A forward-looking balanced portfolio with a strong foundation in retirement and S&P 500 funds

Report created on Jul 19, 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 predominantly invested in the Vanguard Target Retirement 2060 Fund, complemented by positions in the Vanguard S&P 500 ETF, Vanguard S&P 500 Growth Index Fund ETF Shares, and a stake in Costco Wholesale Corp. This composition suggests a strategic focus on long-term growth through diversified exposure to a mix of asset classes, primarily stocks, with a smaller allocation to bonds and cash. The heavy reliance on a retirement fund implies a preference for a managed, age-adjusting asset allocation designed to gradually become more conservative as the target date approaches.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.96%, with a maximum drawdown of -30.40%. These figures indicate a robust growth trajectory, albeit with significant volatility. The drawdown figure, in particular, highlights periods of substantial value decrease, which is an important consideration for assessing risk tolerance. The days contributing most to returns suggest that a few significant market moves have driven a large portion of the portfolio’s performance, a common characteristic of equity-heavy investments.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a potential increase of 693.4%, with a high degree of variability indicated by the 5th and 67th percentiles. While these simulations offer valuable insights, it's crucial to remember they are based on past trends and cannot guarantee future results. The high number of simulations with positive returns underscores the portfolio's growth potential but also emphasizes the importance of understanding the inherent uncertainties in market-based forecasts.

Asset classes Info

  • Stocks
    91%
  • Bonds
    7%
  • Cash
    2%

The asset allocation is heavily skewed towards stocks (91%), with a modest presence of bonds (7%) and a small cash reserve (2%). This distribution aligns with the portfolio’s growth-oriented strategy but also entails higher volatility and risk, especially in short-term market downturns. The bond allocation provides some cushion against market volatility, while the cash position allows for flexibility and opportunistic investments.

Sectors Info

  • Technology
    24%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Staples
    9%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    3%
  • Utilities
    2%
  • Consumer Discretionary
    1%

Sector allocation reveals a significant emphasis on technology and financial services, followed by industrials, consumer defensive, and healthcare. This sector spread indicates a balanced approach, leveraging growth opportunities in tech and financials while maintaining stability through defensive sectors. However, the heavy tech weighting may expose the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts.

Regions Info

  • North America
    68%
  • Europe Developed
    14%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation is predominantly North American (68%), with diversified exposure across developed European markets, emerging Asian economies, and other regions. This global distribution enhances diversification, reducing the risk associated with any single market. However, the substantial North American focus may reflect home bias, potentially limiting opportunities in faster-growing international markets.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    27%
  • Mid-cap
    16%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega (43%) and big (27%) cap stocks, with smaller allocations to medium, small, and micro caps. This bias towards larger companies is consistent with a strategy prioritizing stability and steady growth, as these firms typically have more established business models and global footprints. However, the underrepresentation of smaller caps could mean missing out on higher growth potential.

Redundant positions Info

  • Vanguard S&P 500 Growth Index Fund ETF Shares
    VANGUARD TARGET RETIREMENT 2060 FUND INVESTOR SHARES
    Vanguard S&P 500 ETF
    High correlation

The high correlation among the Vanguard Target Retirement 2060 Fund, Vanguard S&P 500 ETF, and Vanguard S&P 500 Growth Index Fund ETF Shares suggests overlapping exposures, which may limit diversification benefits. While these investments individually offer broad market access, their similar compositions mean that portfolio diversification could be improved by exploring assets with differing performance drivers.

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 already exhibits a strong risk-return profile, optimization analysis suggests potential for improvement. By addressing the high correlation among key holdings, diversification can be enhanced without significantly altering the portfolio's risk level. The optimal portfolio projection, with an expected return of 21.64% and a risk level of 20.30%, indicates that strategic reallocation could yield higher returns for the same level of risk.

Dividends Info

  • Costco Wholesale Corp 0.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.50%
  • VANGUARD TARGET RETIREMENT 2060 FUND INVESTOR SHARES 2.00%
  • Weighted yield (per year) 1.82%

The portfolio's dividend yield stands at 1.82%, contributed by individual holdings with yields ranging from 0.50% to 2.00%. This yield level indicates a modest income component, supplementing growth returns. For long-term investors, reinvesting these dividends can significantly enhance compounding growth, though the focus remains on capital appreciation rather than immediate income generation.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.10%
  • VANGUARD TARGET RETIREMENT 2060 FUND INVESTOR SHARES 0.08%
  • Weighted costs total (per year) 0.08%

With a total expense ratio (TER) of 0.08%, the portfolio benefits from relatively low costs, a crucial factor in maximizing long-term returns. Low-cost funds like these ensure that a greater portion of investment returns is retained by the investor, rather than being eroded by fees. This cost efficiency is particularly beneficial in a growth-oriented portfolio where compound growth plays a vital role.

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