A growth-focused portfolio with balanced diversification and strong historical performance

Report created on Jan 16, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of equity ETFs, with a significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares, making up 52.5%. This is complemented by 25% in the Vanguard Total International Stock Index Fund ETF Shares. Fixed income exposure is achieved through the Vanguard Total Bond Market Index Fund ETF Shares at 10%. This composition aligns with a growth-focused strategy, emphasizing equities for capital appreciation. Compared to a typical balanced portfolio, this one leans more towards equities, suggesting a higher risk tolerance. To maintain this growth focus, consider regular reviews to ensure alignment with market conditions and personal goals.

Growth Info

Historically, the portfolio has demonstrated a strong Compound Annual Growth Rate (CAGR) of 12.57%, outperforming many benchmarks. This indicates robust growth potential over time. However, it also experienced a maximum drawdown of -32.7%, highlighting periods of significant volatility. Understanding these performance metrics is crucial as they reflect the portfolio's ability to recover and grow in varying market conditions. While past performance is not a guarantee of future results, maintaining a diversified approach can help manage risks and capitalize on growth opportunities.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future performance based on historical data, indicate an optimistic outlook. The portfolio's 50th percentile projection is a 242.41% increase, with 929 out of 1,000 simulations showing positive returns. The annualized return across simulations is 11.2%. While these projections are promising, they rely on historical data and assumptions that may not hold in the future. Regularly reviewing and adjusting the portfolio can help align with changing market dynamics and personal goals.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The portfolio's allocation is heavily weighted towards stocks, comprising approximately 89.36% of the assets, with bonds making up 9.85%. This allocation aligns with a growth-oriented strategy, as equities generally offer higher potential returns compared to bonds. However, the limited bond exposure may result in increased volatility. For those seeking more stability, consider slightly increasing bond allocation or exploring other asset classes to balance risk and return. This can help cushion against market downturns while still pursuing growth.

Sectors Info

  • Technology
    20%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    5%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is well-diversified, with technology leading at 20.19%, followed by financial services and industrials. This distribution aligns with global benchmarks and reduces sector-specific risks. However, the concentration in technology could lead to higher volatility, especially during regulatory changes or economic shifts. To mitigate this, consider periodically reassessing sector weights and adjusting as needed to maintain balance. This approach supports a more resilient portfolio that can adapt to sector trends and shifts.

Regions Info

  • North America
    64%
  • Europe Developed
    11%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic exposure is predominantly in North America, accounting for 64.34% of the allocation. This is complemented by diversified holdings in Europe Developed, Japan, and Asia Emerging. While this provides a broad global reach, the heavy North American focus could limit exposure to growth opportunities in other regions. To enhance diversification, consider increasing allocations in underrepresented areas, such as emerging markets, which may offer higher growth potential. This can help balance risks and capture global market trends.

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 can be optimized using the Efficient Frontier, which helps identify the best possible risk-return ratio. This involves adjusting the current asset allocations to achieve maximum returns for a given level of risk. While this optimization does not guarantee diversification, it enhances the portfolio's efficiency. Regularly reviewing and rebalancing based on the Efficient Frontier can ensure that the portfolio remains aligned with your risk tolerance and investment goals.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.17%

The portfolio's dividend yield stands at 2.17%, with contributions from various ETFs. Dividends provide a steady income stream, which can be reinvested for compounding growth. For growth-focused investors, dividends can enhance total returns while offering some downside protection during market volatility. If income is a priority, consider increasing holdings in higher-yielding assets. However, ensure that the pursuit of yield does not compromise overall growth potential or risk tolerance.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • 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) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, supporting better long-term performance. Low costs are crucial as they directly impact net returns, allowing more of your investment to compound over time. Regularly reviewing and comparing expense ratios across funds can help identify opportunities to reduce costs further. By maintaining a focus on low-cost investments, you can enhance overall portfolio efficiency and maximize returns.

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