Balanced portfolio with strong US focus and diversified asset classes for moderate risk investors

Report created on Aug 17, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio primarily consists of mutual funds and ETFs, with a significant emphasis on the US market, covering various sectors and asset classes. The largest allocation is to a total market index fund, suggesting a foundational approach to capturing the broad market's returns. This is complemented by a growth index fund and a dividend equity ETF, indicating a blend of growth and income strategies. A notable aspect is the inclusion of specific stocks and international exposure, though these are relatively minor components. The portfolio's structure reflects a balanced approach, aiming for diversification while leaning towards equity for growth.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.20%, with a maximum drawdown of -25.31%. This performance suggests resilience during market downturns and the ability to capture upside effectively. The days contributing most to returns highlight the impact of significant market movements on the portfolio's growth. Comparing these figures against benchmarks would provide further context, but the raw numbers indicate a strong historical performance, especially for investors with a moderate risk tolerance.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, suggest a median increase of 431.9% in the portfolio's value. This wide range of outcomes underscores the uncertainty inherent in investing but also points to significant growth potential. While promising, it's crucial to remember that these projections are hypothetical and do not guarantee future results. Investors should consider these forecasts as one of many tools in their decision-making process.

Asset classes Info

  • Stocks
    93%
  • Bonds
    6%

The portfolio's asset allocation is heavily skewed towards stocks (93%), with a modest bond component (6%). This distribution aligns with the portfolio's balanced risk profile, aiming for growth through equities while using bonds to mitigate volatility. However, the relatively low bond allocation may not provide sufficient cushion during market downturns. Adjusting the equity-bond mix could offer a better balance between risk and return, especially for investors nearing retirement or with lower risk tolerance.

Sectors Info

  • Technology
    28%
  • Financials
    13%
  • Consumer Discretionary
    9%
  • Industrials
    8%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Energy
    4%
  • Real Estate
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Consumer Discretionary
    1%

Sector allocation reveals a heavy emphasis on technology, financial services, and consumer cyclical sectors. This concentration in high-growth areas can enhance returns but may also increase volatility, particularly in market corrections. Diversifying more evenly across sectors, including defensive ones like healthcare and consumer staples, could provide a smoother return profile and reduce sector-specific risks.

Regions Info

  • North America
    86%
  • Europe Developed
    4%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

With 86% of assets in North America, the portfolio shows a strong home bias, which is common but can limit global diversification benefits. Expanding exposure to developed markets in Europe and emerging markets in Asia could reduce geographic risk and tap into growth opportunities outside the US. This adjustment would be particularly relevant for investors looking to mitigate systemic risks associated with the US market.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega and large-cap stocks, which tend to be more stable and less volatile than smaller companies. However, this focus may limit growth potential compared to portfolios with a higher allocation to mid and small-cap stocks. Introducing more small and mid-cap exposure could enhance returns over the long term, albeit with increased volatility.

Redundant positions Info

  • Invesco NASDAQ 100 ETF
    VANGUARD GROWTH INDEX FUND ADMIRAL SHARES
    VALIC Company I U.S. Socially Responsible Fund
    FIDELITY ZERO LARGE CAP INDEX FUND
    Fidelity Total Market Index Fund
    High correlation
  • Vanguard FTSE All-World ex-US Small-Cap Index Fund ETF Shares
    FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
    High correlation

The analysis identifies highly correlated asset groups, indicating redundancy within the portfolio. This redundancy dilutes diversification benefits, as these assets are likely to respond similarly to market conditions. Streamlining the portfolio by reducing overlap can enhance efficiency, ensuring each holding contributes uniquely to the portfolio's risk-return profile.

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 involves addressing the identified highly correlated assets to improve diversification. By reallocating from overlapping investments to underrepresented asset classes or sectors, the portfolio can achieve a more efficient risk-return profile. This process, guided by the Efficient Frontier concept, seeks to maximize returns for a given level of risk. However, it's essential to consider personal investment goals and risk tolerance when making adjustments.

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%
  • Carrier Global Corp 1.30%
  • Costco Wholesale Corp 0.50%
  • FIDELITY ZERO LARGE CAP INDEX FUND 1.00%
  • Fidelity Total Market Index Fund 1.00%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.30%
  • VanEck High Yield Muni ETF 4.40%
  • Iron Mountain Incorporated 3.30%
  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • SPDR Portfolio High Yield Bond 7.50%
  • VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.30%
  • 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%
  • Waste Management Inc 1.40%
  • Financial Select Sector SPDR® Fund 1.40%
  • Weighted yield (per year) 1.44%

Dividend yields across various assets contribute to the portfolio's total return, with yields ranging significantly. High-yield bonds and dividend-paying stocks provide income, which can be particularly valuable in flat or declining markets. However, the overall yield of 1.44% suggests a moderate income contribution. Investors seeking higher income might consider increasing allocations to higher-yielding assets while balancing the associated risks.

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%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR Portfolio High Yield Bond 0.05%
  • VANGUARD GROWTH INDEX FUND ADMIRAL SHARES 0.05%
  • 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%
  • Financial Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.04%

The portfolio's costs are impressively low, with the Total Expense Ratio (TER) averaging around 0.04%. Low costs are crucial for long-term investment success, as they directly enhance net returns. This cost efficiency is a strong aspect of the portfolio, minimizing the drag on performance and allowing more of the investment returns to compound over time.

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