Balanced and highly diversified portfolio with a strong focus on major ETFs and low costs

Report created on Sep 11, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of three Vanguard ETFs, with a heavy emphasis on equities (90%) and a smaller allocation to bonds (10%). The Vanguard S&P 500 ETF, making up 65% of the portfolio, provides broad exposure to the largest U.S. companies. The international component is addressed by the Vanguard Total International Stock Index Fund ETF Shares, accounting for 25% of the portfolio. The remaining 10% is in the Vanguard Total Bond Market Index Fund ETF Shares, offering diversification into fixed income. This composition reflects a balanced approach, leaning towards growth with a cushion provided by bonds.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.57%, with a maximum drawdown of -31.60%. These figures suggest the portfolio has offered strong returns but not without significant volatility. The max drawdown indicates the highest peak-to-trough decline during the portfolio's history, highlighting the risk of substantial short-term losses. Investors should be prepared for similar fluctuations in the future, keeping in mind that past performance is not indicative of future results.

Projection Info

Using Monte Carlo simulation, a method that forecasts potential outcomes by varying random variables within historical ranges, the portfolio's future performance has been estimated. With 1,000 simulations, key percentiles show a wide range of outcomes, from a 27.4% increase at the 5th percentile to a 295.3% increase at the 67th percentile. This suggests a high likelihood of positive returns, but also underscores the uncertainty inherent in all investments.

Asset classes Info

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

The portfolio's allocation is heavily skewed towards stocks (89%), with a modest inclusion of bonds (10%) and a minimal cash position (1%). This asset mix underlines a growth-oriented strategy while maintaining a degree of safety through bond diversification. However, the minimal cash allocation might limit flexibility in rapidly changing markets or taking advantage of new investment opportunities.

Sectors Info

  • Technology
    26%
  • Financials
    15%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral distribution within the portfolio is well-diversified, with technology (26%) and financial services (15%) being the most prominent. This sectoral spread is reflective of the current market composition, especially within the S&P 500. While this allocation benefits from growth in tech and finance, it also exposes the portfolio to sector-specific downturns, such as regulatory changes or economic shifts affecting these industries.

Regions Info

  • North America
    67%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly invested in North America (67%), with meaningful exposure to developed European markets (10%) and smaller allocations across various global regions. This distribution suggests a strong home bias with an attempt at international diversification. However, the limited exposure to emerging markets and specific regions like Latin America and Africa/Middle East may restrict potential growth from these high-growth areas.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    16%
  • Small-cap
    1%

The market capitalization breakdown reveals a focus on mega (42%) and big (30%) cap stocks, which is consistent with the pursuit of stability and reduced volatility. Medium cap stocks (16%) provide some growth potential, while the negligible allocation to small and micro caps (1%) suggests a cautious approach to risk. This cap-size distribution supports a balanced risk-return profile but may limit exposure to high-growth opportunities in smaller companies.

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.

Regarding risk vs. return optimization, the current allocation appears well-positioned on the Efficient Frontier, indicating an efficient balance between risk and expected return based on historical data. However, it's important to remember that this efficiency is relative to the portfolio's existing assets and their historical performances. Continuous monitoring and rebalancing are essential to maintain this optimization, especially as market conditions evolve.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.84%

The portfolio's dividend yield stands at 1.84%, with the bond component contributing a higher yield of 3.80%. This yield provides a steady income stream, contributing to the portfolio's total return. While not the primary focus, the dividends offer a cushion during market downturns and compound over time, enhancing long-term growth.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Low costs are crucial for long-term investment success, as they compound over time, significantly affecting the portfolio's growth. This cost efficiency is a strong aspect of the portfolio, aligning well with best practices in investment management.

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