A globally diversified portfolio with a strong focus on stocks and minimal costs

Report created on Jul 23, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio primarily consists of two ETFs: the Vanguard Total World Stock Index Fund ETF Shares, making up 80%, and the Vanguard Total Stock Market Index Fund ETF Shares, covering the remaining 20%. The heavy weighting towards the Total World Stock ETF suggests a broad global exposure, while the inclusion of the Total Stock Market ETF adds a focused emphasis on the U.S. market. This blend indicates a strategy aiming for comprehensive coverage of the global stock market, albeit with a significant tilt towards the United States.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.97%, with a maximum drawdown of -34.37%. These figures suggest a resilient performance over time, balancing growth with acceptable levels of risk. The days contributing most significantly to returns highlight the portfolio's potential for both volatility and substantial reward. Comparing this performance to benchmarks would depend on the specific indexes chosen, but the growth rate is promising for a balanced-risk profile.

Projection Info

Monte Carlo simulations, with 1,000 iterations, project a wide range of outcomes, from a 5th percentile low of 61.8% to a 67th percentile high of 574.7% potential growth. This wide variance underscores the inherent uncertainties in market behaviors but also signals strong upside potential. The simulations' average annualized return of 13.70% further supports the portfolio's robust growth prospects, though it's essential to remember that these projections are hypothetical and not guaranteed.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (99%), with a nominal cash position (1%). This composition aligns with the portfolio's balanced risk classification but leans towards the higher end of the risk spectrum within that category. The lack of bonds or alternative investments might limit the portfolio's ability to hedge against stock market volatility, suggesting a need for greater diversification across asset classes for risk management.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation within the portfolio is concentrated in Technology (26%), Financial Services (17%), and Industrials (11%), among others. This sector distribution reflects a growth-oriented strategy, with a significant bet on tech's continued dominance. However, the heavy focus on a few sectors could increase vulnerability to sector-specific downturns. Diversifying more evenly across sectors could help mitigate this risk.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation shows a strong bias towards North America (72%), with modest exposures to Europe Developed (12%) and various emerging and developed markets in Asia and elsewhere. This geographic distribution suggests a belief in the continued outperformance of North American markets, particularly the U.S. However, the underrepresentation of emerging markets may limit exposure to high-growth regions, potentially capping the portfolio's long-term growth ceiling.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization exposure leans heavily towards mega (42%) and big (31%) cap stocks, with lesser allocations to medium, small, and micro caps. This bias towards larger companies is consistent with the portfolio's balanced risk profile, as these companies are typically more stable. However, the limited exposure to smaller cap stocks may reduce opportunities for outsized gains that these riskier investments can offer.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the two ETFs in the portfolio indicates a significant overlap in holdings, particularly in the U.S. stock market. This redundancy limits the diversification benefits and exposes the portfolio to concentrated market risks. Diversifying into non-correlated assets or sectors could enhance the portfolio's resilience against market volatility.

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.

Given the high correlation between the ETFs and the portfolio's current asset allocation, there's an opportunity to optimize for risk-return efficiency. Removing overlapping assets and diversifying into different asset classes or sectors could improve the portfolio's risk-adjusted returns. This approach aligns with the Efficient Frontier theory, aiming to achieve the best possible balance between risk and return.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.60%

The dividend yields from the ETFs, averaging 1.60%, contribute to the portfolio's total returns. While not the primary focus, these dividends offer a modest cushion during market downturns and a source of passive income. Considering the portfolio's growth orientation, the current yield is reasonable, but investors seeking higher income might look to increase allocations to higher-yielding assets.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) of 0.06% is impressively low, enhancing its appeal by minimizing the drag on returns due to costs. This cost efficiency is a significant advantage, allowing more of the portfolio's gross returns to contribute to net growth. Investors should maintain this focus on cost efficiency when considering any adjustments or additions to the portfolio.

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