000 simulations, the outlook is optimistic. However, it's crucial to remember that these projections are not predictions and can vary with market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, accounting for nearly 99% of the assets. This concentration in a single asset class can lead to increased risk, particularly during market downturns. Diversifying into other asset classes, such as bonds or alternative investments, could provide a buffer against stock market volatility and enhance overall portfolio stability.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    12%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector exposure is well spread across 11 sectors, with technology and financial services leading the way. This balanced sector allocation aligns closely with global market benchmarks, providing diversification benefits. However, the high exposure to technology may lead to increased volatility, especially in times of interest rate changes or regulatory shifts.

Regions Info

  • North America
    54%
  • Europe Developed
    19%
  • Asia Emerging
    8%
  • Japan
    8%
  • Asia Developed
    5%
  • Australasia
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%

The portfolio's geographic allocation is predominantly focused on North America, followed by Europe and Asia. This distribution offers a good mix of developed and emerging markets, which can enhance diversification. However, the underrepresentation in regions like Africa and Latin America might limit exposure to potential growth opportunities in these areas.

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 is positioned on the Efficient Frontier, indicating an optimal risk-return balance given the current asset allocation. This means the portfolio is efficiently maximizing returns for its level of risk. However, exploring different allocations or introducing new asset classes could further enhance this efficiency, depending on changing market conditions and personal investment goals.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.35%

With a combined dividend yield of 2.35%, the portfolio offers a modest income stream. This yield can be attractive for investors seeking regular income alongside capital appreciation. However, focusing solely on dividends might overlook growth opportunities. Balancing income-generating assets with growth-oriented ones can provide a well-rounded investment strategy.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from impressively low costs, with a total expense ratio (TER) of just 0.06%. This cost efficiency supports better long-term performance by minimizing the drag on returns. Maintaining this low-cost structure is crucial for maximizing net returns over time, especially in a low-yield environment.

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