A broadly diversified portfolio with a cautious risk profile and low costs

Report created on Apr 8, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio comprises 48% in a global stock ETF, 40% in a bond ETF, and smaller allocations to a tech-focused ETF and individual stocks. The composition leans towards stocks, with a significant bond component to balance risk. Comparing this to a typical balanced portfolio, which often holds around 60% stocks and 40% bonds, this portfolio is slightly more conservative. The inclusion of both global equities and bonds provides a solid foundation for diversification, which is crucial for risk management. To ensure the portfolio aligns with your investment goals, consider periodically reviewing the asset allocation, especially if personal circumstances or market conditions change.

Growth Info

Historically, this portfolio has achieved a 5.42% CAGR, indicating steady growth over time. The maximum drawdown of -23.15% reflects the portfolio's potential vulnerability during market downturns, but it's relatively moderate compared to more aggressive portfolios. The concentration of returns in just 11 days highlights the importance of staying invested to capture these gains. While past performance is not a predictor of future results, understanding these trends can help set realistic expectations. Regularly reviewing performance against personal benchmarks can ensure the portfolio continues to meet your risk and return objectives.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns, with a median outcome of 364% growth. This method helps visualize possible scenarios, but it's important to remember that simulations rely on past data and assumptions. The positive results in 988 of 1,000 simulations indicate a high likelihood of favorable outcomes, though not guaranteed. Regularly updating simulations with the latest data can provide more accurate projections. Maintaining a diversified and balanced portfolio can help navigate uncertainties and adapt to changing market conditions.

Asset classes Info

  • Stocks
    59%
  • Bonds
    40%
  • Cash
    1%

The portfolio's allocation consists of 59% stocks and 40% bonds, with a small cash position. This mix provides a balance between growth and income, aligning well with a cautious risk profile. Compared to typical benchmarks, which often have a higher stock allocation, this portfolio's bond component offers a buffer against volatility. Diversification across asset classes is essential for managing risk and achieving consistent returns. Periodically reassessing the allocation can ensure it remains aligned with your risk tolerance and financial goals, especially as market conditions or personal circumstances evolve.

Sectors Info

  • Technology
    15%
  • Financials
    14%
  • Consumer Discretionary
    6%
  • Industrials
    5%
  • Health Care
    5%
  • Telecommunications
    5%
  • Consumer Staples
    3%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector-wise, the portfolio is well-diversified, with significant exposure to technology and financial services, followed by consumer cyclicals and industrials. This sectoral mix provides a balance between growth and stability, though the tech concentration may lead to increased volatility during market fluctuations. Aligning sector allocation with broader market indices can help manage sector-specific risks. Regularly reviewing sector performance and adjusting allocations as needed can ensure the portfolio remains well-positioned to capitalize on evolving market trends and opportunities.

Regions Info

  • North America
    44%
  • Europe Developed
    7%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, with smaller allocations to Europe and Asia. This focus on developed markets provides stability and aligns with the cautious risk profile. However, the limited exposure to emerging markets may restrict growth potential. Comparing this allocation to global benchmarks, which often have a broader geographic spread, can highlight potential areas for diversification. Increasing exposure to emerging markets could enhance growth prospects, though it may also introduce additional risk. Regularly reviewing geographic allocation can help balance these factors.

Market capitalization Info

  • Mega-cap
    29%
  • Large-cap
    17%
  • Mid-cap
    10%
  • Small-cap
    3%

The portfolio's market capitalization exposure is concentrated in mega and big-cap stocks, with limited small-cap exposure. This focus on larger companies provides stability and aligns with the cautious risk profile, as these firms tend to be more resilient during economic downturns. However, small-cap stocks can offer higher growth potential, albeit with increased risk. Comparing this allocation to market benchmarks can highlight areas for potential diversification. Introducing more small-cap exposure could enhance growth prospects, though it should be balanced with risk tolerance and investment objectives.

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 shows potential for optimization via the Efficient Frontier, which aims to achieve the best possible risk-return ratio. This involves adjusting the current asset allocation to enhance efficiency without necessarily increasing diversification. The Efficient Frontier helps identify the optimal mix of assets, balancing risk and return. Regularly reviewing the portfolio's position relative to the Efficient Frontier can ensure it remains aligned with your financial goals. Adjusting allocations as needed can help maintain an optimal balance, maximizing returns for a given level of risk.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.40%
  • JPMorgan Chase & Co 1.70%
  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 2.51%

The portfolio's dividend yield stands at 2.51%, with contributions from both stock and bond holdings. Dividends provide a steady income stream, which can be particularly appealing in a low-interest-rate environment. This yield aligns with a cautious risk profile, offering a balance between income and growth. Regularly reviewing dividend yields and assessing their sustainability can ensure the portfolio continues to meet income needs. Reinvesting dividends can enhance long-term growth, while maintaining a focus on quality dividend-paying assets can provide stability.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, reflecting the use of cost-effective ETFs. Low costs are crucial for maximizing long-term returns, as they reduce the drag on performance. This aligns well with best practices in portfolio management, ensuring more of your money stays invested. Regularly reviewing and comparing fund expenses can help maintain this advantage. Considering the impact of fees on net returns, ensuring the continued use of low-cost investment vehicles can support better financial outcomes.

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