A balanced and globally diversified portfolio with a strong focus on stocks

Report created on Jul 14, 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 evenly splits its investment between the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares, offering a broad exposure to both U.S. and international equity markets. The 50-50 allocation between these two ETFs suggests a strategy that balances the pursuit of growth through U.S. large-cap stocks with the diversification benefits of global equities. This composition aligns with a balanced risk profile, aiming to mitigate volatility through geographic and sectoral diversification.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.66% and a maximum drawdown of -34.08%, the portfolio demonstrates strong growth potential tempered by significant risk, as evidenced by the drawdown during market downturns. The days contributing to 90% of returns highlight the importance of staying invested despite volatility. This performance, coupled with a diversified asset allocation, should reassure investors about the resilience and growth prospects of their investments over time.

Projection Info

Forward-looking projections, based on Monte Carlo simulations, suggest a wide range of potential outcomes, with a median increase of 392.8%. While these simulations provide valuable insights, it's crucial to understand that they rely on historical data, which is not a guarantee of future performance. Such projections are helpful for setting expectations and preparing for various market conditions, but investors should remain adaptable to changing economic landscapes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's nearly exclusive allocation to stocks (99%) positions it for growth but also exposes it to higher volatility compared to more diversified allocations that include bonds or other asset classes. The minimal cash holding (1%) offers limited liquidity and defensive positioning. Investors should consider their comfort with short-term market fluctuations, given the portfolio's aggressive growth orientation.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is heavily weighted towards technology, financial services, and consumer cyclicals, reflecting a growth-focused strategy. However, this concentration increases susceptibility to sector-specific risks. Diversification across sectors can mitigate some volatility, but the significant allocation to technology, in particular, may warrant a review to ensure alignment with the investor's risk tolerance and market outlook.

Regions Info

  • North America
    82%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The geographic distribution, with a dominant 82% in North America and modest allocations to developed Europe and emerging markets, provides a solid foundation in stable economies while offering some exposure to global growth opportunities. This allocation supports diversification benefits but may underrepresent potential growth in emerging markets, which could be a consideration for investors seeking broader global exposure.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

The focus on mega and big cap stocks (78% combined) suggests a preference for established, less volatile companies, which typically offer stable returns. Medium, small, and micro caps represent a smaller portion of the portfolio, indicating a conservative approach to risk. However, incorporating more small and medium cap exposure could enhance growth prospects and diversification.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares indicates overlapping investments, particularly in U.S. large-cap stocks, which may limit the diversification benefits. Investors might consider evaluating alternative assets or funds that provide exposure to different sectors or geographies to enhance portfolio diversification.

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.

Given the high correlation between the two ETFs, optimizing the portfolio for a better risk-return profile might involve diversifying beyond these holdings. The Efficient Frontier suggests there may be opportunities to achieve similar or improved returns with lower risk by adjusting the asset allocation. Exploring options that reduce overlap and introduce exposure to different asset classes or sectors could enhance portfolio efficiency.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.50%

The portfolio's average dividend yield of 1.50% contributes to total returns and offers a modest income stream. While not the primary focus of a growth-oriented portfolio, dividends can provide a buffer during market downturns and contribute to compounding returns over time. Investors should balance the pursuit of growth with the stability and income dividends offer.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.05%

With a total Expense Ratio (TER) of 0.05%, the portfolio benefits from low costs, maximizing the potential for net returns over time. Low-cost index funds, such as those chosen here, are effective vehicles for long-term growth, as they minimize the drag on performance that higher fees can cause. Investors are well-served by maintaining focus on cost efficiency as part of their investment strategy.

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