A conservative portfolio with a strong cash position and diversified equity exposure

Report created on Jun 11, 2025

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is structured with a significant emphasis on safety, as evidenced by the 50% allocation to ultra-short-term Treasury bonds. This conservative stance is complemented by diversified equity investments, including a global stock ETF, a tech-focused ETF, and a dividend equity ETF. This composition suggests a strategy that seeks to balance income generation and capital preservation with moderate growth potential from equities.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 9.12%, with a maximum drawdown of -15.43%. This performance, particularly the drawdown metric, underscores the portfolio's conservative nature, aiming to mitigate significant losses during market downturns. The days contributing most to returns indicate that while the portfolio has steady growth, it may also have periods of significant gains.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes but with a strong leaning towards positive returns. The median projected growth is substantial, yet it's crucial to remember that these simulations are based on past data and cannot guarantee future results. They serve as a tool for understanding potential volatility and the likelihood of different outcomes.

Asset classes Info

  • Cash
    50%
  • Stocks
    50%
  • Bonds
    1%

The portfolio's asset allocation is evenly split between cash (or equivalents) and stocks, with a minimal bond presence. This allocation is conservative, prioritizing capital preservation through the significant cash holding, while still allowing for growth through the equity component. The absence of significant bond holdings outside of the cash equivalent may reflect a strategic choice to avoid the current low interest rate environment's impact on bonds.

Sectors Info

  • Technology
    14%
  • Financials
    6%
  • Consumer Discretionary
    6%
  • Health Care
    5%
  • Consumer Staples
    5%
  • Industrials
    5%
  • Telecommunications
    5%
  • Energy
    3%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

The equity portion of the portfolio is diversified across several sectors, with technology being the most prominent. This sector allocation suggests a balance between growth (technology, consumer cyclicals) and stability (healthcare, consumer defensive). However, the technology sector's weight may introduce volatility, which is somewhat mitigated by the large cash position.

Regions Info

  • North America
    41%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, with minor exposures to developed Europe and emerging Asia. This geographic distribution indicates a focus on more stable, developed markets, likely aiming to reduce the volatility associated with emerging markets. However, the limited exposure to emerging and other developed markets may also limit growth potential from these regions.

Market capitalization Info

  • Large-cap
    19%
  • Mega-cap
    18%
  • Mid-cap
    10%
  • Small-cap
    2%

The market capitalization breakdown shows a balanced approach, with investments in big, mega, and medium-cap companies. This suggests a strategy that leans towards stability and reliability offered by larger companies, while still maintaining some growth potential through medium-cap investments. The small and micro-cap segments are underrepresented, aligning with the portfolio's conservative 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.

Based on the Efficient Frontier concept, which aims for the optimal risk-return ratio, this portfolio appears well-positioned given its conservative risk profile. However, there's always room for improvement, such as adjusting the asset allocation slightly to enhance returns without significantly increasing risk. This requires careful consideration of the investor's risk tolerance and investment horizon.

Dividends Info

  • Invesco QQQ Trust 0.60%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • iShares® 0-3 Month Treasury Bond ETF 4.60%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 3.31%

The dividend yields from the equity ETFs add an income component to the portfolio, with the overall yield standing at 3.31%. This is a significant contribution to total returns, especially in a low-interest-rate environment. The high yield from the cash equivalent and dividend equity ETF underscores the portfolio's income-generating capability, complementing capital growth from equity investments.

Ongoing product costs Info

  • Invesco QQQ Trust 0.20%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is remarkably low at 0.08%, which is beneficial for long-term growth as lower costs translate into higher net returns. This cost efficiency is an important factor in the portfolio's overall performance, ensuring that a larger portion of the investment returns contributes to wealth accumulation rather than being eroded by fees.

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