A broadly diversified portfolio with a strong focus on U.S. equities and technology

Report created on Mar 28, 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 heavily weighted towards U.S. equities, with the Vanguard Total Stock Market Index Fund Admiral Shares making up nearly 59% of the allocation. This fund provides comprehensive exposure to the U.S. market, complemented by the Vanguard Total World Stock Index Fund ETF Shares at 33%, which adds a global dimension. The Vanguard Total International Stock Index Fund Admiral Shares, at 6%, broadens international exposure. This structure aligns well with a balanced profile, but the concentration in U.S. equities may limit diversification benefits. Consider potential adjustments to achieve a more globally balanced allocation while maintaining alignment with investment goals.

Growth Info

Historically, the portfolio has performed strongly, with a Compound Annual Growth Rate (CAGR) of 12.52%. This robust performance outpaces many benchmarks, offering impressive growth for investors over time. However, the portfolio also experienced a maximum drawdown of -38.55%, indicating significant volatility during downturns. While past performance is not indicative of future results, it suggests a capacity for both high returns and risk. Investors should be prepared for potential fluctuations and consider strategies to mitigate downside risks, such as diversifying further or incorporating defensive assets.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential returns. With 1,000 simulations, the portfolio's 5th percentile outcome is 173.3%, while the 67th percentile reaches 2,786.2%. The median projection is 1,662.1%, highlighting substantial growth potential. However, these projections are based on historical trends and assumptions, which may not hold in the future. Investors should use these projections as a guide rather than a guarantee and consider stress-testing their portfolios against different market scenarios to understand potential risks.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is predominantly invested in stocks, accounting for 99% of the allocation, with a minimal 1% in cash. This high equity exposure is typical for growth-oriented portfolios, offering potential for substantial returns but also increased volatility. The lack of diversification into other asset classes, such as bonds or alternative investments, could expose the portfolio to market fluctuations. Investors might consider diversifying into other asset classes to enhance stability and reduce overall risk, especially during market downturns.

Sectors Info

  • Technology
    29%
  • Financials
    15%
  • Health Care
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Discretionary
    7%
  • Consumer Staples
    5%
  • Consumer Discretionary
    4%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The portfolio's sector allocation is heavily tilted towards technology, comprising 29% of the holdings. This concentration aligns with recent market trends favoring tech but may increase volatility, especially during interest rate hikes. Financial services and healthcare also have significant allocations at 15% and 10%, respectively, providing some sectoral balance. While the sector composition aligns with benchmark data, investors should be aware of potential sector-specific risks and consider rebalancing to achieve a more even distribution across sectors.

Regions Info

  • North America
    83%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is highly concentrated in North America, with 83% of assets allocated there. This focus provides strong exposure to the U.S. market but may limit diversification benefits from international markets. The remaining 17% is spread across Europe, Asia, and other regions, offering some global exposure. Investors seeking to reduce regional risk might consider increasing allocations to emerging markets or other underrepresented regions, balancing the portfolio's geographic exposure to enhance diversification and potentially capture growth in different economies.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio is diversified across market capitalizations, with a significant emphasis on mega-cap stocks at 43%, followed by large caps at 30%. This distribution provides stability and growth potential, as larger companies tend to be more resilient during economic downturns. However, the smaller allocations to mid-cap (19%), small-cap (6%), and micro-cap (2%) stocks may limit exposure to potentially higher-growth opportunities. Investors might explore increasing allocations to smaller-cap stocks to enhance diversification and capture growth potential, while considering the associated risks.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES
    High correlation

The portfolio contains highly correlated assets, particularly the Vanguard Total World Stock Index Fund ETF Shares and the Vanguard Total Stock Market Index Fund Admiral Shares. High correlation means these assets tend to move together, which can limit diversification benefits. During market downturns, correlated assets may exacerbate losses. To enhance diversification, investors should consider reducing exposure to overlapping assets and exploring alternatives that provide uncorrelated returns, potentially improving the portfolio's risk-return profile.

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's current allocation suggests potential for optimization using the Efficient Frontier, a concept in finance that helps identify the best possible risk-return ratio. By adjusting asset weights, the portfolio could achieve a more efficient balance of risk and return. However, this optimization focuses solely on the existing assets and their potential reallocation. Investors should consider the implications of such adjustments on diversification and other investment goals, ensuring that optimization aligns with their risk tolerance and long-term objectives.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.60%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 2.80%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES 1.00%
  • Weighted yield (per year) 1.29%

The portfolio's dividend yield is moderate, with a total yield of 1.29%. Dividends can provide a steady income stream and contribute to total returns, especially in volatile markets. The Vanguard Total International Stock Index Fund Admiral Shares offers the highest yield at 2.80%, enhancing income potential. Investors seeking higher income might explore increasing allocations to dividend-focused funds or stocks, balancing the need for growth and income. However, it's essential to consider the trade-off between yield and growth potential when making adjustments.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • VANGUARD TOTAL STOCK MARKET INDEX FUND ADMIRAL SHARES 0.04%
  • Weighted costs total (per year) 0.05%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.05%. Low costs are advantageous for long-term investors, as they help maximize net returns by minimizing the drag on performance. The Vanguard Total Stock Market Index Fund Admiral Shares, with a TER of 0.04%, exemplifies cost efficiency. Maintaining low costs should remain a priority, as it supports better compounding over time. Investors should continue to monitor expense ratios and seek cost-effective options when making portfolio adjustments, ensuring long-term financial goals are met.

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