This portfolio has only about 3.8 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Balanced and Broadly Diversified Portfolio with Strong Historical Performance and Low Costs

Report created on Jul 29, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of three primary ETFs: Vanguard S&P 500 ETF (50%), Invesco NASDAQ 100 ETF (30%), and Vanguard Total International Stock Index Fund ETF Shares (20%). This structure provides broad exposure to both domestic and international markets. The high allocation to the S&P 500 and NASDAQ 100 indicates a strong focus on large-cap U.S. stocks, while the international ETF adds global diversification. This combination aligns well with a balanced risk profile, offering a mix of growth potential and stability.

Growth Info

Historically, the portfolio has performed impressively with a Compound Annual Growth Rate (CAGR) of 12.55%. However, it experienced a maximum drawdown of -28.12%, indicating some vulnerability during market downturns. The fact that 90% of the returns are concentrated in just 15 days highlights the importance of staying invested to capture those key performance periods. This historical performance suggests strong growth potential, though it comes with periods of significant volatility.

Projection Info

Using a Monte Carlo simulation with 1,000 scenarios, the portfolio's future performance was projected. This simulation, which assesses potential outcomes by running numerous random trials, shows a 5th percentile return of 68.91% and a median (50th percentile) return of 378.18%. The 67th percentile return is 536.98%. With 991 out of 1,000 simulations showing positive returns, the portfolio demonstrates a high likelihood of future gains, though actual performance will vary based on market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99.33% in equities. This high equity exposure is suitable for investors seeking growth, but it also increases the portfolio's sensitivity to market fluctuations. The minimal allocations to cash and other assets provide little cushion during downturns. For a balanced risk profile, incorporating more bonds or other fixed-income assets could help mitigate volatility and provide more stability.

Sectors Info

  • Technology
    33%
  • Consumer Discretionary
    11%
  • Financials
    10%
  • Telecommunications
    10%
  • Health Care
    10%
  • Industrials
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is diverse, with significant investments in Technology (32.81%), Consumer Cyclicals (11.44%), and Financial Services (10.47%). This diversity helps spread risk across different economic sectors. However, the heavy weighting in Technology could lead to higher volatility, given the sector's historical performance swings. To balance this, consider reducing exposure to more volatile sectors and increasing allocation to traditionally stable sectors like Consumer Defensive and Utilities.

Regions Info

  • North America
    80%
  • Europe Developed
    9%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Latin America
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is concentrated in North America (80.41%), with additional exposure to Europe Developed (8.65%), Japan (3.31%), and other regions. This strong focus on North America reflects the dominance of U.S. markets in the portfolio. While international diversification is present, increasing exposure to emerging markets and other developed regions could enhance diversification and reduce reliance on any single market's performance.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.48%

The portfolio's dividend yield is not specified, but given the ETFs included, it likely provides a moderate level of income. Dividends can offer a steady income stream and contribute to total returns, especially during periods of market volatility. To enhance income, consider incorporating higher-yielding assets or dividend-focused ETFs. This can provide a buffer against market downturns and add stability to the portfolio.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The total expense ratio (TER) of the portfolio is 0.08%, which is very low. This low-cost structure is beneficial as it minimizes the drag on returns, allowing more of the investment gains to be retained. Keeping costs low is a crucial aspect of long-term investing success. Continue to monitor expense ratios and consider low-cost alternatives if any of the current holdings increase their fees. This approach ensures that investment costs remain minimal.

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