Balanced portfolio with a strong tilt towards US equities and significant bond exposure

Report created on Aug 12, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is heavily skewed towards US equities, comprising 75% of the allocation, with a significant 25% dedicated to bonds. The equity component is split between large-cap growth, S&P 500 exposure, and small-cap value stocks, indicating a blend of growth and value investing strategies. The bond allocation is diversified between corporate and total market bonds, providing a counterbalance to the equity risk. However, the portfolio's diversification is limited, as reflected by its single-focused classification and low diversification score.

Growth Info

Historically, the portfolio has demonstrated robust performance with a Compound Annual Growth Rate (CAGR) of 15.67%. The maximum drawdown experienced was -18.73%, which, while significant, is within expectations for a balanced portfolio with a substantial equity component. The days contributing to 90% of returns indicate that the portfolio's performance has been driven by relatively few, but strong, market days. This performance should be considered in light of the inherent volatility and risks associated with equity investments.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential future performances for this portfolio. With 990 out of 1,000 simulations showing positive returns, the median projected growth is quite optimistic. However, the significant spread between the 5th and 67th percentiles underscores the uncertainty and risk involved. It's important to remember that these projections are based on past trends, which may not accurately predict future market movements.

Asset classes Info

  • Stocks
    75%
  • Bonds
    25%

The portfolio's allocation is split between stocks (75%) and bonds (25%), with a clear absence of other asset classes such as real estate or commodities. This allocation supports a balanced risk-return profile but may miss out on diversification benefits and alternative income streams that other asset classes can offer. Considering the investor's moderate risk tolerance, incorporating additional asset classes could enhance portfolio resilience and potential for growth.

Sectors Info

  • Technology
    27%
  • Telecommunications
    22%
  • Financials
    10%
  • Consumer Discretionary
    10%
  • Industrials
    6%
  • Health Care
    6%
  • Energy
    3%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation heavily favors technology and communication services, making up nearly half of the portfolio. While this reflects the current market trend towards tech-heavy investments, it also exposes the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts. Financial services, consumer cyclicals, and industrials provide some balance, but the heavy tech focus could lead to volatility in response to tech sector fluctuations.

Regions Info

  • North America
    90%

With 90% of assets allocated to North America, the portfolio exhibits a strong home bias, which may limit exposure to global growth opportunities and increase vulnerability to regional economic downturns. Expanding geographic diversification could mitigate some of this risk and tap into emerging markets' growth potential, which is particularly relevant for a balanced portfolio aiming for growth and risk mitigation.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    17%
  • Mid-cap
    9%
  • Small-cap
    8%
  • Micro-cap
    8%

The portfolio's market capitalization breakdown shows a significant lean towards mega and big-cap stocks, which tend to be more stable but offer lower growth potential compared to smaller companies. While this aligns with the portfolio's balanced risk profile, the current allocation to small and micro-caps (16%) suggests a willingness to pursue higher growth opportunities, albeit with increased risk.

Redundant positions Info

  • Schwab U.S. Large-Cap Growth ETF
    SPDR® Portfolio S&P 500 ETF
    High correlation

The high correlation between the Schwab U.S. Large-Cap Growth ETF and SPDR® Portfolio S&P 500 ETF indicates redundancy, which does not contribute to diversification. This overlap means that both assets are likely to react similarly to market movements, which can amplify losses during downturns. Reducing overlap by reallocating funds from one of these ETFs could improve the portfolio's overall risk-adjusted performance.

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.

Optimizing the portfolio using the Efficient Frontier could enhance its risk-return profile. The current high correlation between certain assets suggests an opportunity to improve diversification without necessarily sacrificing returns. By reallocating from overlapping assets to underrepresented sectors or geographies, the portfolio could achieve a more efficient distribution of risk and potentially higher returns for the same level of risk.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® Portfolio S&P 500 ETF 1.20%
  • BondBloxx ETF Trust 10.30%
  • Weighted yield (per year) 2.66%

The portfolio's total yield of 2.66% suggests a moderate income component, primarily driven by the BondBloxx ETF Trust and the Vanguard Total Bond Market Index Fund ETF Shares. While the equity ETFs offer lower yields, they contribute to the portfolio's growth potential. Balancing growth and income is crucial for a balanced portfolio, especially for investors relying on their investments for regular income.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • BondBloxx ETF Trust 0.40%
  • Weighted costs total (per year) 0.12%

The portfolio's overall expense ratio (TotalTER) of 0.12% is impressively low, which is beneficial for long-term performance as lower costs translate directly into higher net returns. This cost efficiency is a strong point, particularly in a low-yield environment where every basis point in saved costs can significantly impact overall returns.

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