A balanced global investment strategy with a strong focus on diversified ETFs

Report created on Jun 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is structured around two core ETFs, with an 80% allocation to global stocks via the Vanguard Total World Stock Index Fund ETF Shares and a 20% allocation to bonds through the Vanguard Total Bond Market Index Fund ETF Shares. This composition reflects a balanced approach, leveraging the broad market exposure of stocks for growth potential while using bonds to mitigate volatility and provide income. The high diversification across both asset classes and sectors, as well as a global spread, positions this portfolio as a robust foundation for long-term investing.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 8.79%, with a maximum drawdown of -28.75%. These figures suggest a resilient performance through market cycles, with the drawdown indicating the potential for significant short-term losses in adverse conditions. The days contributing to 90% of returns being so few highlights the unpredictability of market movements and the importance of long-term holding.

Projection Info

Monte Carlo simulations, using historical data to forecast future performance, suggest a wide range of outcomes for this portfolio. With 947 out of 1,000 simulations showing positive returns, the median projected growth is substantial. However, the presence of simulations with negative returns underscores the inherent risks of investing. These projections are valuable for setting realistic expectations but should be taken with caution as they cannot guarantee future performance.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%

The portfolio's allocation is predominantly in stocks (79%), with a significant bond component (20%) and a minimal cash position (1%). This asset class distribution is typical for a balanced investment strategy aiming for growth while managing risk. The stock component is positioned to capture market upswings, whereas bonds offer stability and income, a combination that suits investors with a medium risk tolerance.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Industrials
    9%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is diversified, with technology (19%) and financial services (14%) being the most prominent. This sector spread is reflective of the global market composition, with a slight emphasis on growth-oriented sectors. Such a distribution can enhance returns during economic expansions but may also introduce volatility, underscoring the importance of staying informed about sector-specific trends and risks.

Regions Info

  • North America
    51%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation underscores a significant weighting towards North America (51%), with diversified but lesser exposures across other developed and emerging markets. This North American focus aligns with the region's dominant role in global markets but may limit exposure to potential growth in emerging markets. Expanding geographic diversity could offer enhanced growth opportunities and risk mitigation.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization exposure leans heavily towards mega (34%) and big (25%) cap stocks, with less emphasis on medium, small, and micro caps. This bias towards larger companies can provide stability and lower volatility but may also limit potential for outsized gains that smaller companies might offer. Consideration of a slightly broader cap range could introduce more growth potential while maintaining an overall balanced risk 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 current allocation between stocks and bonds positions this portfolio near the Efficient Frontier, suggesting an optimized risk-return ratio based on historical data. However, continuous review and adjustment in response to changing market conditions and personal financial goals are essential to maintaining this optimization. Diversification across asset classes, sectors, and geographies plays a critical role in this process.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 2.20%

The dividend yield of the portfolio, at an aggregate of 2.20%, contributes to total returns, particularly from the bond component with a 3.80% yield. While not the primary focus of a growth-oriented strategy, these dividends provide a steady income stream and can be reinvested for compound growth, enhancing long-term returns.

Ongoing product costs Info

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

With a total expense ratio (TER) of 0.06%, this portfolio is cost-efficient, allowing more of the investment returns to compound over time. Low costs are crucial for long-term investment success, as they directly enhance net returns. The chosen ETFs are commendable for their low costs, aligning with best practices for long-term investing.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey