Globally diversified two fund stock portfolio with strong efficiency and impressively low ongoing costs
Report created on Jun 4, 2024Risk profile
4/7
Diversification profile
4/5
Positions
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VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 50.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 50.00%
This portfolio is built from just two broad stock index ETFs split 50/50 between domestic and international markets. That means every dollar is evenly shared between the home market and the rest of the world, creating a simple but powerful structure. A setup like this is easy to manage and naturally self-diversified across thousands of companies without having to track many line items. The key implication is that most outcomes will be driven by global stock markets overall, not by individual picks. For someone who wants straightforward growth exposure without complexity, this clean two-fund build is a very solid foundation.
Growth
Historically, $1,000 grew to about $2,873 over ten years, a compound annual growth rate (CAGR) of 11.16%. CAGR is like your “average speed” over the whole trip, smoothing out the bumps. The portfolio slightly lagged the US market but basically matched the global market, which fits a 50/50 US–international mix. The worst peak‑to‑trough fall (max drawdown) was about -34%, very similar to the benchmarks, showing you’re taking normal equity-level risk. The fact that returns are close to global market data is a strong sign the portfolio is behaving as intended: broad, market-like growth with no big hidden bets.
Asset classes
- Stocks 100%
All of the money is in stocks, with 0% in bonds, cash, or alternatives. That creates a very growth‑oriented profile, since stocks historically have higher returns but larger short‑term swings than safer assets. From an asset‑class perspective, this matches many global equity benchmarks, which is excellent for capturing long‑run growth but means the ride can be bumpy, especially during recessions or market panics. For someone comfortable with meaningful ups and downs and a multi‑year horizon, this is perfectly reasonable. Those wanting smoother account balances or near‑term withdrawals would usually mix in some bonds, but as a pure stock engine, this allocation is clear and intentional.
Sectors
- Technology 24%
- Financials 17%
- Industrials 13%
- Consumer Discretionary 10%
- Health Care 9%
- Telecommunications 7%
- Consumer Staples 5%
- Basic Materials 5%
- Energy 4%
- Utilities 3%
- Real Estate 3%
Sector exposure is nicely spread, with technology the largest slice around a quarter, followed by meaningful chunks in financials, industrials, consumer areas, and health care. This looks very similar to typical global equity benchmarks, which is a strong indicator of healthy diversification. A tech tilt can boost growth when innovation is rewarded but may feel more volatile during rising interest rate periods or when growth stocks fall out of favor. Because no single sector dominates excessively and you also hold defensive areas like consumer staples and utilities, the portfolio is positioned to participate across many parts of the economy rather than betting on one theme.
Regions
- North America 54%
- Europe Developed 18%
- Japan 8%
- Asia Developed 7%
- Asia Emerging 7%
- Australasia 2%
- Africa/Middle East 2%
- Latin America 1%
Geographically, the portfolio is roughly half North America with the rest spread across Europe, Japan, developed Asia, emerging Asia, and smaller allocations to other regions. This is much closer to global market weights than a typical US‑only portfolio, which is a real diversification strength. It helps reduce reliance on any single economy, currency, or political system. When one region struggles, others may hold up better, softening the blow. At the same time, it means you won’t fully match a US‑only benchmark in years when the domestic market strongly outperforms. Overall, this global mix is well‑balanced and aligns closely with broad international standards.
Market capitalization
- Mega-cap 44%
- Large-cap 30%
- Mid-cap 18%
- Small-cap 5%
- Micro-cap 1%
Market cap exposure leans heavily toward mega‑ and large‑cap companies, with smaller positions in mid, small, and micro caps. That’s exactly what you’d expect from total‑market, cap‑weighted index funds, where the biggest companies naturally take up more space. Large firms tend to be more stable and liquid, while smaller ones can be more volatile but offer different growth patterns. Having some exposure across the full size spectrum improves diversification without overcommitting to riskier small caps. The result is a market‑like profile where most behavior is driven by established giants, with a useful “spice” of smaller companies to broaden potential return drivers.
True holdings
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NV NVIDIA Corporation 3.09%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 2.95%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 2.21%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 1.71%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
-
AM Amazon.com Inc 1.53%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 1.37%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 1.14%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 1.08%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 1.07%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
TS Tesla Inc 0.86%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 16.99%
Looking through the ETFs, the biggest underlying exposures are the usual global heavyweights like NVIDIA, Apple, Microsoft, and Taiwan Semiconductor. Each of these shows up via the index funds, not as separate picks, which creates some overlap but is entirely standard for cap-weighted indexing. Because many stocks beyond the top 10 aren’t shown, true overlap is actually more spread out than the numbers suggest. This pattern means performance will feel familiar to anyone following big global companies, but no single stock dominates the portfolio. It’s a classic example of broad indexing where concentration risk at the company level is kept very manageable.
Factors
Factor exposure is very balanced across value, size, momentum, quality, and yield, sitting close to neutral levels. Factor exposure describes how much the portfolio leans into certain traits that research has tied to long‑term returns, like cheapness (value) or consistency (quality). The only notable tilt is a mild lean toward low volatility, meaning the holdings are slightly less jumpy than the broad market on average. This can help cushion some downside in rough markets, though it won’t remove equity risk. Overall, the portfolio looks like a textbook “market portfolio” from a factor perspective, which is a strong sign of broad, diversified construction.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 50.00% 51.8% -
Vanguard Total International Stock Index Fund ETF Shares
Weight: 50.00% 48.2%
Risk contribution shows how much each holding adds to total portfolio ups and downs, which can differ from its weight. Here, each ETF is about half the portfolio and contributes a very similar share of risk, around 52% and 48%. That close match means there’s no single position silently dominating volatility behind the scenes. It also signals that domestic and international stocks are playing roughly equal roles in driving overall swings. When risk contribution lines up this cleanly with weights, rebalancing decisions become straightforward: any future tilt toward one fund mainly shifts both allocation and risk in tandem without hidden surprises.
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.
On the risk‑return chart, the current portfolio sits right on or very near the efficient frontier using only these two funds. The efficient frontier represents the best possible trade‑off between risk and expected return given the available holdings. Your Sharpe ratio of 0.58 matches the minimum‑variance portfolio, while the max‑Sharpe mix would take slightly more risk for higher expected returns. Because the current allocation is already efficient, there’s no clear need to change weights just to “fix” the risk‑return profile. Any adjustment would mainly reflect a preference for either slightly more return and risk or slightly more calm at a very similar efficiency level.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 3.00%
- Weighted yield (per year) 2.10%
The blended dividend yield is about 2.1%, coming from roughly 1.2% on the domestic side and 3.0% internationally. Dividend yield is the cash income paid out annually relative to the portfolio’s value, like rent from owning businesses. For a stock‑only allocation, this is a reasonable, moderate income stream. It can help slightly cushion downturns and provide some cash for reinvestment or withdrawals. Over long horizons, reinvested dividends can be a major component of total return, especially in international markets where payout ratios are often higher. This yield level fits well with a growth‑oriented but not purely speculative equity 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%
Total ongoing costs, measured by the Total Expense Ratio (TER), average around 0.04% per year. TER is the annual fee charged by the funds to cover management and operations, quietly deducted inside the ETF. This cost level is impressively low and firmly in best‑in‑class territory. Over decades, keeping fees this low can add many thousands of dollars to your outcome compared with higher‑cost products, because less drag compounds over time. The fact that you’re essentially capturing global market returns while paying almost nothing in fees is a major structural advantage and strongly supports better long‑term performance.
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