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A balanced portfolio with broad diversification and a focus on global equity exposure

Report created on Jan 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of equity ETFs, with a minor allocation to a single common stock. The Vanguard Total Stock Market Index Fund ETF Shares holds the largest share, providing broad U.S. market exposure. This structure aligns with a balanced investment strategy, offering both domestic and international diversification. Compared to a typical balanced portfolio, the allocation leans heavily on equities, which can enhance growth potential but also increase volatility. Consider evaluating if the current equity weighting aligns with your risk tolerance and goals.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.82%, which is a solid performance for a balanced strategy. The maximum drawdown of -34.19% highlights the potential risk during market downturns. Compared to benchmarks, the portfolio’s performance is commendable, although past performance does not guarantee future results. If the drawdown level is a concern, consider strategies to mitigate risk, such as diversifying into less correlated asset classes or adjusting the equity exposure.

Projection Info

Monte Carlo simulations project a range of outcomes based on historical data, with a median return of 302.1% over the investment horizon. This method offers insight into potential future performance, though it relies on past data and assumptions. The high number of simulations with positive returns suggests a favorable outlook. However, remember that simulations cannot predict exact outcomes. Periodically reviewing the portfolio’s alignment with your financial goals is advisable, especially if market conditions change.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, with 99% allocated to this asset class. While this can drive growth, it also increases exposure to market volatility. The minimal cash allocation provides limited liquidity and safety buffer. Comparing to a benchmark, the focus on equities is more aggressive. Consider whether introducing bonds or alternative investments could enhance diversification and potentially reduce risk, aligning with a balanced risk profile.

Sectors Info

  • Technology
    24%
  • Financials
    19%
  • Health Care
    12%
  • Industrials
    11%
  • Consumer Discretionary
    9%
  • Utilities
    7%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Basic Materials
    4%
  • Energy
    3%
  • Real Estate
    2%

Sector allocation shows a concentration in technology and financial services, comprising 43% of the portfolio. This concentration can benefit from sector growth trends but may also increase vulnerability to sector-specific downturns. Compared to common benchmarks, this allocation is reasonable, but monitoring sector trends is key. Consider diversifying further into underrepresented sectors to balance potential risks and capitalize on broader economic opportunities.

Regions Info

  • North America
    64%
  • Asia Emerging
    11%
  • Europe Developed
    10%
  • Asia Developed
    5%
  • Japan
    4%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%

The geographic distribution is heavily skewed towards North America, with 64% exposure. This reflects confidence in the region but may limit diversification benefits. Emerging markets and developed regions outside North America are underrepresented. Compared to global benchmarks, there is room for increased international diversification. Consider whether a more balanced geographic allocation could reduce regional risk and enhance growth potential.

Market capitalization Info

  • Large-cap
    37%
  • Mega-cap
    36%
  • Mid-cap
    20%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization is balanced between big and mega-cap stocks, making up 73% of the total. This provides stability and established growth, but the smaller allocation to small and micro-cap stocks may limit exposure to high-growth opportunities. Compared to typical market cap distributions, this is stable but could benefit from a slight shift to include more mid and small-cap stocks for diversification.

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.

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The portfolio can be optimized using the Efficient Frontier, which focuses on achieving the best possible risk-return ratio. This involves adjusting asset weights to maximize returns for a given level of risk. While the current allocation is balanced, exploring slight rebalancing could enhance efficiency. Remember, optimization is about improving risk-adjusted returns, not necessarily diversification or other goals.

Dividends Info

  • iShares U.S. Industrials ETF 0.90%
  • iShares Semiconductor ETF 0.50%
  • Toronto Dominion Bank 3.90%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Utilities Select Sector SPDR® Fund 2.80%
  • Health Care Select Sector SPDR® Fund 1.20%
  • Weighted yield (per year) 1.89%

The portfolio's dividend yield is 1.89%, contributing to overall returns, especially in volatile markets. Higher-yielding assets like Toronto Dominion Bank and the Vanguard FTSE Emerging Markets Index Fund ETF Shares boost income potential. For a balanced portfolio, dividends provide a steady income stream. If income generation is a priority, consider increasing exposure to high-dividend stocks or ETFs.

Ongoing product costs Info

  • iShares U.S. Industrials ETF 0.40%
  • iShares Semiconductor ETF 0.35%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Utilities Select Sector SPDR® Fund 0.09%
  • Health Care Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.08%

With a total expense ratio (TER) of 0.08%, the portfolio is cost-efficient. Lower costs can significantly improve long-term returns by reducing the drag on performance. Compared to industry averages, this TER is commendably low, supporting better net returns. Continue to monitor fund expenses and explore opportunities to further reduce costs without sacrificing diversification or performance.

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