Balanced and broadly diversified portfolio with a focus on major market ETFs and global exposure

Report created on May 29, 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 structured around three Vanguard ETFs, with a significant emphasis on the S&P 500 ETF (50%), followed by the Total International Stock Index Fund ETF Shares (35%) and the Extended Market Index Fund ETF Shares (15%). This composition showcases a strategic allocation that leans heavily towards large-cap U.S. equities while ensuring substantial international exposure and access to smaller U.S. companies. The allocation reflects a balanced approach, aiming to capture growth in both domestic and international markets, with a diversification that spans across major sectors and geographic regions.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.94%, with a maximum drawdown of -34.89%. This performance indicates a resilient growth trajectory, despite the inevitable market downturns. The days contributing to 90% of the returns being so few underscores the importance of staying invested over the long term, as major gains can be concentrated in short, unpredictable periods. This historical performance, while indicative of past success, should be viewed as a guide rather than a guarantee for future returns.

Projection Info

Using a Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a median growth of 252.8% over the simulation period. While the 5th percentile outcome indicates a slight decline, the majority of simulations (949 out of 1,000) resulted in positive returns, with an annualized return rate of 11.17% across all simulations. This suggests a strong likelihood of positive future performance, though it's important to remember that these projections cannot guarantee future results.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash holding (1%). This high equity exposure is typical for growth-oriented portfolios but comes with higher volatility and risk. The absence of other asset classes like bonds or commodities means there's less cushion against stock market fluctuations, making it crucial for investors to be comfortable with short-term ups and downs in pursuit of long-term gains.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    12%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation within the portfolio is broadly diversified, with technology (23%) and financial services (18%) being the most prominent. This sector distribution is reflective of the broader market trends, especially considering the weight of tech and finance in global economies. However, the concentration in these sectors could lead to increased volatility, as they are often more sensitive to economic changes. Diversifying across sectors can help mitigate this risk, and the portfolio seems to balance this well with investments in industrials, consumer cyclicals, and healthcare.

Regions Info

  • North America
    67%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America (67%), with meaningful allocations to developed Europe (14%) and emerging Asian markets (6%). This global distribution helps mitigate the risk of regional economic downturns and capitalizes on growth opportunities worldwide. However, the underrepresentation of emerging markets outside of Asia might limit exposure to high-growth regions, potentially affecting the portfolio's overall growth prospects.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    28%
  • Mid-cap
    20%
  • Small-cap
    9%
  • Micro-cap
    3%

The market capitalization breakdown shows a strong tilt towards mega (39%) and big (28%) cap stocks, with medium, small, and micro caps making up the rest. This skew towards larger companies is typical for portfolios aiming for stability and lower volatility, as these firms are usually more established and financially robust. However, the inclusion of smaller caps, albeit limited, introduces growth potential and diversification benefits.

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 allocation demonstrates a balanced approach on the Efficient Frontier, aiming for an optimal risk-return ratio based on historical performance and asset allocation. While the portfolio is already well-optimized for a balanced investor profile, continual review and adjustment in response to changing market conditions and personal financial goals are essential for maintaining this optimization.

Dividends Info

  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Extended Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.84%

The dividend yields from the ETFs contribute to the portfolio's total yield of 1.84%, with the Total International Stock Index Fund ETF Shares offering the highest yield at 2.90%. Dividends provide a steady income stream and can offer some cushion during market downturns. For investors prioritizing income or looking to reinvest dividends for compound growth, this yield is a crucial component of the portfolio's total return.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Extended Market Index Fund ETF Shares 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With an overall expense ratio of 0.04%, the portfolio benefits from exceptionally low costs, maximizing the potential for net returns. Low costs are vital over the long term, as they can significantly impact compound growth. This efficiency is a testament to the cost-effectiveness of investing in ETFs, particularly those offered by Vanguard, known for their investor-friendly fee structures.

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