A broadly diversified cautious portfolio with a strong focus on North American equities

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Cautious Investors

This portfolio suits an investor with a cautious risk tolerance seeking growth through a diversified equity focus. It is ideal for those with a medium to long-term investment horizon, aiming to build wealth while managing risk. The portfolio's broad sector and geographic exposure provide a balanced approach, making it suitable for individuals looking to capitalize on equity market opportunities while maintaining a conservative stance.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    60.00%
  • Avantis ALL Equity Markets Value ETF
    AVGV - US0250722164
    20.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    10.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    10.00%

This portfolio is composed primarily of equity ETFs, with a significant 60% allocation to the Vanguard Total Stock Market Index Fund ETF. The inclusion of the Avantis ALL Equity Markets Value ETF and Avantis U.S. Small Cap Value ETF provides additional exposure to value stocks and small-cap stocks, respectively. The Vanguard Total International Stock Index Fund ETF rounds out the portfolio with international diversification. Compared to a typical benchmark, this portfolio is heavily weighted towards equities, which aligns with a growth-oriented strategy, albeit with a cautious risk profile. Consider reviewing the allocation to ensure it matches your risk tolerance and investment goals.

Warning The historical data covers less than 2 years, which reduces the confidence in the calculated values.

Growth Info

Historically, the portfolio has exhibited strong performance with a Compound Annual Growth Rate (CAGR) of 17.47%, significantly outperforming many standard benchmarks. This impressive growth is tempered by a maximum drawdown of -11.00%, indicating some volatility during downturns. Notably, the majority of returns were concentrated in just 15 days, underscoring the importance of staying invested to capture these gains. While past performance is no guarantee of future results, maintaining a long-term perspective can help navigate market fluctuations and capitalize on potential growth.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns for this portfolio. With 1,000 simulations, the portfolio's end value at the 5th percentile is 188.2%, while the median (50th percentile) is 646.6%. All simulations show positive returns, with an annualized return of 16.23%. While these projections provide a useful framework, it's important to remember that they are based on historical trends and assumptions that may not hold true in the future. Regularly reviewing and adjusting your portfolio can help manage risks and align with your evolving goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%
  • Bonds
    0%

The portfolio is heavily invested in stocks, comprising 99% of the total allocation, with a minimal cash position of 1%. This concentration in equities suggests a focus on growth, which can offer higher returns but also comes with increased volatility. Compared to a more balanced portfolio that includes bonds or other asset classes, this allocation may be less suitable for investors seeking income or stability. Consider diversifying further by incorporating bonds or alternative asset classes to reduce risk and enhance overall portfolio resilience.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Consumer Discretionary
    13%
  • Industrials
    12%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    6%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector-wise, the portfolio is diversified across various industries, with a notable 23% allocation in technology, followed by financial services at 18%. This sectoral distribution aligns with common benchmarks, providing exposure to both growth and value sectors. However, the tech-heavy allocation may lead to increased volatility, particularly during periods of interest rate hikes or regulatory changes. To mitigate sector-specific risks, consider periodically reviewing sector weights and adjusting as needed to maintain a balanced and diversified exposure.

Regions Info

  • North America
    83%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, with 83% of assets allocated to the region. This heavy concentration may limit exposure to international markets, potentially missing out on growth opportunities abroad. While the portfolio includes some diversification with holdings in Europe and Asia, consider increasing allocations to emerging markets or other underrepresented regions. This can enhance diversification, reduce reliance on any single market, and potentially improve risk-adjusted returns over the long term.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    26%
  • Mid-cap
    20%
  • Small-cap
    13%
  • Micro-cap
    8%

The portfolio's market capitalization allocation is well-distributed, with 32% in mega-cap stocks and significant exposure to big, medium, and small caps. This spread offers a blend of stability and growth potential, as mega-cap stocks tend to be more stable while smaller companies may offer higher growth prospects. The inclusion of micro-cap stocks at 8% further diversifies the portfolio, albeit with increased risk. This balanced approach aligns with diversification best practices, providing a strong foundation for capturing opportunities across different company sizes.

Dividends Info

  • Avantis ALL Equity Markets Value ETF 1.10%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.49%

The portfolio offers a moderate dividend yield of 1.49%, with contributions from all ETFs. Dividends can provide a steady income stream and enhance total returns, particularly in a low-interest-rate environment. While the primary focus of this portfolio is growth, dividends can add a layer of stability and income. Consider assessing the role of dividends in your investment strategy and whether increasing dividend-focused holdings could align with your income needs and risk tolerance.

Ongoing product costs Info

  • Avantis ALL Equity Markets Value ETF 0.26%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • 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) 0.10%

The portfolio's total expense ratio (TER) is an impressively low 0.10%, with individual ETF costs ranging from 0.03% to 0.26%. Low costs are a key factor in improving long-term returns, as they minimize the drag on performance. This efficient cost structure aligns well with best practices for cost management in investing. To maintain this advantage, regularly review expense ratios and consider lower-cost alternatives if available, ensuring that you continue to maximize net returns.

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.

Optimizing the portfolio using the Efficient Frontier involves adjusting the asset mix to achieve the best possible risk-return ratio. Currently, the portfolio's allocation appears well-aligned with its cautious risk profile, but there may be room for improvement. Consider exploring different asset combinations or rebalancing to ensure you're achieving the optimal balance between risk and return. This process can help enhance portfolio efficiency, potentially leading to better long-term outcomes.

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