Balanced global ETF portfolio with diversified exposure and a focus on long-term growth

Report created on May 6, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio showcases a strategic blend of domestic and international ETFs, emphasizing broad market exposure. With 50% allocated to the Vanguard Total Stock Market Index Fund ETF Shares, it leans heavily on the US market. The inclusion of developed and emerging market ETFs, alongside specific allocations to Asia, adds a global dimension. This structure aims to capture growth across a wide spectrum of economies, balancing between established and high-growth potential regions.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 9.75%, with a maximum drawdown of -33.38%. This performance indicates a resilient growth trajectory over time, despite significant market corrections. It's important to note that such historical data, while informative, does not guarantee future results. Investors should consider this alongside other factors like economic outlooks and market conditions.

Projection Info

Using Monte Carlo simulations, which project future outcomes based on historical data, this portfolio shows a wide range of potential performances. The median projection suggests a 120.9% return, with a 67th percentile outcome of 216.4%. However, it's crucial to understand that these projections are hypothetical and subject to the limitations of past data, which may not fully account for future market shifts.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset class distribution is heavily skewed towards stocks (99%), with a minimal cash holding (1%). This composition is aligned with its growth-oriented strategy but comes with higher volatility. Diversification across asset classes could provide a buffer against market fluctuations, suggesting a potential area for adjustment depending on risk tolerance.

Sectors Info

  • Technology
    25%
  • Financials
    18%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation reveals a strong emphasis on technology, financial services, and consumer cyclicals, which are sectors often associated with growth but also with higher volatility. This concentration aligns with the portfolio's growth objectives but may benefit from a review to ensure it matches the investor's risk appetite and market outlook.

Regions Info

  • North America
    53%
  • Asia Emerging
    14%
  • Europe Developed
    13%
  • Asia Developed
    10%
  • Japan
    5%
  • Africa/Middle East
    2%
  • Australasia
    2%
  • Latin America
    1%

Geographic exposure is well-distributed, with a significant emphasis on North America and balanced exposure across Asia, Europe, and emerging markets. This global footprint enhances diversification, reducing the impact of regional downturns. However, the portfolio may consider increasing allocations to underrepresented regions for even broader diversification.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    26%
  • Mid-cap
    18%
  • Small-cap
    6%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for mega and big-cap stocks, which typically offer stability and lower volatility. However, the presence of medium, small, and micro-caps introduces growth potential, albeit with increased risk. This balance supports the portfolio's objectives but warrants periodic review to align with changing market conditions and investment goals.

Redundant positions Info

  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares
    Vanguard FTSE Developed Markets Index Fund ETF Shares
    High correlation

The high correlation between certain ETFs, particularly those focusing on developed markets outside the US, suggests overlapping exposures that may not contribute significantly to diversification. Reducing or reallocating from highly correlated assets could enhance the portfolio's efficiency and risk-adjusted 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.

Click on the colored dots to explore allocations.

The portfolio's risk-return profile could be optimized by addressing the overlap in highly correlated ETFs. Applying the Efficient Frontier concept could identify a mix of assets that maximizes returns for a given level of risk. This process, however, should be tailored to individual risk tolerance and investment horizon, ensuring the portfolio remains aligned with personal financial goals.

Dividends Info

  • iShares Asia 50 ETF 2.50%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.90%
  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares 3.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 2.10%

Dividend yields across the ETFs contribute to the portfolio's total yield of 2.10%, providing a steady income stream in addition to potential capital appreciation. This aspect is particularly valuable in volatile markets, offering a cushion against price fluctuations. Regularly reviewing dividend performance can ensure this income remains aligned with overall investment goals.

Ongoing product costs Info

  • iShares Asia 50 ETF 0.50%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares 0.08%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

With an overall expense ratio of 0.09%, the portfolio is cost-efficient, minimizing the drag on returns due to fees. This efficiency is crucial for long-term growth, as lower costs compound positively over time. Investors should continue monitoring costs to maintain this advantage.

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