A balanced portfolio with global exposure and strong sector diversification

Report created on Apr 8, 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 primarily composed of ETFs and individual stocks, with a large portion (85%) allocated to the Vanguard Total World Stock Index Fund ETF Shares. The remaining 15% is split between Berkshire Hathaway, JPMorgan Chase & Co, and the Invesco NASDAQ 100 ETF. This composition provides broad market exposure, mirroring global equity trends. Comparing this to a typical balanced benchmark, the high allocation to a single ETF suggests a strategic focus on broad market performance, which can be beneficial for capturing general market growth. Consider diversifying further into different asset types like bonds to reduce volatility and enhance long-term stability.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.69%, which is commendable. This indicates that, on average, the portfolio has grown at this rate annually over a specified period. However, the maximum drawdown of -26.52% highlights potential vulnerability during market downturns. It’s essential to understand that past performance does not guarantee future results, but historical data can provide insights into how the portfolio might respond to market changes. Consider strategies like dollar-cost averaging to mitigate the impact of volatility over time.

Projection Info

Forward projections using Monte Carlo simulations suggest a positive outlook, with the 50th percentile projecting a 635.4% increase in portfolio value. Monte Carlo simulations use historical data to model potential future outcomes, offering a range of possibilities rather than a single prediction. While the simulations show promising results, it's important to remember that they are based on historical trends and assumptions that may not hold in the future. Regularly revisiting and adjusting your portfolio can help align it with changing market conditions and personal goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% of assets in equities and only 1% in cash. This allocation aligns with a higher risk tolerance, as equities typically offer higher returns but also come with greater volatility. Compared to a balanced benchmark, this portfolio leans more aggressively towards stocks. To enhance diversification and reduce risk, consider incorporating other asset classes such as bonds or real estate, which can provide stability and income during market fluctuations.

Sectors Info

  • Financials
    25%
  • Technology
    23%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is well-distributed, with significant exposure to Financial Services (25%) and Technology (23%). These sectors are known for their growth potential but can also be volatile. A diversified sector allocation can help mitigate risks associated with sector-specific downturns. However, it's important to monitor sector trends, as shifts in economic conditions can impact sector performance. For instance, tech-heavy portfolios may experience higher volatility during periods of rising interest rates. Consider periodically rebalancing to maintain a balanced sector exposure.

Regions Info

  • North America
    71%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (71%), with smaller allocations to Europe and Asia. This concentration reflects a bias towards developed markets, which can offer stability but may limit exposure to the growth potential of emerging markets. Geographical diversification can help reduce risks associated with regional economic downturns. Consider increasing exposure to emerging markets, which can provide opportunities for growth and enhance overall portfolio diversification.

Market capitalization Info

  • Mega-cap
    49%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio is primarily invested in large-cap stocks, with 49% in mega caps and 28% in big caps. This focus on large companies can provide stability and consistent returns, as these companies tend to be more established and less volatile. However, the limited exposure to small and micro-cap stocks may reduce potential for higher growth. Small-cap stocks can offer significant growth opportunities, albeit with higher risk. Consider diversifying across market capitalizations to balance growth potential and stability.

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 can be optimized using the Efficient Frontier, which suggests a more efficient allocation with an expected return of 20.62% at the same risk level. The Efficient Frontier represents the best possible risk-return ratio for a given set of assets. While optimization can enhance returns, it's important to consider transaction costs and potential tax implications. Regularly assess your portfolio's alignment with the Efficient Frontier to ensure it remains optimized for your risk tolerance and investment objectives.

Dividends Info

  • 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) 1.99%

The portfolio's dividend yield is 1.99%, with contributions from JPMorgan Chase, Invesco NASDAQ 100 ETF, and Vanguard Total World Stock Index Fund ETF Shares. Dividends provide a steady income stream and can enhance total returns, especially in low-growth environments. For income-focused investors, maintaining a healthy dividend yield is crucial. Consider reinvesting dividends to compound growth or using them as a source of income, depending on your investment strategy and financial needs.

Ongoing product costs Info

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

The portfolio's total expense ratio (TER) is 0.07%, which is impressively low. Low costs are beneficial for long-term performance, as they minimize the drag on returns. The inclusion of low-cost ETFs like Vanguard Total World Stock Index Fund ETF Shares contributes to this efficiency. Keeping costs low is a key factor in maximizing net returns over time. Regularly review the expense ratios of your investments to ensure they remain competitive and aligned with your financial goals.

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