A balanced portfolio with global diversification and low-cost ETFs

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 suits an investor seeking balanced growth with moderate risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining exposure to global equities, making it ideal for individuals looking to build wealth over time. The focus on low-cost ETFs supports efficient growth, while the broad diversification mitigates risk. Investors comfortable with equity exposure and market fluctuations will find this portfolio aligns well with their objectives. It's particularly suitable for those who value simplicity and cost-effectiveness.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    65.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    35.00%

The portfolio is composed of two ETFs: Vanguard Total Stock Market Index Fund ETF Shares (65%) and Vanguard Total International Stock Index Fund ETF Shares (35%). This structure provides broad exposure to both U.S. and international equities, aligning well with a balanced investment strategy. Compared to a typical benchmark, this portfolio offers a substantial allocation to global equities, enhancing diversification. Holding these two ETFs simplifies management and keeps costs low. Consider whether this allocation aligns with your long-term goals and risk tolerance, as it leans heavily on equity exposure.

Growth Info

Historically, this portfolio has achieved a CAGR of 10.92%, which is quite impressive. A hypothetical initial investment would have grown significantly over time, demonstrating strong past performance. However, it faced a maximum drawdown of -34.55%, highlighting potential volatility during market downturns. Compared to benchmarks, this performance is competitive, indicating a well-constructed portfolio. Remember, past performance does not guarantee future results. It's crucial to assess whether you're comfortable with the level of risk associated with such drawdowns.

Projection Info

Forward projections using a Monte Carlo simulation suggest a median growth of 234.6%, with 966 out of 1,000 simulations showing positive returns. This simulation uses historical data to estimate potential outcomes, but it's important to note that it doesn't predict the future. The 10.26% annualized return across simulations offers a reasonable expectation for growth, although actual results may vary. Consider whether this aligns with your financial goals and risk appetite, as simulations are based on past data and market conditions can change.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's allocation is heavily weighted towards stocks (99%), with a minimal cash position (1%). This stock-centric approach provides substantial growth potential but also increases risk, especially during market downturns. Compared to a diversified benchmark, this allocation is more aggressive. While stocks offer higher returns over the long term, having a small allocation to bonds or other asset classes could reduce volatility. Evaluate whether this level of risk suits your investment horizon and financial objectives.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation reveals a significant concentration in technology (26%) and financial services (16%). This aligns with common benchmarks, providing exposure to key growth areas. However, it may also increase volatility, especially if these sectors face challenges. The portfolio's sector diversification is commendable, covering various industries. Consider if this sector balance aligns with your risk tolerance and market outlook. If concerned about sector-specific risks, you might explore rebalancing options to achieve a more balanced sector exposure.

Regions Info

  • North America
    68%
  • Europe Developed
    13%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic allocation shows a strong emphasis on North America (68%), with notable exposure to Europe and Asia. This mirrors common benchmarks but leans towards the U.S. market. While this has historically been a successful strategy, it may expose the portfolio to regional risks. Increasing exposure to emerging markets could enhance diversification and capture growth opportunities. Assess if this geographic balance aligns with your risk tolerance and investment goals, especially if you seek greater global diversification.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution is well-balanced, with a focus on mega (42%) and big (31%) companies. This aligns with common benchmarks, offering stability and growth potential. Small and micro-cap allocations are present but limited, which may reduce volatility. This composition is ideal for investors seeking steady growth from established companies. Consider whether this distribution aligns with your risk tolerance and investment strategy. If seeking higher growth, you might explore increasing small-cap exposure.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.96%

The portfolio's dividend yield is 1.96%, with the Vanguard Total International Stock Index Fund ETF Shares offering a higher yield (3.20%) than its U.S. counterpart (1.30%). Dividends contribute to total returns and provide a steady income stream. This yield aligns with a balanced investment strategy, offering both growth and income. Consider whether this dividend level meets your income needs or if higher-yielding investments are necessary. If income is a priority, exploring dividend-focused funds could enhance cash flow.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's costs are impressively low, with a total expense ratio (TER) of 0.05%. This aligns with best practices, as lower costs improve long-term returns. Compared to typical benchmarks, this TER is highly competitive, supporting efficient growth. Keeping expenses minimal allows more of your investment to compound over time. Consider maintaining this cost discipline when evaluating potential changes to your portfolio. If considering additional investments, prioritize low-cost options to preserve this advantage.

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.

The portfolio is well-positioned on the Efficient Frontier, meaning it offers an optimal risk-return ratio based on current assets. This suggests that the portfolio is already achieving the best possible balance between risk and return given its composition. While this provides confidence in the portfolio's construction, consider whether any changes in your financial situation or goals necessitate adjustments. Remember, optimization is about maximizing returns for a given level of risk, not necessarily diversification.

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.