A balanced portfolio with a strong focus on US and international equities

Report created on Aug 1, 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 structured with a 75% allocation in the Vanguard Total Stock Market Index Fund Admiral Shares and a 25% allocation in the Vanguard Total International Stock Index Fund Admiral Shares. This composition reflects a strategic emphasis on equities, with a significant leaning towards the US market. The allocation across just two funds simplifies management while providing broad exposure to global equities, aligning well with a balanced risk profile. However, the concentration in stocks suggests a higher risk tolerance than more conservative portfolios that might include bonds or other asset classes.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.39%, with a maximum drawdown of -34.67%. These figures indicate robust growth potential tempered by significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of the returns being concentrated in just 28.0 days highlight the portfolio's susceptibility to short-term market movements. Comparing this performance to benchmarks can help contextualize these results, suggesting the portfolio is capable of strong returns but not without considerable risk.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, show a wide range of outcomes for this portfolio. With 984 out of 1,000 simulations resulting in positive returns, the projections are generally optimistic. However, the broad spread between the 5th and 67th percentiles underscores the uncertainty inherent in these predictions. It's crucial to remember that while Monte Carlo simulations can provide valuable insights, they are inherently speculative and cannot account for unforeseen market changes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily weighted towards stocks (99%), with a minimal cash reserve (1%). This allocation supports the portfolio's growth objectives but also increases its vulnerability to market fluctuations. Diversification across different asset classes could mitigate some of this risk, potentially smoothing out returns over time. For investors with a balanced risk profile, incorporating bonds or alternative investments could offer a more stable return profile.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

With sector allocations spanning technology (27%), financial services (16%), and industrials (11%), among others, the portfolio is well-diversified within the equity space. The heavy weighting in technology and financial services mirrors broader market trends but also exposes the portfolio to sector-specific risks. Diversifying further across sectors, or rebalancing to reduce concentration in any one sector, could help manage these risks.

Regions Info

  • North America
    77%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic distribution is predominantly in North America (77%), with smaller allocations across developed Europe (10%), Asia, and other regions. This geographic allocation supports diversification but leans heavily on the performance of the US market. Expanding exposure to emerging markets or underrepresented regions could enhance diversification benefits and potentially tap into higher growth rates outside the US.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's emphasis on mega (42%) and big (31%) cap stocks provides stability and reflects an investment in well-established companies. However, the relatively smaller allocation to medium, small, and micro-cap stocks limits exposure to higher-growth potential segments. Increasing the allocation to smaller cap stocks could introduce more growth opportunities, albeit with higher volatility.

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 suggests a portfolio positioned on the Efficient Frontier, indicating an optimal risk-return balance based on historical data. However, it's important to note that this balance is dynamic and requires periodic reevaluation to account for changing market conditions and investment objectives. Adjustments may be necessary to maintain this optimal positioning, especially as the investor's risk tolerance or financial goals evolve.

Dividends Info

  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 2.10%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.90%
  • Weighted yield (per year) 1.20%

The portfolio's dividend yield, averaging 1.20%, contributes to its total return. While not the primary focus, dividends offer a steady income stream and can provide a cushion during market dips. For investors seeking higher income, reallocating towards assets or sectors with higher dividend yields could be beneficial, though it's essential to balance yield-seeking with growth and risk considerations.

Ongoing product costs Info

  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 0.09%
  • Vanguard Total Stock Market Index Fund Admiral Shares 0.04%
  • Weighted costs total (per year) 0.05%

With a total expense ratio (TER) of 0.05%, the portfolio benefits from low costs, enhancing long-term returns. Vanguard's reputation for low-cost funds is reflected here, providing an efficient way to access broad market exposure. Maintaining a focus on low-cost investments remains a prudent strategy, especially in a broadly diversified portfolio where costs can easily accumulate.

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