Balanced portfolio with a strong emphasis on U.S. and international equities and low costs

Report created on May 27, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is predominantly invested in equities, with a 75% allocation to U.S. markets and 25% to international markets through two low-cost ETFs. Its structure reflects a balanced approach, aiming to capture growth from a broad spectrum of the global equity market. The heavy tilt towards equities suggests an emphasis on capital appreciation over income, aligning with a growth-oriented investment strategy. However, the absence of bonds or alternative asset classes indicates limited diversification against equity market volatility.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.93%, with a significant drawdown of -34.91% during its worst period. This performance underscores the portfolio's growth potential but also highlights its susceptibility to market downturns. The days contributing most to returns suggest that a few key periods have driven much of the portfolio’s performance, a common characteristic of equity-focused investments.

Projection Info

Monte Carlo simulations, which estimate future performance by analyzing historical data, suggest a wide range of outcomes for this portfolio. With the majority of simulations indicating positive returns, the projections support the portfolio's potential for substantial growth over time. However, the broad spread between the 5th and 67th percentiles underscores the uncertainty and risk associated with a heavily equity-weighted investment strategy.

Asset classes Info

  • Stocks
    100%

The portfolio’s exclusive focus on stocks, without allocation to bonds, cash, or other asset classes, maximizes its growth potential but also increases its risk profile. This allocation is suitable for investors with a higher risk tolerance and a long-term investment horizon, as it lacks the stabilizing effect of more conservative assets like bonds, which can mitigate volatility and provide income.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Industrials
    11%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is diversified across technology, financial services, industrials, healthcare, and consumer cyclicals, which are significant components of the global economy. This sectoral spread is beneficial, as it reduces the impact of any single sector underperforming. However, the heavy weighting in technology and financial services sectors may increase volatility, given their sensitivity to economic cycles and interest rate changes.

Regions Info

  • North America
    77%
  • Europe Developed
    14%
  • Japan
    5%
  • Asia Developed
    2%
  • Australasia
    2%

The geographic distribution is heavily skewed towards North America, with significant exposure to developed markets in Europe and Japan. This allocation benefits from the stability and growth potential of developed economies but has limited exposure to emerging markets, which could offer higher growth potential albeit with increased risk. Expanding geographic diversity could enhance returns and reduce risk over the long term.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's focus on mega and big-cap stocks provides stability and reduces volatility compared to smaller-cap investments. These companies are typically more established and financially robust, making them less susceptible to market fluctuations. However, the relatively smaller allocation to medium, small, and micro-cap stocks limits the portfolio's potential to benefit from the higher growth rates these smaller companies can offer.

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.

The current allocation demonstrates a well-considered balance between risk and return, closely aligning with the Efficient Frontier, which suggests an optimal risk-return profile based on historical data. While the portfolio is positioned for growth, investors should periodically review their allocation to ensure it remains aligned with their risk tolerance and investment goals, especially as market conditions evolve.

Dividends Info

  • Schwab U.S. Broad Market ETF 1.30%
  • Schwab International Equity ETF 2.80%
  • Weighted yield (per year) 1.68%

The portfolio’s dividend yield of 1.68% contributes to its total return, offering a modest income stream in addition to capital appreciation. This yield is a result of its equity allocation, with international equities providing a higher yield than U.S. stocks. For investors seeking growth, this dividend rate complements the portfolio's overall return potential, though it's lower than what fixed-income investments might offer.

Ongoing product costs Info

  • Schwab U.S. Broad Market ETF 0.03%
  • Schwab International Equity ETF 0.06%
  • Weighted costs total (per year) 0.04%

With a Total Expense Ratio (TER) of just 0.04%, the portfolio stands out for its cost-efficiency, which is crucial for long-term growth. Lower costs translate directly into higher net returns for investors, making this portfolio an attractive option for cost-conscious investors aiming to maximize their investment growth over time.

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