Balanced and broadly diversified portfolio with a strategic blend of momentum and value 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 is best suited for an investor with a balanced risk tolerance, seeking growth through a diversified mix of momentum and value strategies across major global markets. The investor likely has a medium to long-term investment horizon, comfortable with fluctuations in the pursuit of higher returns. The emphasis on major equity markets and sectors suggests an investor who appreciates a mix of stability and potential for growth, with a keen interest in keeping costs low.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    35.00%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    25.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    14.00%
  • Dimensional International Value ETF
    DFIV - US25434V8072
    13.00%
  • Invesco S&P International Developed Momentum ETF
    IDMO - US46138E2220
    13.00%

This portfolio is structured around a core-satellite approach, primarily focusing on equities with a significant emphasis on ETFs that track the total stock market, S&P 500 momentum, and international stocks. The allocation is heavily weighted towards North American equities (65%), with a strategic exposure to developed and emerging international markets. The blend of momentum and value strategies across different geographies suggests a sophisticated approach to capturing growth while attempting to mitigate risks through diversification.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 13% and a maximum drawdown of -24.3%, the portfolio has demonstrated resilience and growth over time. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing this to benchmarks, the portfolio's performance suggests effective management of risk and return, particularly in volatile markets.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential returns with a median increase of 400.1%. While simulations provide valuable insights, it's important to remember they cannot predict future market conditions with certainty. The high number of simulations with positive returns underscores the portfolio's robustness but should be viewed as one of many tools in evaluating potential future performance.

Asset classes Info

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

The portfolio's allocation is nearly entirely in stocks (99%), with a minimal cash holding. This high equity exposure aligns with the portfolio's balanced risk profile but leans towards a more aggressive growth strategy. Diversification across asset classes is limited, suggesting a reliance on stock market performance for returns.

Sectors Info

  • Financials
    23%
  • Technology
    20%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    9%
  • Health Care
    6%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation shows a strong emphasis on financial services and technology, comprising 43% of the portfolio. This concentration in high-growth sectors can offer significant returns but also exposes the portfolio to sector-specific risks. The balance across industrials, consumer cyclicals, and other sectors helps to mitigate this risk, though the heavy weighting in tech and finance sectors warrants monitoring.

Regions Info

  • North America
    65%
  • Europe Developed
    20%
  • Japan
    6%
  • Australasia
    3%
  • Asia Developed
    2%
  • Asia Emerging
    2%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographic allocation underscores a strong bias towards North American equities, complemented by significant investments in developed European markets and Japan. The limited exposure to emerging markets and specific regions like Latin America and Africa/Middle East may represent a missed opportunity for diversification and growth, given the potential for higher returns in these markets.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's exposure by market capitalization shows a preference for mega and big-cap stocks, which tend to be more stable and less volatile than smaller companies. This aligns with the portfolio's balanced risk profile, though the modest allocation to medium, small, and micro-caps suggests room for greater diversification and potential upside from smaller, growth-oriented companies.

Dividends Info

  • Dimensional International Value ETF 3.30%
  • Invesco S&P International Developed Momentum ETF 2.00%
  • Invesco S&P 500® Momentum ETF 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.65%

The portfolio's dividend yield, averaging 1.65%, contributes to its total return, providing a steady income stream in addition to capital gains. The varying yields across ETFs reflect the different investment strategies and regions represented, with the Dimensional International Value ETF offering the highest yield, indicative of its value-oriented approach.

Ongoing product costs Info

  • Dimensional International Value ETF 0.27%
  • Invesco S&P International Developed Momentum ETF 0.25%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) of 0.12% is impressively low, especially considering the broad diversification and international exposure. Keeping costs low is crucial for enhancing long-term returns, as even small differences in fees can have a significant impact over time. This efficient cost management is a positive aspect of the portfolio's construction.

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 current allocation suggests a well-thought-out strategy aiming for an optimal risk-return ratio, as indicated by the Efficient Frontier analysis. However, it's important to periodically review and adjust the allocation to maintain this balance, especially in response to changing market conditions and investment goals.

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