Balanced Growth Portfolio with High Diversification and Moderate Risk Offering Strong Historical Returns

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a growth-oriented mindset, seeking capital appreciation over the long term. Such an investor is comfortable with moderate risk and market volatility, understanding that these are necessary for achieving higher returns. The investment horizon should ideally be long-term, allowing time to ride out market fluctuations. This investor values diversification but is willing to accept sector and regional biases for potential growth opportunities, balancing risk with the potential for substantial returns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    10.00%
  • SPDR Gold MiniShares
    GLDM - US98149E2046
    10.00%
  • Technology Select Sector SPDR® Fund
    XLK - US81369Y8030
    10.00%

The portfolio is composed of five ETFs, with a strong focus on large-cap U.S. equities through the Vanguard S&P 500 ETF, which makes up 50% of the portfolio. The remainder is diversified across international equities, small-cap U.S. stocks, gold, and technology. This composition suggests a strategy aimed at capitalizing on growth while maintaining diversification to mitigate risks. Such a setup can provide a stable foundation for growth, but it may benefit from periodic reviews to ensure alignment with market conditions and personal financial goals.

Growth Info

Historically, the portfolio has delivered an impressive CAGR of 16.04%, indicating robust growth over time. However, it has also experienced a significant maximum drawdown of -31.79%, which highlights the inherent risks associated with a growth-focused strategy. This performance suggests that while the portfolio has the potential for high returns, it is also susceptible to market volatility. It's essential to weigh these factors against personal risk tolerance and investment goals to ensure the portfolio meets long-term financial objectives.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the portfolio demonstrates a wide range of potential outcomes for a hypothetical initial investment. The median outcome projects a 622.24% return, with 988 simulations yielding positive returns. This illustrates the portfolio's potential for growth, albeit with some variability. Monte Carlo simulations provide a probabilistic view of future performance, helping investors understand the range of possible outcomes and prepare for various scenarios, emphasizing the importance of risk management and diversification.

Asset classes Info

  • Stocks
    90%
  • Other
    10%
  • Cash
    0%
  • No data
    0%

The portfolio is predominantly invested in stocks, accounting for approximately 89.63% of the total allocation. This heavy allocation to equities aligns with a growth-oriented strategy, aiming to capitalize on market appreciation over time. The inclusion of gold and a small cash position provides some diversification and a hedge against market volatility. While the current allocation supports growth, it's crucial to periodically reassess the balance between asset classes to ensure it aligns with evolving market conditions and personal risk tolerance.

Sectors Info

  • Technology
    30%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation within the portfolio is heavily weighted towards technology at 29.74%, followed by financial services and consumer cyclicals. This tilt towards technology suggests a belief in its continued growth potential. However, such concentration can also introduce sector-specific risks. Diversifying across a broader range of sectors could help mitigate these risks and provide more stable returns. Regularly reviewing sector allocations ensures that the portfolio remains balanced and responsive to changing economic landscapes.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

The geographic composition of the portfolio is predominantly focused on North America, with 70.96% allocated to this region. While this reflects confidence in the stability and growth potential of the U.S. market, it may expose the portfolio to regional economic risks. The inclusion of international equities offers some diversification, but expanding exposure to other regions could enhance resilience against market fluctuations. A well-balanced geographic allocation can help capture global growth opportunities and reduce reliance on any single market.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Technology Select Sector SPDR® Fund
    High correlation

The portfolio exhibits high correlation between certain assets, particularly the Vanguard S&P 500 ETF and the Technology Select Sector SPDR Fund. This correlation suggests overlapping exposure, which may reduce diversification benefits. While correlated assets can enhance returns during market upswings, they may also amplify losses during downturns. To optimize the portfolio's risk-return profile, it may be beneficial to reassess and adjust holdings to minimize redundancy and enhance diversification.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Technology Select Sector SPDR® Fund 0.70%
  • Weighted yield (per year) 1.42%

The portfolio's dividend yield stands at 1.42%, providing a modest income stream alongside capital appreciation. The Vanguard Total International Stock Index Fund ETF contributes the highest yield at 3.0%, while others offer lower yields. While dividend income can enhance total returns, the primary focus of this portfolio appears to be growth through capital gains. Investors seeking higher income may consider adjusting allocations to include more dividend-focused assets, but should balance this with their overall growth objectives.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR Gold MiniShares 0.10%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Technology Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, reflecting efficient cost management. Low costs are crucial in maximizing net returns over time, especially in a growth-focused portfolio. The Vanguard S&P 500 ETF, with an expense ratio of 0.03%, exemplifies cost-effective investing. While current costs are favorable, it's important to regularly review and compare them against industry benchmarks, ensuring that the portfolio remains competitive and cost-efficient in achieving its financial goals.

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.

The portfolio can be optimized by addressing asset overlap and enhancing diversification. Reducing highly correlated holdings may improve efficiency and risk-adjusted returns. Moving along the efficient frontier can help achieve a desired risk level, whether aiming for a riskier or more conservative portfolio. By focusing on diversification and reducing redundancy, investors can enhance the portfolio's performance without significantly altering its risk profile, paving the way for more consistent returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.