A balanced and broadly diversified portfolio with a strong emphasis on stocks for long-term growth
Report created on Jul 8, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 72.86% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 27.14%
The portfolio is primarily composed of two ETFs: Vanguard Total Stock Market Index Fund ETF Shares, making up 72.86%, and Vanguard Total International Stock Index Fund ETF Shares, comprising 27.14%. This allocation demonstrates a strategic emphasis on a broad exposure to both U.S. and international stocks, aiming for a balanced yet growth-oriented investment approach. The simplicity of this two-ETF strategy underscores its appeal for investors seeking diversified exposure without the complexity of managing numerous individual assets.
Growth
With a Compound Annual Growth Rate (CAGR) of 12.13% and a maximum drawdown of -34.63%, the portfolio's historical performance showcases resilience and the potential for robust growth over time. The days contributing to 90% of returns being limited to 26 indicates that a few key periods have driven the majority of gains, a common characteristic in equity markets. This performance, coupled with the portfolio's balanced risk classification, suggests a well-calibrated approach to achieving long-term growth within a moderate risk framework.
Projection
Monte Carlo simulations, based on 1,000 trials, project a wide range of outcomes with a median increase of 256.3%. Notably, 967 simulations resulted in positive returns, reinforcing the portfolio's potential for growth. However, it's important to remember that these projections are based on historical data and assumptions, making them useful for planning but not guarantees of future performance.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's almost exclusive investment in stocks (99%) with a minimal cash holding (1%) aligns with its growth-oriented strategy. This asset class allocation supports higher potential returns over the long term, albeit with increased volatility compared to more conservative portfolios that include bonds or other fixed-income assets. The absence of alternative investments or fixed income highlights a clear focus on capital appreciation through equity markets.
Sectors
- Technology 25%
- Financials 17%
- Industrials 11%
- Health Care 10%
- Consumer Discretionary 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 3%
- Real Estate 3%
- Utilities 3%
The sectoral allocation reveals a significant emphasis on technology (25%) and financial services (17%), followed by industrials, healthcare, and consumer cyclicals. This sector distribution is reflective of the broader market composition, particularly in the U.S., and suggests a portfolio well-positioned to benefit from growth in these dominant sectors. However, the concentration in technology and financial services may introduce sector-specific risks, warranting periodic review.
Regions
- North America 75%
- Europe Developed 11%
- Asia Emerging 4%
- Japan 4%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographic allocation underscores a strong preference for North American equities (75%), complemented by diversified international exposure, including developed Europe and emerging Asian markets. This geographic spread enhances the portfolio's diversification, mitigating risks associated with regional economic downturns or geopolitical events. However, the relatively low exposure to emerging markets might limit potential gains from these high-growth areas.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 19%
- Small-cap 6%
- Micro-cap 2%
The portfolio's market capitalization breakdown—42% mega, 30% big, 19% medium, 6% small, and 2% micro—indicates a conservative tilt towards larger, more established companies. This bias towards mega and big cap stocks may contribute to stability and lower volatility, but it could also limit exposure to the potentially higher growth rates of smaller companies.
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 optimized balance between risk and return based on historical data. However, investors should regularly reassess their allocations, considering changes in market conditions and personal investment goals. While the portfolio demonstrates efficiency in its present form, dynamic adjustments can further align it with evolving risk tolerance and financial objectives.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.63%
The portfolio's dividend yield, averaging 1.63%, contributes to its total return, providing a steady income stream in addition to potential capital gains. The higher yield from the international ETF (2.80%) compared to the U.S. ETF (1.20%) highlights the benefit of including global equities for income-focused investors. Dividends can offer a cushion during market volatility, underscoring their role in a balanced investment strategy.
Ongoing product costs
- 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) 0.04%
With a total expense ratio (TER) of 0.04%, the portfolio stands out for its cost efficiency, a crucial factor in enhancing long-term returns. Low costs ensure that a greater portion of the investment returns are retained by the investor, rather than being eroded by fees. This efficiency is especially beneficial in a portfolio focused on broad market exposure through ETFs.
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