A well-diversified portfolio with a focus on large-cap equities and moderate risk exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with a moderate risk tolerance, seeking balanced growth and income. It is ideal for those with a medium to long-term investment horizon, focusing on capital appreciation while maintaining some income through dividends. The portfolio's broad diversification across regions and sectors provides stability, making it suitable for individuals aiming to build wealth steadily over time. While it emphasizes large-cap equities for stability, the presence of emerging market exposure offers additional growth opportunities. This portfolio is well-suited for investors comfortable with equity market fluctuations in pursuit of long-term gains.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    35.00%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares
    VEU - US9220427754
    18.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    15.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    12.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    12.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares
    VWO - US9220428588
    8.00%

This portfolio is predominantly composed of equity ETFs, with a significant allocation to the Vanguard S&P 500 ETF at 35%. Other notable allocations include the Vanguard FTSE All-World ex-US Index Fund ETF Shares at 18% and the Invesco NASDAQ 100 ETF at 15%. The portfolio is heavily weighted towards large-cap stocks, reflecting a common benchmark composition for balanced portfolios. The focus on ETFs provides broad market exposure while maintaining a relatively simple structure. This composition aligns well with a balanced investment strategy, offering potential for growth while managing risk through diversification across various ETFs.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 12.07%, indicating robust growth over time. This performance outpaces many traditional benchmarks, showcasing the portfolio's ability to generate returns. However, it has also experienced a maximum drawdown of -26.38%, highlighting the inherent volatility in equity-heavy portfolios. The concentration of returns in just 17 days suggests that a few key market movements significantly impact overall performance. While past performance is not a guarantee of future results, it does provide a useful context for understanding potential portfolio behavior in different market conditions.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future outcomes based on historical data, indicate an annualized return of 12.21%. The simulations show a wide range of potential outcomes, with the 5th percentile projecting a 39.6% return and the 67th percentile projecting a 442.6% return. This variability underscores the uncertainty of future market conditions and the importance of maintaining a diversified portfolio to navigate potential risks. While historical data provides a basis for these projections, it's crucial to remember that market dynamics can change, and past trends may not fully predict future performance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%

The portfolio is heavily skewed towards stocks, with a 99% allocation, and a minimal 1% in cash. This high equity concentration reflects a strong growth orientation, typical of balanced portfolios seeking to capitalize on long-term market appreciation. While this allocation can drive substantial returns, it also exposes the portfolio to market volatility. Adding other asset classes, such as bonds or alternative investments, could enhance diversification and potentially reduce risk. This approach would align with the portfolio's balanced risk profile, providing a more stable performance across varying market conditions.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Telecommunications
    10%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector allocation is notably concentrated in technology, which comprises 30% of the portfolio. Other significant sectors include financial services at 14% and consumer cyclicals at 12%. This sector distribution suggests a growth-oriented strategy, as technology and consumer cyclicals often lead in growth phases. However, this concentration may also lead to higher volatility, especially during market corrections or interest rate changes. Diversifying further into sectors like healthcare or utilities could enhance stability, aligning with the portfolio's balanced risk classification and providing a buffer against sector-specific downturns.

Regions Info

  • North America
    75%
  • Europe Developed
    8%
  • Asia Emerging
    8%
  • Asia Developed
    4%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%
  • Europe Emerging
    0%

The portfolio's geographic allocation is heavily weighted towards North America, comprising 75% of the total. This significant exposure aligns with its U.S.-based investor profile but may limit diversification benefits. While developed Europe and emerging Asia offer some diversification, their combined allocation is only 16%. Increasing exposure to regions like Latin America or Africa/Middle East could enhance geographic diversification, potentially reducing risk by spreading investments across various economic environments. This approach could mitigate potential downturns in any single region, aligning with the portfolio's broad diversification goals.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    36%
  • Mid-cap
    16%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio's market capitalization distribution is predominantly in mega (45%) and big (36%) caps, with minimal exposure to medium (16%) and small (1%) caps. This concentration in larger companies reflects a conservative growth strategy, as large-cap stocks often provide more stability and lower volatility. However, adding exposure to small and medium-cap stocks could increase potential returns and diversification. These stocks often have higher growth potential, albeit with increased risk. Balancing this exposure could enhance the portfolio's risk-return profile, aligning with the goal of optimizing long-term growth.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The portfolio contains highly correlated assets, notably the Invesco NASDAQ 100 ETF and the Schwab U.S. Large-Cap Growth ETF. High correlation means these assets tend to move together, which can limit diversification benefits during market downturns. Reducing such overlaps could enhance portfolio resilience by ensuring a broader spread of risk. Diversifying into less correlated assets or sectors could provide better protection against market volatility. This strategy aligns with the portfolio's balanced risk classification, aiming to maintain growth potential while managing downside risk more effectively.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 2.70%
  • Vanguard S&P 500 ETF 1.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.52%

The portfolio's total dividend yield is 1.52%, with significant contributions from the Schwab U.S. Dividend Equity ETF at 2.80% and the Vanguard FTSE Emerging Markets Index Fund ETF Shares at 3.00%. Dividends provide a steady income stream, enhancing total returns and offering some protection against market downturns. For investors seeking income, this yield is a positive feature. However, focusing solely on high dividend yields may limit growth potential. Balancing between growth and income-generating assets can optimize the portfolio for both capital appreciation and income, aligning with a balanced investment strategy.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard FTSE All-World ex-US Index Fund ETF Shares 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, reflecting cost-efficient management. This low cost structure supports better long-term performance by minimizing the drag on returns. Each ETF within the portfolio maintains a competitive expense ratio, with the Vanguard S&P 500 ETF being the most cost-effective at 0.03%. Keeping costs low is crucial for maximizing net returns, especially in a volatile market environment. Investors should continue to monitor expense ratios to ensure they remain competitive, as even small cost differences can compound significantly over time.

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.

The portfolio can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio by adjusting asset allocations. Currently, the portfolio has some overlapping assets, particularly in highly correlated ETFs, which may limit diversification benefits. By reallocating investments to reduce these overlaps, the portfolio could achieve a more efficient balance between risk and return. This optimization doesn't necessarily require adding new assets but rather adjusting current allocations for better performance. This approach aligns with the portfolio's balanced risk profile, aiming to maximize returns without significantly increasing risk.

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