A balanced portfolio with strong U.S. focus and moderate international diversification

Report created on Nov 11, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio primarily consists of ETFs, with a significant 50% allocation to the Vanguard Total Stock Market Index Fund. The remaining assets are divided among Avantis U.S. Small Cap Value ETF (20%), BNY Mellon International Equity ETF (20%), and Schwab U.S. Dividend Equity ETF (10%). This composition suggests a strong preference for equities, with minimal cash and other investments. The high allocation to U.S. markets indicates a focus on domestic growth, while the inclusion of international equities provides some diversification. To maintain a balanced approach, consider periodically reviewing asset weightings to ensure alignment with your financial goals and risk tolerance.

Growth Info

Over the past few years, this portfolio has demonstrated impressive historic performance with a compound annual growth rate (CAGR) of 18.7%. This suggests that the portfolio has been successful in capturing market growth. However, it also experienced a maximum drawdown of -22.95%, indicating potential volatility. It's crucial to remember that past performance doesn't guarantee future results, and market conditions can change. To mitigate risk, consider maintaining a diversified approach and regularly rebalancing the portfolio to align with your risk tolerance and investment objectives.

Projection Info

Monte Carlo simulations provide valuable insights into potential future outcomes by using historical data to model a range of possibilities. For this portfolio, 1,000 simulations were conducted, with results showing a 5th percentile return of 205.03% and a 50th percentile return of 1,017.56%. While these projections offer a glimpse into potential future performance, they are based on historical data and assumptions that may not hold true. To optimize outcomes, regularly review the portfolio's performance and adjust holdings as needed to align with your risk tolerance and financial goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards equities, with 99.69% in stocks. This high allocation to a single asset class suggests a focus on capital appreciation, but it may also increase risk due to lack of diversification. While equities can offer strong growth potential, they are also subject to market volatility. To enhance diversification and manage risk, consider incorporating other asset classes, such as bonds or real estate, which can provide stability and income during market downturns.

Sectors Info

  • Technology
    20%
  • Financials
    19%
  • Industrials
    13%
  • Consumer Discretionary
    11%
  • Health Care
    10%
  • Energy
    7%
  • Consumer Staples
    7%
  • Telecommunications
    6%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is diverse, with significant weightings in Technology (19.66%), Financial Services (18.98%), and Industrials (12.71%). These sectors have historically driven growth, but they can also be cyclical. A balanced approach across sectors can help mitigate risk and capture opportunities in various market conditions. Regularly review sector weightings to ensure alignment with your investment goals and risk tolerance. Diversifying across sectors can also help reduce the impact of sector-specific downturns on your overall portfolio performance.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily concentrated in North America, with 81.76% exposure. This focus on the U.S. market can capture domestic growth but may limit exposure to international opportunities. The remaining allocation is spread across Europe Developed (11.06%), Japan (4.44%), and other regions. To enhance geographic diversification and reduce potential risks from regional downturns, consider increasing exposure to emerging markets or other underrepresented regions. This approach can help capture global growth and mitigate risks associated with single-region concentration.

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.

Optimization using the Efficient Frontier involves adjusting asset allocations to achieve the best possible risk-return ratio. For this portfolio, potential improvements could be made by rebalancing existing assets to align more closely with the Efficient Frontier. This process focuses on maximizing returns for a given level of risk, without introducing new assets. Regularly review and adjust allocations to ensure the portfolio remains efficient and aligned with your investment goals. Remember, optimization is an ongoing process that requires monitoring and adjustments over time.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • BNY Mellon International Equity ETF 2.90%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.92%

With a total dividend yield of 1.92%, this portfolio offers moderate income potential. The Schwab U.S. Dividend Equity ETF contributes the highest yield at 3.7%, providing a steady income stream. Dividends can enhance total returns, especially in volatile markets. To maximize income, consider reinvesting dividends to benefit from compounding growth. Regularly review dividend yields and payout ratios to ensure they align with your income goals and risk tolerance. Balancing growth and income can help achieve a well-rounded investment strategy.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • BNY Mellon International Equity ETF 0.04%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is 0.08%, indicating low costs relative to potential returns. Lower costs can significantly enhance long-term performance by preserving more of your investment gains. However, it's important to regularly review and compare expenses to ensure they remain competitive. Consider exploring lower-cost alternatives if available, without compromising on diversification or risk management. Keeping costs in check is a crucial aspect of optimizing portfolio performance and achieving your financial objectives.

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