A broadly diversified balanced portfolio with low costs and exposure to global equities

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 long-term horizon. It prioritizes broad exposure to global equities, offering potential for significant growth while maintaining diversification. Ideal for individuals looking to build wealth over time, this portfolio benefits from low costs and a focus on both U.S. and international markets.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    70.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    30.00%

The portfolio is composed of two ETFs: the Vanguard Total Stock Market Index Fund ETF, making up 70%, and the Vanguard Total International Stock Index Fund ETF, at 30%. This allocation provides a strong foundation in U.S. equities while incorporating international diversification. Compared to a typical balanced portfolio, this one leans heavily towards equities, which can offer growth but also introduces volatility. To align more closely with a traditional balanced portfolio, consider adding fixed-income assets for stability.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 11.64%, indicating strong past performance. The max drawdown of -34.61% highlights periods of significant loss, typical in equity-heavy portfolios. These figures suggest a robust growth potential but also underline the risk of substantial short-term volatility. While past performance is no guarantee of future returns, maintaining a long-term investment horizon could help weather market fluctuations.

Projection Info

Monte Carlo simulations use historical data to project potential future outcomes, offering insights into possible portfolio performance. With 1,000 simulations, this portfolio shows a median projected return of 238.12%, with a 67th percentile outcome of 358.9%. Such projections highlight the potential for significant growth, but remember, they rely on past data and assumptions. Regularly reviewing and adjusting the portfolio based on changing market conditions and personal goals is essential.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is heavily weighted towards stocks, with 98.89% in equities and minimal cash or other assets. This concentration in a single asset class can offer high growth potential but also increases risk. For improved risk management, consider diversifying into fixed-income or alternative assets. This could help balance the portfolio, reducing volatility and providing income during market downturns.

Sectors Info

  • Technology
    26%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is diverse, with notable weights in Technology (26.36%), Financial Services (15.93%), and Consumer Cyclicals (11.17%). While this sector spread supports diversification, the high concentration in technology could expose the portfolio to volatility, especially during economic shifts or interest rate changes. Reviewing sector weights periodically and adjusting as needed can help maintain balance and mitigate sector-specific risks.

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%
  • Europe Emerging
    0%

The portfolio's geographic allocation is dominated by North America (72.15%), with smaller exposures to Europe and Asia. This U.S.-centric focus aligns with the Vanguard Total Stock Market Index Fund's composition but may limit benefits from international growth opportunities. Consider increasing exposure to underrepresented regions to enhance diversification and capture potential growth in emerging markets.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 1.93%

With a total dividend yield of 1.93%, the portfolio provides a modest income stream. The international ETF contributes a higher yield (3.4%) compared to the U.S. ETF (1.3%). Dividends can offer stability and income, especially during market downturns. For investors seeking higher income, consider increasing allocations to dividend-focused funds or sectors known for reliable payouts.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, thanks to the cost-efficient Vanguard ETFs. Low costs are crucial for long-term performance, as they minimize the drag on returns. This efficient cost structure is a significant advantage, supporting better net returns over time. Maintaining this low-cost strategy is advisable, ensuring any new investments or adjustments also prioritize cost efficiency.

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.

The portfolio's current allocation can be optimized using the Efficient Frontier concept, which seeks the best risk-return ratio. This involves adjusting the weights of existing assets to achieve a more efficient balance. While the portfolio is already well-diversified, exploring optimization could enhance returns without significantly increasing risk. Regular reviews and adjustments based on changing market conditions and personal goals are recommended.

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