Balanced portfolio with a strong focus on US equities and moderate international 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 is well-suited for an investor with a balanced risk tolerance, seeking growth with a moderate level of risk. It's ideal for those with a long-term investment horizon who are comfortable with fluctuations in the market, relying on the potential for higher returns from equities while using bonds to mitigate risk. The investor likely appreciates the stability and growth potential of large-cap stocks but should be open to exploring more diversification to optimize returns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    45.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    20.00%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    15.00%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    10.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    10.00%

This portfolio is heavily weighted towards US equities, comprising 80% of the allocation with significant positions in the Vanguard S&P 500 ETF, Schwab U.S. Large-Cap Growth ETF, and Vanguard Total Stock Market Index Fund ETF Shares. The remaining 20% is split between US bonds and international stocks, indicating a moderate approach to diversification. The heavy emphasis on large-cap and growth-oriented ETFs suggests a strategy leaning towards capital appreciation while maintaining some level of income generation and risk mitigation through bonds and international exposure.

Growth Info

The portfolio has demonstrated strong historical performance with a Compound Annual Growth Rate (CAGR) of 14.19%, albeit with a significant maximum drawdown of -31.55%. This performance, coupled with a relatively short period where 90% of returns were generated, suggests a concentration of gains in specific market conditions. Comparing these figures against benchmarks would help assess the portfolio's relative risk-adjusted returns, highlighting the importance of understanding market cycles and the impact of major holdings on overall performance.

Projection Info

Monte Carlo simulations, employing thousands of random market scenarios to forecast future returns, indicate a wide range of outcomes for this portfolio. The 50th percentile outcome suggests a substantial potential for growth, while the presence of 995 out of 1,000 simulations with positive returns underscores the portfolio's resilience. However, it's crucial to remember that such projections are based on historical data, which may not always predict future trends accurately.

Asset classes Info

  • Stocks
    90%
  • Bonds
    10%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The asset class distribution, with 90% in stocks and 10% in bonds, reflects a growth-oriented strategy with a moderate tolerance for risk. This allocation aligns with the portfolio's balanced risk profile but leans towards higher volatility and potential returns associated with stock investments. Diversifying further into different asset classes, such as real estate or commodities, could provide additional risk mitigation and potential for returns uncorrelated with stock and bond markets.

Sectors Info

  • Technology
    32%
  • Financials
    12%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Health Care
    8%
  • Industrials
    7%
  • Consumer Staples
    4%
  • Energy
    2%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is heavily skewed towards technology, financial services, and consumer cyclicals, representing the most significant portions of the portfolio. This concentration in high-growth sectors may increase volatility and risk, particularly in market downturns. While such an allocation can offer substantial returns during bull markets, diversifying into more defensive sectors like healthcare or utilities could provide a buffer during economic slowdowns.

Regions Info

  • North America
    81%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

With 81% of assets in North America and limited exposure to emerging and developed markets outside the US, the portfolio's geographic distribution underscores a strong home bias. This concentration enhances exposure to US market performance but may limit potential gains from international markets. Increasing allocations to developed markets in Europe and emerging markets in Asia could enhance diversification and access to growth opportunities abroad.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    28%
  • Mid-cap
    15%
  • Small-cap
    2%
  • Micro-cap
    0%

The focus on mega and big-cap stocks, constituting 72% of the portfolio, aligns with the strategy's emphasis on stability and growth potential from established companies. However, the limited exposure to medium, small, and micro-cap stocks might restrict opportunities for higher returns from faster-growing firms. Considering a slight increase in allocation towards smaller market caps could enhance growth prospects and diversification.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Schwab U.S. Large-Cap Growth ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation among the Vanguard S&P 500 ETF, Schwab U.S. Large-Cap Growth ETF, and Vanguard Total Stock Market Index Fund ETF Shares indicates overlapping investments, reducing the portfolio's diversification benefits. Identifying and possibly reducing holdings in highly correlated assets can improve the portfolio's overall risk-adjusted performance by ensuring that each holding contributes uniquely to the portfolio's objectives.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard S&P 500 ETF 0.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.90%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.28%

The portfolio's dividend yield of 1.28% contributes to its total return, providing a steady income stream alongside capital appreciation. While the focus on growth-oriented ETFs naturally results in a lower overall yield, the bond holdings offer a higher yield, balancing income generation with growth potential. Reviewing dividend policies and yields periodically can ensure that the portfolio maintains a desirable balance between income and growth.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from low overall costs, with a Total Expense Ratio (TER) of 0.03%, which is impressively low and supports better long-term performance by minimizing the drag on returns. Keeping costs low is crucial for enhancing net returns, especially in a low-yield environment. Regularly reviewing expense ratios and considering cost-effective alternatives for similar strategies can further optimize returns.

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.

Considering the portfolio's current asset allocation and the high correlation among its largest holdings, there's an opportunity to optimize its risk-return profile. By reducing overlap and reallocating towards less correlated assets, the portfolio can achieve a more efficient frontier, enhancing diversification and potentially improving the risk-adjusted return. This approach requires a careful review of each asset's contribution to portfolio volatility and returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.