Balanced portfolio with a strong focus on global equities and low-cost index funds
Report created on Jul 21, 2025Risk profile
4/7
Diversification profile
5/5
Positions
-
SW SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES
SWISX - US8085098304 40.00% -
SW SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES
SWTSX - US8085097561 40.00% -
SC Schwab U.S. REIT ETF
SCHH - US8085248479 7.50% -
SW Schwab US Aggregate Bond Index Fund
SWAGX - US8085177181 7.50% -
BN Vanguard Total International Bond Index Fund ETF Shares
BNDX - US92203J4076 5.00%
The portfolio is heavily weighted towards equities, with 80% allocated across international and total stock market index funds. This is complemented by a smaller, yet strategic, allocation to real estate (7.5%) and bonds (12.5%), enhancing diversification. The choice of low-cost index funds and ETFs is commendable, minimizing expenses and potentially improving net returns. The inclusion of both U.S. and international bonds and equities broadens the portfolio's exposure, mitigating risks associated with geographic concentration.
Growth
With a Compound Annual Growth Rate (CAGR) of 10.01%, the portfolio has demonstrated robust growth. The maximum drawdown of -31.23% indicates resilience during market downturns, albeit with significant short-term losses. The concentration of returns in a limited number of days highlights the importance of remaining invested through market cycles to capture potential gains. Comparatively, this performance suggests a well-managed risk-return balance, aligning with a balanced risk profile.
Projection
Monte Carlo simulations offer a probabilistic view of future returns, factoring in historical volatility and correlations. With 91.2% of simulations yielding positive returns and a median projected growth of 114.7%, the portfolio shows promise for continued growth. However, the wide range between the 5th and 67th percentiles underscores potential volatility, emphasizing the need for ongoing risk management and diversification strategies.
Asset classes
- Stocks 79%
- Bonds 12%
- Real Estate 8%
- Cash 1%
The asset class distribution—79% in stocks, 12% in bonds, and 8% in real estate—supports a growth-oriented strategy while maintaining a cushion against market volatility through bonds and real estate. This allocation aligns with a balanced investment approach, offering a mix of growth potential and risk mitigation. However, the minimal cash allocation suggests limited liquidity, which could be a consideration for meeting short-term needs or taking advantage of market opportunities.
Sectors
- Technology 17%
- Financials 15%
- Industrials 11%
- Real Estate 9%
- Health Care 8%
- Consumer Discretionary 8%
- Telecommunications 6%
- Consumer Staples 5%
- Basic Materials 3%
- Energy 3%
- Utilities 2%
Sector allocations are broadly diversified, with technology and financial services being the most prominent. This reflects a common market-weight approach but also introduces sector-specific risks, particularly in technology, which can be volatile. The presence of sectors like healthcare, consumer cyclical, and industrials provides a counterbalance, potentially reducing overall portfolio volatility and enhancing long-term stability.
Regions
- North America 48%
- Europe Developed 26%
- Japan 9%
- No data 8%
- Australasia 3%
- Asia Developed 2%
Geographic diversity is a strength, with significant exposure to North America and developed European markets, complemented by positions in Japan and Australasia. The lack of exposure to emerging markets, however, could mean missing out on higher growth potential offered by these regions. Diversifying further into emerging markets could enhance growth prospects and reduce the impact of regional downturns.
Market capitalization
- Mega-cap 37%
- Large-cap 29%
- Mid-cap 15%
- Small-cap 4%
- Micro-cap 1%
The portfolio's emphasis on mega and big cap stocks (66%) suggests a focus on stability and lower volatility, characteristic of larger, well-established companies. However, the limited exposure to small and micro-cap stocks (5%) could be a missed opportunity for higher growth, albeit with increased risk. Considering a slight increase in allocation to smaller cap stocks could enhance returns over the long term, balancing the overall 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 near the Efficient Frontier, suggesting an optimal balance between risk and return given the existing assets. This indicates a well-considered asset mix that maximizes returns for the assumed level of risk. Regularly reviewing and adjusting the portfolio in response to changing market conditions and personal financial goals can help maintain this balance.
Dividends
- Vanguard Total International Bond Index Fund ETF Shares 4.30%
- Schwab U.S. REIT ETF 3.00%
- Schwab US Aggregate Bond Index Fund 3.70%
- SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 2.80%
- SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 1.20%
- Weighted yield (per year) 2.32%
The portfolio's average dividend yield of 2.32% contributes to its total return, providing a steady income stream in addition to capital appreciation. This is particularly beneficial in a balanced portfolio, where income can offset periods of flat or negative market performance. Regularly reviewing dividend-yielding investments to ensure they continue to meet yield and growth objectives is advisable.
Ongoing product costs
- Vanguard Total International Bond Index Fund ETF Shares 0.07%
- Schwab U.S. REIT ETF 0.07%
- Schwab US Aggregate Bond Index Fund 0.04%
- SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 0.06%
- SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 0.03%
- Weighted costs total (per year) 0.05%
With an overall Total Expense Ratio (TER) of 0.05%, the portfolio benefits from exceptionally low costs, maximizing the potential for net returns. This is a critical factor in long-term investment success, as high costs can significantly erode returns. Maintaining a focus on low-cost index funds and ETFs is a prudent strategy that aligns with best practices for cost-effective investing.
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