Balanced portfolio with a diversified approach and a focus on steady growth

Report created on Aug 17, 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 structured with a heavy emphasis on stocks (79%) and bonds (20%), with a minimal cash position (1%). The largest allocation is to a total market index fund, making up nearly half of the portfolio, followed by a significant international exposure and a mix of dividend, small-cap, and bond ETFs. This composition suggests a balanced approach, aiming for growth through equities while using bonds to mitigate risk. Compared to a typical balanced portfolio benchmark, this allocation is slightly more aggressive given its high equity exposure.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.33%, with a maximum drawdown of -31.82%. These figures indicate a robust growth trajectory albeit with notable volatility, reflecting the inherent risks of a stock-heavy portfolio. The performance is impressive, but it's crucial to remember that past results don't guarantee future returns. Benchmarking this performance against a relevant balanced fund or index would provide additional context, especially to evaluate the efficiency of the equity-bond mix.

Projection Info

Monte Carlo simulations, using historical data to forecast future performance, suggest a wide range of outcomes, with a median increase of 131.5% in portfolio value. This method, while useful for understanding potential volatility and reward, relies on past trends which may not repeat. Given that 95.2% of simulations returned positive outcomes, the portfolio appears positioned for growth, but investors should prepare for any scenario, including those in the lower percentiles.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%

The allocation across asset classes with a dominant stock component exposes the portfolio to higher growth potential and volatility. The bond allocation, including diversified types like high yield and international bonds, serves as a counterbalance, offering income and some protection against stock market fluctuations. This mix aligns with a balanced investment strategy, though the specific percentages could be adjusted based on changing risk tolerance and market conditions.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Discretionary
    6%
  • Telecommunications
    6%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Consumer Discretionary
    2%
  • Utilities
    2%

Sector allocation is diversified, with the highest weightings in technology and financial services. This sector spread is reflective of the broader market but may lead to increased volatility, especially in tech-heavy periods or financial downturns. Considering the cyclical nature of sectors like consumer cyclicals and energy, the portfolio could benefit from a periodic review to ensure alignment with economic cycles and sector performance forecasts.

Regions Info

  • North America
    65%
  • Europe Developed
    8%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (65%), with modest exposure to developed Europe and emerging markets. This distribution suggests a conservative approach to international investing, potentially limiting exposure to global growth opportunities. Diversifying further into emerging and developed markets could enhance growth prospects and reduce the risk of regional downturns affecting overall performance.

Market capitalization Info

  • Mega-cap
    25%
  • Large-cap
    24%
  • Mid-cap
    18%
  • Small-cap
    9%
  • Micro-cap
    2%

The market capitalization breakdown shows a balanced exposure across mega, big, and medium-sized companies, with a smaller allocation to small and micro-caps. This distribution is prudent for a balanced portfolio, offering stability from large caps and growth potential from smaller companies. However, the relatively low allocation to small and micro-caps could be a missed opportunity for higher growth, albeit at increased risk.

Redundant positions Info

  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares
    FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
    High correlation

The high correlation between certain international funds suggests redundancy, which could be limiting the portfolio's diversification benefits. Identifying and addressing overlapping exposures can enhance the portfolio's efficiency by reducing unnecessary risk without sacrificing potential returns. This step is crucial for maintaining a balanced risk-reward ratio and ensuring each investment contributes uniquely to the portfolio's objectives.

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.

Optimizing the portfolio along the Efficient Frontier could further enhance its risk-return profile. This process involves adjusting allocations to achieve the best possible balance between risk and return. Given the current asset mix, focusing on reducing overlap and potentially increasing diversification, especially geographically and by market capitalization, could move the portfolio closer to the optimal point on the Efficient Frontier.

Dividends Info

  • Vanguard Long-Term Bond Index Fund ETF Shares 4.70%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard Total International Bond Index Fund ETF Shares 4.30%
  • Fidelity Total Market Index Fund 1.00%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.30%
  • VanEck High Yield Muni ETF 4.40%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • SPDR Portfolio High Yield Bond 7.50%
  • Vanguard Small-Cap Value Index Fund ETF Shares 2.00%
  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares 2.80%
  • Vanguard Emerging Markets Government Bond Index Fund ETF Shares 6.20%
  • Weighted yield (per year) 2.31%

Dividend yields across the portfolio contribute to its total return, offering a mix of income and growth. The yields vary significantly, from lower-yielding total market funds to high-yield bonds, reflecting a strategic approach to income generation. For a balanced portfolio, this blend can provide steady cash flow while participating in market growth, though the focus should remain on total return rather than yield chasing.

Ongoing product costs Info

  • Vanguard Long-Term Bond Index Fund ETF Shares 0.04%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Bond Index Fund ETF Shares 0.07%
  • Fidelity Total Market Index Fund 0.02%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • VanEck High Yield Muni ETF 0.32%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR Portfolio High Yield Bond 0.05%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares 0.08%
  • Vanguard Emerging Markets Government Bond Index Fund ETF Shares 0.20%
  • Weighted costs total (per year) 0.05%

The portfolio's overall expense ratio is low, averaging 0.05%, which is commendable. Lower costs directly translate to higher net returns over time, making this an efficient portfolio from a cost perspective. Regularly reviewing fund fees and exploring lower-cost alternatives for similar exposures can ensure costs remain competitive, preserving more of the portfolio's growth for the investor.

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