A balanced and broadly diversified portfolio with a focus on US equities and moderate risk

Report created on Mar 19, 2025

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 structured with a significant emphasis on equities, comprising 75% of the allocation, while bonds make up 10%. The remaining 15% is divided between commodities and cash. This composition aligns well with a balanced strategy, offering growth potential through equities and stability via bonds. Compared to typical balanced benchmarks, this portfolio leans slightly more towards equities, which can offer higher returns but also increased volatility. To ensure it meets your goals, consider whether this equity-heavy approach aligns with your risk tolerance and investment timeline.

Growth Info

Historically, the portfolio has shown strong performance with a Compound Annual Growth Rate (CAGR) of 12.63%. This figure indicates robust growth over time, outperforming many traditional balanced portfolios. However, the maximum drawdown of -28.76% highlights potential volatility during market downturns. Comparing this to a benchmark can provide context; while the returns are impressive, the associated risk is also higher. It's crucial to weigh these factors when considering potential adjustments, ensuring the portfolio aligns with personal risk tolerance and financial goals.

Projection Info

Forward projections using Monte Carlo simulations, which assess potential future outcomes based on historical data, suggest a wide range of possibilities. The median outcome projects a portfolio increase of 336.4%, with a high probability of positive returns, as 974 out of 1,000 simulations ended positively. While these projections are encouraging, it's important to remember that they rely on historical data, which doesn't guarantee future performance. Regularly revisiting these projections can help adjust strategies in response to changing market conditions and personal circumstances.

Asset classes Info

  • Stocks
    75%
  • Bonds
    10%
  • Other
    9%
  • Cash
    6%

The allocation across asset classes is predominantly in stocks, with a smaller portion in bonds and other investments. This structure supports growth but may expose the portfolio to equity market volatility. Compared to balanced benchmarks, which typically have a more even distribution between stocks and bonds, this portfolio is more aggressive. To enhance diversification and potentially reduce risk, consider increasing bond allocation or introducing other asset classes that might offer stability during market fluctuations.

Sectors Info

  • Financials
    23%
  • Technology
    13%
  • Industrials
    8%
  • Consumer Discretionary
    7%
  • Health Care
    6%
  • Telecommunications
    4%
  • Energy
    4%
  • Consumer Staples
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sectoral allocation shows a concentration in financial services and technology, comprising 36% of the portfolio. While these sectors can drive growth, they also introduce sector-specific risks. For instance, tech-heavy allocations may face volatility with interest rate changes. Compared to benchmarks, this concentration is notable. Diversifying further into sectors like healthcare or consumer goods could mitigate risk and enhance stability. Regularly reviewing sector trends and adjusting allocations accordingly can help maintain a balanced risk-return profile.

Regions Info

  • North America
    50%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Asia
    2%
  • Latin America
    2%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America with 50% exposure, followed by Europe at 15%. This aligns with many US-based portfolios but may limit international diversification. Emerging markets, which are less represented, can offer growth opportunities and risk diversification. Compared to global benchmarks, increasing exposure to regions like Asia or Latin America could enhance diversification and potentially improve returns. Regularly assessing geographic allocations can ensure the portfolio remains well-balanced and aligned with global economic trends.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    17%
  • Mid-cap
    9%
  • Small-cap
    7%
  • Micro-cap
    6%

The portfolio's market capitalization is skewed towards mega and big-cap stocks, which make up 53% of the allocation. This focus on larger companies typically offers stability and lower volatility compared to smaller-cap stocks. However, small and micro-cap stocks, though riskier, can provide higher growth potential. Balancing these allocations can optimize risk and return, ensuring the portfolio benefits from both stability and growth opportunities. Consider adjusting market cap exposure to align with your risk tolerance and investment objectives.

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 can be optimized using the Efficient Frontier, which helps identify the best possible risk-return ratio based on current assets. This concept involves adjusting allocations to achieve maximum returns for a given level of risk. While the portfolio is well-diversified, exploring minor adjustments in asset weights could enhance efficiency. It's important to note that optimization is based solely on existing assets, and doesn't necessarily imply diversification improvements. Regularly assessing the portfolio's position on the Efficient Frontier can ensure alignment with financial goals.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Xtrackers MSCI Europe Hedged Equity ETF 0.10%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 4.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 1.28%

The portfolio's dividend yield stands at 1.28%, with contributions from various ETFs, notably the Schwab Fundamental Emerging Markets Large Company Index ETF at 4.40%. Dividends provide a steady income stream, useful for reinvestment or income generation. For investors seeking regular income, focusing on higher-yielding assets could be beneficial. However, it's essential to balance yield with growth potential, as high dividends might indicate mature companies with limited growth prospects. Regularly reviewing dividend yields ensures alignment with income goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • abrdn Bloomberg All Commodity Strategy K-1 Free ETF 0.26%
  • Xtrackers MSCI Europe Hedged Equity ETF 0.46%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 0.39%
  • SPDR Gold MiniShares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.18%

The portfolio's total expense ratio (TER) is 0.18%, which is impressively low and supports better long-term performance by minimizing costs. This low-cost structure is a strong advantage, as high fees can erode returns over time. Compared to average industry costs, this portfolio is well-positioned to maximize net returns. While current costs are favorable, it's important to monitor any fee changes or new investment opportunities that could impact overall expenses. Maintaining a focus on cost efficiency will support long-term investment success.

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