A balanced portfolio with significant S&P 500 exposure and low geographic diversification

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

Balanced Investors

This portfolio suits an investor seeking balanced growth with moderate risk tolerance and a focus on U.S. equities. It is ideal for individuals with a medium to long-term investment horizon who prioritize growth over income but still appreciate some dividend yield. The heavy weighting in large-cap stocks suggests a preference for stability and proven performance, while the limited geographic diversification indicates comfort with U.S. market exposure. Investors with this profile should be prepared for volatility but can expect strong potential returns over time.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%
  • SPDR Portfolio MSCI Global Stock Market
    SPGM - US78463X4759
    10.00%
  • Vanguard S&P 500 Growth Index Fund ETF Shares
    VOOG - US9219325050
    10.00%
  • Vanguard S&P 500 Value Index Fund ETF Shares
    VOOV - US9219327031
    10.00%
  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    10.00%
  • Vanguard High Dividend Yield Index Fund ETF Shares
    VYM - US9219464065
    10.00%

The portfolio is heavily weighted towards the Vanguard S&P 500 ETF, comprising 50% of the total. This indicates a strong focus on large-cap U.S. stocks. Other holdings include diverse ETFs covering growth, value, and high dividend yield stocks, each making up 10% of the portfolio. Compared to common benchmarks, this composition leans towards a concentrated approach, primarily in U.S. equities. While this can offer robust growth potential, it limits exposure to smaller caps and international markets. To enhance diversification, consider adding more varied asset classes or international equities, which could provide a buffer against U.S.-specific market downturns.

Growth Info

Historically, the portfolio has shown impressive growth with a Compound Annual Growth Rate (CAGR) of 13.21%. This suggests strong historical performance, likely driven by the U.S. stock market's overall upward trend. However, the maximum drawdown of -34.12% indicates significant volatility during downturns, typical for equity-heavy portfolios. Comparing this to broader market benchmarks, the performance is commendable, but it also highlights the risks involved. To mitigate potential future drawdowns, consider gradually incorporating less volatile assets, such as bonds or alternative investments, which can stabilize returns during market corrections.

Projection Info

Forward projections using Monte Carlo simulations suggest a median return of 380.15%, with 986 out of 1,000 simulations showing positive outcomes. Monte Carlo analysis uses historical data to simulate a range of possible future outcomes, offering a probabilistic view of potential returns. While the projections are optimistic, it's crucial to remember that these simulations rely on past data and assumptions, which may not account for future market changes. To better prepare for uncertainty, regularly review and adjust the portfolio in response to evolving market conditions and personal financial goals.

Asset classes

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • No data
    0%
  • Bonds
    0%

The portfolio's asset allocation is overwhelmingly concentrated in stocks, with nearly 100% in equities. This lack of diversification across asset classes can lead to increased volatility and risk during market downturns. In comparison, a balanced benchmark might include a mix of bonds, cash, and alternative investments to provide stability. To reduce risk and enhance diversification, consider incorporating a broader range of asset classes, such as fixed income or real estate, which can offer more consistent returns and a hedge against stock market volatility.

Sectors

  • Technology
    29%
  • Financials
    15%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%
  • Basic Materials
    2%

The portfolio displays a strong concentration in the technology sector, accounting for 29.20% of the total. This is significantly higher than typical benchmarks and suggests potential vulnerability to tech sector volatility, such as during periods of regulatory scrutiny or interest rate hikes. While tech stocks have driven growth, a more balanced sector allocation could reduce risk. Consider diversifying into sectors like consumer staples or utilities, which tend to perform well in different economic conditions, providing stability and reducing reliance on any single sector's performance.

Regions

  • North America
    96%
  • Europe Developed
    2%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily skewed towards North America, with 96.26% exposure. This concentration limits the benefits of international diversification, which can reduce risk by spreading investments across different economic regions. Compared to global benchmarks, this allocation is underexposed to emerging markets and developed regions outside the U.S. To enhance geographic diversification, consider increasing allocations to international equities, which could offer growth opportunities and reduce the impact of U.S.-specific economic events on the portfolio.

Redundant positions

  • Vanguard S&P 500 Growth Index Fund ETF Shares
    Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation
  • Vanguard High Dividend Yield Index Fund ETF Shares
    Vanguard S&P 500 Value Index Fund ETF Shares
    High correlation

The portfolio contains highly correlated assets, particularly within the S&P 500-focused ETFs. Correlated assets tend to move in the same direction, which can magnify losses during market downturns and limit diversification benefits. While these ETFs offer exposure to different facets of the S&P 500, their performance is likely closely linked. To improve diversification, consider reducing overlap by selecting assets with lower correlation, such as international or sector-specific ETFs, which can provide unique performance drivers and reduce overall portfolio volatility.

Dividends

  • SPDR Portfolio MSCI Global Stock Market 0.80%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.30%
  • Vanguard S&P 500 Value Index Fund ETF Shares 1.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.25%

The portfolio's total dividend yield stands at 1.25%, with the Vanguard High Dividend Yield Index Fund contributing the highest yield at 2.7%. Dividends can provide a steady income stream and are particularly appealing in volatile markets. For a balanced investor, maintaining a reasonable dividend yield is beneficial for generating passive income while still pursuing growth. To enhance income potential, consider increasing allocations to dividend-focused assets or exploring high-yield alternatives, keeping in mind the trade-off between yield and growth potential.

Ongoing product costs

  • SPDR Portfolio MSCI Global Stock Market 0.09%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard S&P 500 Growth Index Fund ETF Shares 0.10%
  • Vanguard S&P 500 Value Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, indicating cost efficiency. Lower costs can significantly enhance long-term returns, as fees compound over time. Compared to industry averages, this TER is highly competitive, supporting the portfolio's growth potential. To maintain cost efficiency, regularly review the expense ratios of current holdings and explore opportunities to replace higher-cost assets with more affordable alternatives, ensuring that cost savings do not compromise diversification or performance.

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.

Optimizing the portfolio through the Efficient Frontier could enhance the risk-return ratio. The Efficient Frontier represents the best possible balance of risk and return for a given set of investments. By adjusting the current asset weights, the portfolio could achieve a more optimal position on this frontier. This does not necessarily mean adding new assets but rather reallocating existing ones to maximize efficiency. Regularly reassess the portfolio's alignment with the Efficient Frontier to ensure it continues to meet risk-return objectives.

What next?

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.