Balanced and moderately diversified portfolio with a strong focus on North American equities

Report created on Jul 22, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equities, with a significant emphasis on North American markets, particularly the United States and Canada. The Vanguard S&P 500 Index ETF, constituting over half of the portfolio, offers broad exposure to the U.S. equity market, while the Vanguard FTSE Canada All Cap and iShares Core MSCI EAFE IMI ETFs provide Canadian and international diversification, respectively. The concentration in large and mega-cap stocks suggests a bias towards stability and established companies, although this may limit exposure to high-growth opportunities in smaller companies and emerging markets.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 12.28%, with a maximum drawdown of -29.27%. This performance indicates a relatively high level of return for the associated risk, as evidenced by the portfolio's risk score of 4 out of 7. The days that make up 90% of returns highlight the importance of staying invested over the long term, as significant gains can occur sporadically and unpredictably.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a median annualized return of 11.81% across 1,000 scenarios. This projection, while not a guarantee, supports the portfolio's classification as balanced, aiming to provide steady growth while managing volatility. However, investors should remain aware that past performance is not indicative of future results, and projections are inherently uncertain.

Asset classes Info

  • US Equity
    56%
  • Stocks
    23%

The portfolio's asset allocation is heavily skewed towards equities, with a small allocation in cash or equivalents implied by the absence of such assets. This allocation reflects a growth-oriented strategy but may increase volatility. Diversification across asset classes could be improved by incorporating fixed income or alternative investments to reduce risk and enhance portfolio stability, especially in turbulent market conditions.

Sectors Info

  • Technology
    22%
  • Financials
    20%
  • Industrials
    11%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    6%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Utilities
    3%
  • Real Estate
    2%

Sectoral allocation shows a strong preference for technology and financial services, followed by industrials, consumer cyclicals, and healthcare. This concentration in sectors that can be cyclical and sensitive to economic changes might increase the portfolio's volatility. However, it also positions the portfolio to benefit from growth in these industries. Diversifying into more defensive sectors or increasing allocations to underrepresented areas could provide a buffer during market downturns.

Regions Info

  • North America
    79%
  • Europe Developed
    13%
  • Japan
    5%
  • Australasia
    2%
  • Asia Developed
    1%

Geographically, the portfolio is heavily concentrated in North America, with minimal exposure to emerging markets and other developed regions outside of Europe and Japan. This concentration benefits from the stability and growth of North American economies but may miss out on potential gains from faster-growing emerging markets. Increasing geographic diversification could reduce regional risk and tap into growth opportunities elsewhere.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    18%
  • Small-cap
    2%

The focus on mega and big-cap stocks underlines the portfolio's preference for stability and established companies. While this may reduce volatility, it also limits potential upside from small and micro-cap stocks, which can offer higher growth rates. Consider diversifying the market capitalization spectrum to capture growth opportunities in smaller companies while maintaining a core of stability from larger firms.

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.

Considering the portfolio's current allocation, optimizing for the Efficient Frontier could enhance the risk-return profile. This optimization involves adjusting asset weights to achieve the highest possible returns for a given level of risk. While the portfolio is well-positioned within a balanced risk classification, minor adjustments in asset allocation could potentially offer improved diversification and efficiency without dramatically altering the risk profile.

Dividends Info

  • Vanguard FTSE Canada All Cap 1.90%
  • Vanguard S&P 500 Index ETF 0.80%
  • iShares Core MSCI EAFE IMI 1.00%
  • Weighted yield (per year) 1.09%

The portfolio's overall dividend yield of 1.09% contributes to its total return, albeit modestly. Given the growth orientation, dividends play a secondary role to capital appreciation. For investors seeking income, increasing exposure to higher-yielding assets or sectors known for dividends, such as utilities or real estate, may enhance income without significantly compromising growth potential.

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