Balanced portfolio with a strong foundation in ETFs and a focus on diversified global exposure

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed of a mix of ETFs that span across stocks and bonds, with a significant tilt towards the stock market (79%). The allocation includes 45% in a total stock market index, reflecting a broad exposure to the U.S. equity market, complemented by 20% in international stocks and 15% in emerging markets, enhancing its global diversification. The bond component, represented by a 20% allocation in high-yield corporate bonds, adds a layer of income generation and risk mitigation. This blend signifies a balanced approach, aiming to capture growth while buffering against market volatility.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 10.08%, the portfolio has demonstrated robust growth. The maximum drawdown of -31.83% suggests a moderate level of risk, consistent with the portfolio's balanced classification. The performance is particularly notable given the days contributing to 90% of returns, indicating significant gains were achieved on relatively few trading days. This historical performance, while encouraging, should be viewed as a guide rather than a guarantee of future returns.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a potential 182.4% return, with a 67th percentile at 276.7%, indicating optimism for growth. However, the 5th percentile at -9.0% acknowledges the risk of loss. These simulations underscore the uncertainty in investing, emphasizing the importance of a long-term perspective and risk tolerance.

Asset classes Info

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

The portfolio's asset class allocation—79% stocks, 20% bonds, and 1% cash—strikes a balance between growth potential and risk management. The heavy allocation to stocks aims to capitalize on long-term growth opportunities, while the bond component provides income and reduces volatility. This composition aligns with a balanced investment strategy, suitable for investors with a moderate risk tolerance and a long-term investment horizon.

Sectors Info

  • Technology
    20%
  • Financials
    14%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sectoral allocation covers a broad spectrum, with technology (20%) and financial services (14%) being the most prominent. This reflects a common trend in modern portfolios, given the significant role these sectors play in economic growth. However, the concentration in technology also introduces sector-specific risks, such as higher volatility during market downturns. Diversification across other sectors like consumer cyclicals and industrials mitigates this risk, contributing to the portfolio's overall balance.

Regions Info

  • North America
    46%
  • Asia Emerging
    12%
  • Europe Developed
    8%
  • Asia Developed
    5%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%

Geographic exposure is well-distributed, with a notable emphasis on North America (46%) and a diversified mix across both developed and emerging markets in Asia and Europe. This global footprint enhances the portfolio's growth potential by tapping into different economic cycles and market dynamics. However, the concentration in North America reflects a home bias that is common but should be monitored to ensure global opportunities are fully leveraged.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    24%
  • Mid-cap
    14%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization spread—34% mega, 24% big, 14% medium, 4% small, and 1% micro—demonstrates a preference for larger, more established companies, which typically offer stability and steady growth. However, the inclusion of smaller caps introduces growth potential, albeit with increased volatility. This balance supports the portfolio's objective of achieving long-term growth while managing 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.

The portfolio's current allocation suggests it is positioned near the Efficient Frontier, indicating an optimal balance between risk and return based on historical data. However, it's important to remember that market conditions evolve, and what is considered "efficient" may change. Regular reviews and adjustments are essential to maintain this balance, ensuring the portfolio continues to meet the investor's goals and risk tolerance.

Dividends Info

  • iShares Broad USD High Yield Corporate Bond ETF 6.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.78%

The portfolio's dividend yield averages 2.78%, with the high-yield bond ETF contributing significantly at 6.20%. This income component is a crucial aspect of the portfolio's total return, especially in volatile or declining markets. Dividends provide a steady income stream and can be reinvested to compound growth, highlighting the importance of considering yield in the overall investment strategy.

Ongoing product costs Info

  • iShares Broad USD High Yield Corporate Bond ETF 0.08%
  • 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) 0.05%

With an average Total Expense Ratio (TER) of 0.05%, the portfolio benefits from low costs, which is crucial for enhancing long-term returns. Lower costs mean more of the investment's return is retained by the investor, rather than being eroded by fees. This efficiency is especially important in a balanced portfolio, where the objective is to achieve steady growth without excessive risk.

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