This portfolio has only about 10 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced Broadly Diversified Portfolio with Strong Performance and Low Costs

Report created on Jul 30, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed primarily of ETFs, with a significant allocation to the Vanguard S&P 500 ETF (45%). Other notable holdings include the Schwab U.S. Dividend Equity ETF (15%), Vanguard Total International Stock Index Fund ETF Shares (15%), Vanguard Total Stock Market Index Fund ETF Shares (13%), and Vanguard High Dividend Yield Index Fund ETF Shares (12%). This broad diversification across various ETFs helps to spread risk and capture growth across different market segments. However, the heavy concentration in U.S. equities might limit exposure to international opportunities.

Growth Info

Historically, the portfolio has performed well, with a compound annual growth rate (CAGR) of 11.37%. This robust performance is tempered by a maximum drawdown of -34.0%, indicating significant volatility during market downturns. The portfolio's returns are concentrated, with 90% of returns coming from just 28 days, highlighting the importance of staying invested to capture these key growth periods. Overall, the historical performance suggests strong growth potential but also emphasizes the need for a long-term investment horizon to weather market fluctuations.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. This method uses random sampling to predict potential outcomes based on historical data. The simulation showed a median (50th percentile) end portfolio value of 296.88%, with a 5th percentile value of 33.72% and a 67th percentile value of 436.32%. An impressive 987 out of 1,000 simulations resulted in positive returns, with an annualized return of 11.66%. This projection underscores the portfolio's potential for substantial growth, albeit with some risk.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99.41% allocated to this asset class. A minor portion is held in cash (0.57%) and other assets (0.02%). This high concentration in equities aligns with the balanced risk classification but may expose the portfolio to significant market volatility. Diversifying into other asset classes, such as bonds, could help mitigate risk and provide more stable returns, especially during market downturns.

Sectors Info

  • Technology
    22%
  • Financials
    15%
  • Health Care
    12%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Consumer Staples
    8%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is diverse, with significant exposure to Technology (22.29%), Financial Services (15.42%), and Healthcare (12.40%). Other sectors like Industrials, Consumer Cyclicals, and Consumer Defensive also have notable allocations. This broad sector diversification helps reduce risk by spreading investments across various industries. However, the high concentration in Technology could lead to increased volatility. Balancing the sector allocation further could provide more stability and reduce sector-specific risks.

Regions Info

  • North America
    86%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Australasia
    1%

Geographically, the portfolio is heavily weighted towards North America (85.55%), with limited exposure to other regions such as Europe Developed (6.47%) and Japan (2.48%). This concentration in North American markets may limit the benefits of global diversification. Increasing exposure to international markets could provide additional growth opportunities and reduce the risk associated with any single geographic region. A more balanced geographic allocation could enhance overall portfolio resilience.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 0.98%

The portfolio includes dividend-focused ETFs like the Schwab U.S. Dividend Equity ETF and Vanguard High Dividend Yield Index Fund ETF Shares. These ETFs provide a steady income stream, contributing to the overall return. Dividend-paying stocks can also offer some downside protection during market declines. However, relying too heavily on dividends might limit growth potential. Balancing between growth and dividend-focused investments can provide a more comprehensive approach to achieving both income and capital appreciation.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, thanks to the inclusion of low-cost ETFs like the Vanguard S&P 500 ETF (0.03%) and Schwab U.S. Dividend Equity ETF (0.06%). Keeping costs low is crucial for maximizing net returns over the long term. This cost efficiency is one of the portfolio's strengths, allowing more of the investment returns to be retained by the investor. Continuously monitoring and minimizing expenses can significantly enhance overall portfolio performance.

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