A balanced portfolio with a global focus and low cost structure

Report created on Feb 13, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed primarily of two funds: the Schwab International Index Fund (80%) and the Schwab Total Stock Market Index Fund (20%). This structure leans heavily towards international equities while maintaining some exposure to the U.S. market. The allocation provides broad diversification across sectors and geographies. Compared to typical benchmarks, this portfolio may have a higher international exposure, which can offer diversification benefits but also introduces currency risk. To enhance balance, consider adjusting the weightings to better align with a global benchmark, potentially increasing U.S. exposure for stability.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 8.02%, which is respectable for a balanced risk profile. The maximum drawdown of -33.68% highlights the potential downside during market downturns. Compared to benchmarks, this performance suggests moderate resilience and growth potential. Understanding these metrics helps set realistic expectations for future returns. To mitigate the impact of drawdowns, consider incorporating strategies such as periodic rebalancing or diversifying into less correlated asset classes like bonds or real estate.

Projection Info

Forward projections using Monte Carlo simulations indicate a 50th percentile end portfolio value of 249%, with a positive outcome in 969 out of 1,000 simulations. Monte Carlo simulations model various potential outcomes based on historical data, providing a range of possible future returns. However, it's important to note that these projections are not guarantees. To improve future performance, consider exploring additional asset classes or adjusting the current allocation to optimize risk-adjusted returns while keeping in mind that past performance does not predict future results.

Asset classes Info

  • Stocks
    99%

The portfolio is overwhelmingly invested in stocks, with 99% equity exposure and negligible allocations to cash, bonds, or other assets. While this concentration can drive growth, it also increases volatility. Typically, balanced portfolios include some fixed income to stabilize returns. Compared to benchmarks, this portfolio's equity-heavy nature may lead to higher short-term fluctuations. To enhance diversification, consider adding bonds or alternative investments, which can provide a buffer during equity market downturns and improve overall risk-adjusted returns.

Sectors Info

  • Financials
    19%
  • Industrials
    16%
  • Technology
    14%
  • Health Care
    12%
  • Consumer Discretionary
    10%
  • Consumer Staples
    8%
  • Telecommunications
    6%
  • Basic Materials
    5%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is fairly balanced, with significant exposure to Financial Services (19%), Industrials (16%), and Technology (14%). This composition aligns with common benchmarks, offering a diversified sector mix. However, the technology sector's high volatility can impact overall portfolio stability. It's crucial to monitor sector trends, as changes in interest rates or regulations can affect sector performance. To maintain balance, consider periodically reviewing sector weights and adjusting allocations as needed to ensure alignment with market conditions and investment goals.

Regions Info

  • Europe Developed
    51%
  • North America
    21%
  • Japan
    19%
  • Australasia
    6%
  • Asia Developed
    3%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards Europe Developed (51%) and Japan (19%), with only 21% in North America. This allocation provides international diversification but may expose the portfolio to currency and geopolitical risks. Compared to benchmarks, this represents a significant tilt away from the U.S. market. While international exposure can enhance growth opportunities, consider increasing North American holdings to stabilize returns and reduce potential risks associated with foreign markets. Regularly reassessing geographic allocations can help maintain an optimal balance.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    35%
  • Mid-cap
    12%
  • Small-cap
    1%

The portfolio is well-diversified across market capitalizations, with 49% in mega-cap, 35% in big-cap, and 12% in medium-cap stocks. This distribution aligns with benchmark norms, providing a blend of stability and growth potential. Mega-cap stocks offer stability, while medium-cap stocks can drive growth. The minimal exposure to small and micro-cap stocks may limit opportunities for higher returns. To enhance diversification, consider increasing exposure to smaller companies, which can provide additional growth potential and reduce reliance on large-cap performance.

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 could be optimized using the Efficient Frontier, potentially increasing expected returns from 10.57% to 13.22% with the same risk level. The Efficient Frontier represents the best possible risk-return ratio for a given set of assets. However, achieving this optimization may require reallocating current investments. It's important to understand that optimization is based on historical data and may not account for future market changes. To pursue optimization, consider consulting with a financial advisor to explore potential adjustments while maintaining alignment with personal risk tolerance and goals.

Dividends Info

  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 3.10%
  • Weighted yield (per year) 2.48%

The portfolio's dividend yield is 2.48%, with the Schwab International Index Fund contributing 3.10%. Dividends can provide a steady income stream and contribute to total returns, especially in volatile markets. This yield is competitive for an equity-heavy portfolio, offering some downside protection. Reinvesting dividends can enhance compounding over time. To maximize income, consider exploring high-dividend-paying sectors or funds. However, it's important to balance yield with growth potential, as high dividends can sometimes indicate slower growth prospects.

Ongoing product costs Info

  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 0.06%
  • SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 0.03%
  • Weighted costs total (per year) 0.05%

With a total expense ratio (TER) of 0.05%, this portfolio is cost-efficient, supporting better long-term returns. Low costs help maximize net returns by minimizing the drag on performance. Compared to industry averages, this TER is impressively low, indicating a well-managed cost structure. Regularly reviewing and minimizing portfolio costs is essential for enhancing long-term growth. Ensure that any changes to the portfolio maintain this cost efficiency, as higher fees can erode returns over time. Consider periodic cost assessments to sustain optimal performance.

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