A balanced ETF portfolio with strong diversification and efficient cost management

Report created on Mar 26, 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 is composed of two ETFs: the Vanguard Total Stock Market Index Fund ETF (70%) and the Vanguard Total International Stock Index Fund ETF (30%). This allocation provides broad exposure to both U.S. and international equities. The portfolio's composition aligns with a balanced risk profile, offering diversification across global markets. A comparison to benchmark indices reveals a well-rounded structure, ensuring exposure to a wide range of sectors and geographies. To maintain this balance, regularly review the portfolio's asset allocation, especially if market conditions shift significantly, potentially affecting the weightings.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.02%, suggesting strong past performance. A hypothetical investment would have grown significantly, though it's important to note that past performance does not guarantee future results. The portfolio's maximum drawdown of -34.59% indicates potential volatility during market downturns. Comparatively, this performance is in line with broad market indices, reflecting the portfolio's diversified nature. To manage volatility, consider maintaining a long-term perspective and not reacting impulsively to short-term market fluctuations.

Projection Info

Forward projections using Monte Carlo simulations estimate a median portfolio growth of 232.2%, with a 10.31% annualized return across simulations. Monte Carlo analysis uses historical data to simulate potential future outcomes, but it's crucial to remember that these projections are not certain. The simulations show a high likelihood of positive returns, reinforcing the portfolio's balanced risk profile. To optimize future performance, periodically review the simulations and adjust the portfolio's allocations if necessary, ensuring they still align with your risk tolerance and investment goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% in equities and 1% in cash. This allocation provides exposure to potential high returns but also increases volatility. Compared to typical benchmarks, this asset class distribution is aggressive, focusing on growth. To enhance diversification, consider incorporating other asset classes like bonds or commodities, which could provide stability during market fluctuations. Balancing asset classes can help mitigate risk and achieve a more diversified portfolio, particularly if your investment goals or risk tolerance change over time.

Sectors Info

  • Technology
    25%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

The sector allocation is diverse, with technology (25%) leading, followed by financial services (17%) and consumer cyclicals (11%). This distribution is similar to common benchmarks, indicating a well-diversified sector exposure. However, a tech-heavy portfolio might experience volatility during interest rate hikes. To manage sector risks, regularly review sector weightings and consider rebalancing if any sector becomes disproportionately large. Staying informed about sector trends and potential impacts on your portfolio can help maintain a balanced risk-return profile.

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%

Geographically, the portfolio is heavily weighted towards North America (72%), with limited exposure to emerging markets. This allocation is typical for U.S.-based portfolios but may limit international diversification. Compared to global benchmarks, the portfolio is underexposed to regions like Latin America and Africa/Middle East. To enhance geographic diversification, consider increasing exposure to emerging markets, which can provide growth opportunities and reduce reliance on North American markets. This approach can help mitigate regional risks and capitalize on global economic developments.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization is diversified, with a focus on mega (42%) and big (31%) companies. This distribution aligns with benchmark indices and provides stability through exposure to established companies. However, the smaller allocation to medium (19%), small (6%), and micro (2%) caps may limit growth potential. To optimize diversification, consider increasing exposure to smaller market caps, which can offer higher growth opportunities but also come with increased risk. Balancing market capitalization exposure can enhance the portfolio's overall 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.

The portfolio is well-positioned on the Efficient Frontier, indicating an optimal risk-return balance given its current assets. The Efficient Frontier represents the best possible risk-return ratio for a given set of investments, maximizing returns for a given level of risk. While the portfolio is currently optimized, regular reviews can ensure it remains aligned with your risk tolerance and investment objectives. If market conditions or personal circumstances change, consider adjusting allocations to maintain efficiency and achieve desired outcomes.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.00%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.54%

The portfolio has a total dividend yield of 1.54%, with the Vanguard Total Stock Market Index Fund ETF yielding 1.00% and the Vanguard Total International Stock Index Fund ETF yielding 2.80%. Dividends provide a steady income stream and can contribute to total returns, especially in volatile markets. Compared to typical benchmarks, the portfolio's yield is modest, reflecting its growth-oriented focus. To enhance income, consider increasing exposure to high-dividend stocks or dividend-focused ETFs, balancing growth and income objectives.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, reflecting efficient cost management. Low costs support better long-term performance by minimizing the impact of fees on returns. Compared to industry averages, this TER is highly competitive, indicating a cost-effective investment strategy. To maintain this advantage, continue monitoring expense ratios and consider replacing higher-cost investments with more affordable alternatives if necessary. Keeping costs low is a crucial factor in maximizing net returns and achieving long-term financial goals.

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