Balanced portfolio with a strong foundation in S&P 500 and international diversification

Report created on Aug 3, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is centered around a 50% allocation in the Vanguard S&P 500 ETF, complemented by a 25% stake each in Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares and Vanguard Total International Stock Index Fund ETF Shares. This composition reflects a balanced approach, leaning towards stocks with a significant portion in bonds for risk mitigation. The blend of U.S. equities, international stocks, and corporate bonds suggests a strategy aiming for growth while cushioning against market volatility.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 10%, the portfolio has demonstrated robust growth. The maximum drawdown of -28.95% indicates a moderate risk level, consistent with the portfolio's balanced profile. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing this to benchmarks, the portfolio seems well-positioned for balanced investors seeking growth with a moderate appetite for risk.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median increase of 189.9% and a 67th percentile at 278.9%. This analysis, based on historical data, suggests potential for substantial growth while acknowledging the inherent uncertainty in markets. It's important to remember that these projections do not guarantee future performance but provide a spectrum of possible outcomes to help in risk assessment and planning.

Asset classes Info

  • Stocks
    74%
  • Bonds
    25%
  • Cash
    1%

The portfolio's asset class distribution, with 74% in stocks and 25% in bonds, aligns with a balanced investment strategy. This allocation supports growth through equity investments while using bonds to reduce volatility and provide income. The small cash holding enhances liquidity. Such a mix is suitable for investors seeking a blend of growth and income with moderate risk tolerance.

Sectors Info

  • Technology
    20%
  • Financials
    13%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sectoral allocation shows a strong emphasis on technology and financial services, followed by consumer cyclicals and industrials. This sector spread indicates a growth-oriented strategy but also exposes the portfolio to sector-specific risks. For instance, technology stocks, while offering high growth potential, can be volatile. Diversifying across more sectors or balancing the weight more evenly could mitigate this risk.

Regions Info

  • North America
    52%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

With over half the portfolio in North American assets and significant exposure to developed Europe and emerging Asian markets, the geographic distribution enhances diversification. This global exposure positions the portfolio to benefit from growth in various economies while mitigating risks tied to any single region. However, the relatively low allocation to emerging markets could be a missed opportunity for higher growth, albeit with increased risk.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    25%
  • Mid-cap
    13%
  • Small-cap
    1%

The focus on mega and big-cap stocks (59% combined) suggests a preference for stability and lower volatility associated with larger, well-established companies. Medium, small, and micro caps represent a smaller fraction, indicating a cautious approach to risk. While this supports the portfolio's balanced nature, incorporating more small and mid-cap exposure could offer higher growth potential, albeit with increased risk.

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 current allocation appears well-optimized for a balance between risk and return, as indicated by its historical performance and Monte Carlo simulations. However, continuous monitoring and occasional rebalancing are essential to maintain this optimization, especially considering market fluctuations and changes in the investor's financial situation or goals.

Dividends Info

  • Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares 4.10%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.35%

The dividend yields from the corporate bond ETF and the international stock ETF contribute to the portfolio's income, complementing growth from the S&P 500 ETF. With a total yield of 2.35%, the portfolio provides a steady income stream, which is beneficial for investors seeking both growth and income. Regularly reviewing and rebalancing to maintain an optimal yield while managing risk is advisable.

Ongoing product costs Info

  • Vanguard Intermediate-Term Corporate Bond Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, as even small differences in fees can significantly impact compounded returns over time. This cost efficiency is a strong aspect of the portfolio, supporting better long-term performance.

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