Balanced portfolio with a strong focus on US equities and low-cost index funds

Report created on Jul 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards US equities, with 80% in the Vanguard 500 Index Fund and 20% in the Vanguard Total International Stock Index Fund. This composition reflects a balanced approach, albeit with a significant tilt towards the US market. The allocation across only two funds simplifies management but places heavy reliance on the performance of these markets.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.00%, with a maximum drawdown of -33.76%. The performance is notably influenced by a few days of significant gains, indicating that timing the market plays a crucial role in achieving these returns. Such historical performance, while impressive, should be viewed with caution as past performance is not a reliable indicator of future results.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a median increase of 305.6% in portfolio value. While the simulations show a high likelihood of positive returns (982 out of 1,000 scenarios), investors should remember that these projections are hypothetical and subject to the limitations of past data.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset class distribution is almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation underscores the portfolio's growth orientation but also implies higher volatility and risk compared to more diversified asset class allocations.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation is concentrated in technology (29%), financial services (16%), and consumer cyclical (11%), reflecting common trends in the US market. This concentration in growth-oriented sectors could lead to higher volatility, especially in market downturns, but also offers substantial upside during economic expansions.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (81%), with modest exposure to developed Europe (8%) and emerging Asia (3%). This geographic distribution emphasizes the portfolio's reliance on the performance of the US market, potentially limiting diversification benefits from global equities.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    18%
  • Small-cap
    1%

The market capitalization breakdown shows a preference for large-cap stocks (Mega 46%, Big 34%), which are typically less volatile than smaller companies. However, the minimal exposure to small (1%) and micro (0%) caps could mean missing out on the higher growth potential these companies often offer.

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.

While the portfolio shows strong historical performance, there's room for optimization towards the Efficient Frontier, which could potentially enhance the risk-return profile. Adjusting the asset allocation to include a wider variety of asset classes and geographic regions could improve diversification and reduce volatility.

Dividends Info

  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 0.90%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 2.10%
  • Weighted yield (per year) 1.14%

The dividend yield of the portfolio averages 1.14%, with the international fund offering a higher yield (2.10%) compared to the domestic fund (0.90%). While not a high-income portfolio, these dividends can provide a steady income stream and contribute to total returns.

Ongoing product costs Info

  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 0.04%
  • VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND ADMIRAL SHARES 0.09%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from very low costs, with a total expense ratio (TER) of 0.05%. This efficient cost structure is crucial for long-term investment success, as lower costs directly translate to higher net returns for investors.

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