A balanced portfolio with strong dividend focus and moderate geographic diversification

Report created on Dec 29, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed of four ETFs, with a focus on U.S. equities and real estate. It has a 30% allocation each to U.S. Dividend Equity and Large-Cap ETFs, 20% to an International Equity ETF, and 20% to a U.S. REIT ETF. This composition leans heavily toward equities, which is typical for a balanced portfolio. Compared to common benchmarks, this portfolio might have slightly less diversification due to its concentrated asset choices. Consider introducing more asset classes to enhance diversification and risk management.

Growth Info

Historically, the portfolio has shown a CAGR of 11.13%, indicating strong growth potential. However, it experienced a maximum drawdown of -35.34%, which highlights the risk during volatile markets. This performance is in line with equity-heavy portfolios, which tend to offer higher returns at the cost of increased volatility. To manage potential downturns, consider incorporating more defensive assets or strategies to mitigate risk while maintaining growth potential.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future outcomes based on historical data, show a median portfolio growth of 248.02%. The simulations indicate a wide range of possible outcomes, emphasizing the inherent uncertainty in forecasting. With 961 out of 1,000 simulations showing positive returns, the outlook is optimistic but not guaranteed. It's important to regularly reassess the portfolio to ensure it aligns with personal risk tolerance and market conditions.

Asset classes Info

  • Stocks
    80%
  • Real Estate
    20%

The portfolio's asset allocation is predominantly in stocks (approximately 80%) and real estate (20%), with minimal exposure to bonds and cash. This allocation aligns with a balanced risk profile, aiming for growth while providing some income stability through real estate. Compared to benchmark norms, the lack of bond exposure may increase volatility. Introducing more fixed-income assets could help stabilize returns, especially during market downturns.

Sectors Info

  • Real Estate
    21%
  • Technology
    15%
  • Financials
    14%
  • Health Care
    10%
  • Industrials
    9%
  • Consumer Discretionary
    9%
  • Consumer Staples
    7%
  • Energy
    6%
  • Telecommunications
    5%
  • Basic Materials
    2%
  • Utilities
    1%

Sector allocation is diversified, with significant exposure to real estate, technology, and financial services. These sectors are known for growth potential, but they can also be volatile, especially during economic shifts or interest rate changes. This allocation matches common benchmarks, suggesting a well-diversified approach. However, consider monitoring economic trends closely to adjust sector exposure as needed, ensuring alignment with market conditions and personal investment goals.

Regions Info

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

The portfolio's geographic exposure is heavily weighted towards North America (81.6%), with limited international diversification. This concentration may limit the benefits of global diversification, such as reducing risk through exposure to different economic cycles. While the U.S. market has historically performed well, consider increasing exposure to emerging markets or other regions to enhance diversification and capture global growth opportunities.

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 asset allocation can potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the weightings of existing assets to achieve an ideal balance between risk and return. While this optimization focuses on enhancing efficiency, it may not address diversification or other specific investment goals. Regularly review the allocation to ensure it remains aligned with personal objectives and market conditions.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.60%
  • Schwab International Equity ETF 2.00%
  • Schwab U.S. REIT ETF 2.10%
  • Schwab U.S. Large-Cap ETF 2.00%
  • Weighted yield (per year) 2.50%

With a total dividend yield of 2.5%, the portfolio provides a steady income stream, appealing to investors seeking regular cash flow. The Schwab U.S. Dividend Equity ETF is a significant contributor with a 3.6% yield. Dividends can help cushion against market volatility and provide a reliable income source. Ensure that the dividend strategy aligns with overall investment objectives, balancing income needs with growth potential.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Equity ETF 0.06%
  • Schwab U.S. REIT ETF 0.07%
  • Schwab U.S. Large-Cap ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, supporting better long-term performance by minimizing costs. Low fees are crucial as they help maximize net returns over time. This cost efficiency is a positive aspect, aligning with best practices in portfolio management. Continue to monitor and compare fees to ensure they remain competitive, potentially exploring even lower-cost options if available.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey