Balanced portfolio with a strong tilt towards US equities and moderate global exposure

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio's composition is heavily weighted towards the Vanguard S&P 500 ETF, making up 80%, with the remaining 20% in the Vanguard FTSE Developed Markets Index Fund ETF Shares. This asset allocation demonstrates a significant inclination towards US equities, given the S&P 500's focus, while still maintaining a moderate diversification through exposure to developed markets outside the US. The heavy concentration in a single country's market, particularly the US, aligns with a balanced risk profile but leans towards less geographical diversification.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.05%, which is impressive. The maximum drawdown of -34% indicates a period of significant loss, reflecting the inherent risks of the stock market. The fact that 90% of returns came from just 29 days highlights the volatility and the importance of being invested during the market's best-performing days. Comparing these figures to a benchmark would further contextualize the portfolio's performance, especially considering its risk score.

Projection Info

The Monte Carlo simulation, which runs 1,000 hypothetical scenarios to project future performance, shows a wide range of outcomes with a median 50th percentile increase of 280.4%. This suggests that while there's potential for substantial growth, there's also significant uncertainty, as evidenced by the 5th percentile at just 32.6% growth. These projections underscore the importance of understanding one's risk tolerance and the potential for wide variations in portfolio performance.

Asset classes Info

  • Stocks
    99%

The portfolio is almost entirely allocated to stocks (99%), with a negligible amount in cash or other asset classes. This high allocation to stocks is typical for portfolios seeking growth, but it comes with higher volatility and risk, especially in the short term. Diversification across different asset classes could provide a buffer against market volatility and reduce overall portfolio risk.

Sectors Info

  • Technology
    28%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation within the portfolio is fairly diversified, with technology (28%), financial services (16%), and consumer cyclicals (11%) being the most heavily weighted. This sector distribution is reflective of the broader market trends, particularly the heavy influence of technology. However, the high concentration in technology also exposes the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly focused on North America (82%), with a smaller allocation to Europe Developed (11%) and Japan (4%). This heavy North American bias, while potentially beneficial during periods of strong US market performance, may limit exposure to growth opportunities in other regions and increase vulnerability to US-centric economic downturns.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization breakdown shows a preference for larger companies, with 46% in mega-cap and 34% in large-cap stocks. This skew towards larger companies typically offers more stability and lower volatility compared to smaller companies but might also limit growth potential as these companies are often more mature and grow at a slower pace.

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, the portfolio could potentially be optimized for a better risk-return ratio by adjusting the asset allocation. While the current focus on US equities has historically provided strong returns, diversifying further across asset classes and regions could enhance the portfolio's efficiency. This means achieving the highest possible returns for a given level of risk by fine-tuning the balance between different investments.

Dividends Info

  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.50%

The portfolio's dividend yield stands at an average of 1.50%, with the Vanguard FTSE Developed Markets Index Fund ETF Shares contributing a higher yield of 2.70% compared to the Vanguard S&P 500 ETF's 1.20%. This yield provides a steady income stream, which can be particularly beneficial in volatile or down markets, contributing to the portfolio's overall returns.

Ongoing product costs Info

  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from exceptionally low costs, with Total Expense Ratios (TERs) of 0.05% for the Vanguard FTSE Developed Markets Index Fund ETF Shares and 0.03% for the Vanguard S&P 500 ETF. These low costs are crucial for enhancing long-term returns, as they minimize the drag on performance. The portfolio's focus on low-cost index funds is a sound strategy for cost-efficient investing.

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