A balanced portfolio with strong US bias and efficient cost structure

Report created on Jan 14, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of stocks, with a 79.5% allocation, and bonds making up 19.7%. This composition aligns with a balanced portfolio, providing growth potential through equities while mitigating risk with bonds. Stock-heavy portfolios typically offer higher returns over the long term but can be volatile. Including bonds helps stabilize returns during market downturns. Consider maintaining this balance if you're comfortable with the current risk level. If seeking more stability, increasing bond exposure might be beneficial.

Growth Info

The portfolio's historic performance shows a Compound Annual Growth Rate (CAGR) of 11.39%, which is competitive compared to typical market benchmarks. This suggests the portfolio has performed well over time, benefiting from its diversified asset base. However, the maximum drawdown of -28.4% highlights potential volatility during market downturns. It's important to remember that past performance doesn't guarantee future results. Regularly reviewing performance against personal goals can help ensure alignment with your risk tolerance and objectives.

Projection Info

Monte Carlo simulations project potential outcomes using historical data, indicating a median growth of 214.79% and a 67th percentile of 347.15%. These projections suggest a strong likelihood of positive returns, with 935 out of 1,000 simulations showing gains. However, the 5th percentile shows a potential downside of -8.56%. While useful, these simulations rely on past data and assumptions that may not hold in the future. Continue monitoring market conditions and adjusting the portfolio as needed to stay aligned with your risk tolerance and financial goals.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    1%

The portfolio's allocation across asset classes is heavily weighted towards stocks, with a significant 79.5% in equities and 19.7% in bonds. This allocation supports potential growth while providing some diversification through fixed-income securities. Compared to benchmark norms, the portfolio is well-balanced for a moderate risk profile. However, the minimal cash allocation of 0.7% may limit liquidity during market volatility. Consider maintaining this allocation if it aligns with your risk tolerance, or increase bond exposure for more stability.

Sectors Info

  • Technology
    21%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Industrials
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is diverse, with a notable emphasis on technology at 21.1%, followed by financial services and consumer cyclicals. This mirrors common market benchmarks, providing exposure to growth sectors while maintaining balance. Tech-heavy portfolios can experience higher volatility, especially during interest rate hikes. The allocation across 11 sectors supports diversification, reducing the impact of sector-specific downturns. Continue monitoring sector trends and consider rebalancing if any sector becomes overly dominant.

Regions Info

  • North America
    61%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The geographic exposure is heavily tilted towards North America at 61.2%, with limited exposure to other regions like Europe and Asia. This concentration can lead to regional risk, especially if the US market underperforms. While the US market has historically delivered strong returns, diversifying geographically could enhance resilience against regional downturns. Consider increasing exposure to underrepresented regions to achieve better global diversification, aligning with your long-term investment goals.

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 appears to be well-positioned on the Efficient Frontier, meaning it offers a strong risk-return ratio based on its current assets. This optimization suggests that the portfolio is achieving the best possible return for its risk level. However, it's based solely on the current allocation and doesn't account for potential new investments. Regularly review the portfolio to ensure it remains on the Efficient Frontier, adjusting as needed to maintain optimal performance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.22%

With a total dividend yield of 2.22%, the portfolio offers a modest income stream. The bond ETF contributes significantly with a 3.7% yield. Dividends can provide consistent income, which is beneficial for reinvestment or income needs. However, focusing solely on dividends may overlook growth opportunities. Consider the role of dividends in your overall strategy and whether reinvesting them aligns with your financial goals, especially if you're seeking long-term growth.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, ensuring more of your investments work for you rather than being eaten up by fees. Low costs are crucial for long-term performance, as high fees can erode returns over time. This efficient cost structure is a strong aspect of the portfolio. Continue to monitor and ensure that any changes or additions to the portfolio maintain this low-cost advantage.

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