A broadly diversified portfolio with strong U.S. focus and moderate risk profile

Report created on Mar 28, 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 is heavily weighted towards equities, with 99% in stocks and only 1% in cash. This structure aligns with a balanced risk profile, as equities offer growth potential but come with volatility. A significant 62.5% is invested in the Vanguard Total Stock Market Index Fund ETF, providing broad exposure to the U.S. market. The portfolio is complemented by international exposure through the Vanguard Total International Stock Index Fund ETF at 15%. This composition is well-aligned with a diversified strategy, but consider adding more asset classes like bonds to potentially reduce volatility and enhance stability.

Growth Info

With a historical CAGR of 13.97%, the portfolio has demonstrated strong growth. The maximum drawdown of -24.55% indicates periods of significant volatility, typical for equity-heavy portfolios. Compared to benchmarks, this performance is commendable, demonstrating the portfolio's resilience and growth potential. However, past performance doesn't guarantee future results. To manage future risks, consider maintaining a diversified mix and periodically rebalancing your portfolio to align with your risk tolerance and investment goals.

Projection Info

Monte Carlo simulations, which use historical data to predict potential future outcomes, show an impressive annualized return of 24.89% across simulations. The 5th percentile projects a 265.4% return, while the 50th percentile expects 1,529.2%. While these projections are optimistic, they are based on historical trends and assumptions. It's essential to remember that simulations cannot predict exact outcomes, and market conditions can change. Regularly review your portfolio to ensure it aligns with your goals and risk tolerance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's allocation is overwhelmingly in stocks, with 99% in equities. This focus on a single asset class can lead to higher potential returns but also increases exposure to market volatility. Comparing to benchmarks, the lack of fixed income or alternative investments may limit diversification benefits. To mitigate risk, consider incorporating bonds or other asset classes. This could provide stability during market downturns and ensure a more balanced risk-return profile, aligning with a more cautious investment strategy.

Sectors Info

  • Technology
    27%
  • Financials
    20%
  • Industrials
    13%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is sector-diverse, with technology (27%) and financial services (20%) leading the allocations. This is in line with common benchmarks but could lead to sector-specific risks. A tech-heavy portfolio may face higher volatility during interest rate hikes or regulatory changes. Balancing sector allocations can mitigate these risks. Consider monitoring sector trends and adjusting allocations to maintain diversification and reduce potential overexposure to any single sector.

Regions Info

  • North America
    85%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

With 85% exposure to North America, the portfolio is heavily U.S.-centric. This aligns with many investors' home bias but may limit global diversification. The remaining 15% is spread across developed and emerging markets, offering some international exposure. Comparing to benchmarks, this geographic allocation could benefit from more balance. Increasing exposure to non-U.S. markets may enhance diversification and reduce reliance on the U.S. economy. Consider exploring opportunities in underrepresented regions to broaden your global reach.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    32%
  • Mid-cap
    16%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio is diversified across market capitalizations, with 44% in mega-cap stocks and smaller allocations to big, medium, small, and micro caps. This distribution aligns with common benchmarks and offers a blend of stability and growth potential. Mega and big caps provide a solid foundation, while smaller caps offer higher growth prospects but with increased risk. Maintaining this balance helps capture various market opportunities. Consider reviewing the market cap allocation periodically to ensure it aligns with your risk tolerance and investment goals.

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 current portfolio can be optimized for a better risk-return ratio using the Efficient Frontier, which suggests the best possible allocation for given risk levels. While the optimal portfolio has an expected return of 35.53%, it comes with a higher risk level of 21.62%. Optimization involves reallocating existing assets to enhance returns without increasing risk. Regularly analyze your portfolio's efficiency and make adjustments to align with your risk tolerance and financial goals.

Dividends Info

  • Howmet Aerospace Inc 0.20%
  • Northrop Grumman Corporation 1.20%
  • Invesco NASDAQ 100 ETF 0.60%
  • Defiance Quantum 0.50%
  • Raytheon Technologies Corp 1.90%
  • Transdigm Group Incorporated 5.40%
  • Textron Inc 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.00%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.19%

The portfolio's dividend yield is 1.19%, with contributions from various holdings. Dividends can provide a steady income stream and contribute to total returns, especially in volatile markets. However, the yield is relatively modest, reflecting the growth-oriented nature of the portfolio. For investors seeking income, consider increasing exposure to higher-yielding assets. Balancing growth and income can enhance portfolio stability and provide additional cash flow.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Defiance Quantum 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, led by the Vanguard ETFs. Low costs are crucial for long-term performance, as they preserve returns. High costs can erode gains over time, making cost efficiency a key consideration. This portfolio's cost structure aligns well with best practices, supporting better returns. Regularly review expense ratios and seek opportunities to reduce costs further, ensuring they remain competitive and aligned with your investment strategy.

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