Globally diversified two fund stock portfolio with efficient risk balance and steadier factor characteristics
Report created on May 10, 2026Risk profile
4/7
Diversification profile
4/5
Positions
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VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 70.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 30.00%
This portfolio is built from just two broad equity index ETFs: roughly 70% international stocks and 30% US stocks. That means every dollar is invested in companies around the world, with no bonds or cash in the mix. Structurally, it’s about as “total market” as you can get with only two funds, which keeps things simple and transparent. A setup like this tends to behave much like the global stock market itself, rising and falling with corporate earnings and sentiment. The clear split between US and non‑US also makes it easy to understand what’s driving returns at any point: domestic markets or the rest of the world.
Growth
From 2016 to 2026, a hypothetical $1,000 in this portfolio grew to about $3,017, a compound annual growth rate (CAGR) of 11.71%. CAGR is like your average speed on a long road trip, smoothing out bumps along the way. The max drawdown was about -34%, similar in depth to the US and global benchmarks during early 2020, and it recovered within five months after bottoming. Compared with the US market alone, returns were lower, but much closer to the global benchmark. This shows that staying more aligned with global diversification meant giving up some US outperformance but still capturing strong long‑term growth.
Projection
The Monte Carlo projection uses past return and volatility patterns to simulate 1,000 possible 15‑year futures for the portfolio. Think of it as rolling the dice many times to see a range of potential outcomes, not a single forecast. The median path turns $1,000 into about $2,755, with a wide “likely” range from roughly $1,767 to $4,201. There are even more extreme possibilities on both sides. Importantly, around 73% of simulations end positive, but some paths finish flat or below the starting value. This highlights that even with historically strong averages, future results can vary a lot and are never guaranteed.
Asset classes
- Stocks 100%
All of this portfolio is in stocks, so there’s no built‑in ballast from bonds or cash. An all‑equity mix usually offers higher long‑term growth potential but also sharper ups and downs over shorter periods. Compared with many “balanced” portfolios that blend stocks and bonds, this one leans fully into growth assets. The diversification here comes from owning many different companies across the globe, not from mixing in safer asset classes. That explains why the portfolio’s drawdowns can be deep during market stress but its long‑run return numbers look strong. The trade‑off is clearer growth potential in exchange for more pronounced volatility.
Sectors
- Technology 21%
- Financials 19%
- Industrials 14%
- Consumer Discretionary 9%
- Health Care 8%
- Telecommunications 6%
- Basic Materials 6%
- Consumer Staples 5%
- Energy 5%
- Utilities 3%
- Real Estate 3%
Sector exposure is spread across the economy, with technology the largest slice at 21%, followed by financials at 19% and industrials at 14%. No single sector dominates the portfolio, which is reassuring for diversification. Tech is meaningful but not overwhelmingly heavy compared with many market‑cap‑weighted global indices today. This balance means performance isn’t overly tied to one theme like tech, healthcare, or energy cycles. For example, if technology temporarily struggles while financials or industrials have stronger periods, the portfolio has other engines that can offset some of that impact, helping smooth sector‑specific booms and busts over time.
Regions
- North America 36%
- Europe Developed 26%
- Japan 11%
- Asia Developed 10%
- Asia Emerging 10%
- Australasia 3%
- Africa/Middle East 3%
- Latin America 2%
- Europe Emerging 1%
Geographically, the portfolio is genuinely global: about 36% in North America, 26% in developed Europe, 11% in Japan, and meaningful slices across developed and emerging Asia plus smaller allocations to other regions. This is much closer to a “world market” split than a US‑dominated portfolio. The result is less reliance on any single economy, currency, or policy regime. When one region slows, another may be growing faster, which can balance returns. Compared with common US‑heavy benchmarks, this global tilt aligns well with worldwide market weights, which is a strong indicator of broad geographic diversification and reduced home‑country concentration risk.
Market capitalization
- Mega-cap 44%
- Large-cap 30%
- Mid-cap 17%
- Small-cap 5%
- Micro-cap 1%
The market‑cap breakdown skews toward the largest companies, with about 44% in mega‑caps and 30% in large‑caps, then stepping down into mid, small, and micro‑caps. That pattern is typical of index funds that weight by company size: the biggest firms dominate the index but smaller ones are still represented. Larger companies tend to be more stable and widely followed, while smaller names can be more volatile but sometimes grow faster. Having exposure across the full spectrum means the portfolio captures the steadier behavior of giants alongside the more dynamic swings of smaller firms, without being overly concentrated in any single size bucket.
True holdings
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23 Taiwan Semiconductor Manufacturing Co. Ltd. 2.42%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
-
NV NVIDIA Corporation 1.92%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AA Apple Inc 1.78%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 1.31%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 0.96%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
SS Samsung Electronics Co Ltd 0.95%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
-
AS ASML Holding N.V. 0.89%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
-
GO Alphabet Inc Class A 0.80%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 0.70%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
07 Tencent Holdings Ltd 0.67%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
- Top 10 total 12.38%
Looking through the top holdings, the biggest underlying exposures include familiar global names like Taiwan Semiconductor, NVIDIA, Apple, Microsoft, Amazon, Samsung, and Tencent. These appear via both the US and international index funds, but overlap is only measured using ETF top‑10 lists, so some duplication is likely understated. Even so, no single company stands out as overwhelmingly dominant at the portfolio level; the largest look‑through position is just over 2%. This suggests that while marquee mega‑caps do influence results, the overall risk isn’t hinging on one or two individual stocks, and the broad index structure spreads exposure widely.
Factors
Factor exposure is broadly market‑like across value, size, momentum, and quality, all hovering around neutral. That means the portfolio isn’t making big bets on cheap vs. expensive stocks, smaller vs. larger companies, or fast‑rising “momentum” names. The two notable tilts are toward yield and low volatility. A higher yield tilt means, on average, holdings pay somewhat more in dividends than the market. A high low‑volatility tilt indicates a slight lean toward stocks that have historically moved less dramatically. Together, these traits can make returns a bit steadier and more income‑oriented than a pure growth or high‑beta equity portfolio.
Risk contribution
-
Vanguard Total International Stock Index Fund ETF Shares
Weight: 70.00% 69.8% -
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 30.00% 30.2%
Risk contribution shows how much each holding drives the portfolio’s overall ups and downs, separate from simple weight. Here, the international ETF at 70% weight contributes about 69.8% of total risk, while the US ETF at 30% weight contributes about 30.2%. Those figures are almost exactly proportional to their allocations, which indicates the two funds have similar volatility and correlation characteristics. In other words, there isn’t a small position secretly dominating risk, nor a large position behaving unusually quietly. This straightforward relationship between size and risk keeps the structure easy to interpret and aligns well with the simple two‑fund design.
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 risk vs. return chart plots this portfolio alongside the efficient frontier built from the same two funds. The current mix has a Sharpe ratio of 0.5, while the maximum‑Sharpe combination sits higher at 0.8 with slightly more risk and return. The minimum‑variance portfolio has similar risk but a somewhat better Sharpe than the current mix. However, the report notes this portfolio is on or very near the efficient frontier, meaning its risk/return profile is already quite efficient given the holdings. Any gains from reweighting would likely be incremental rather than transformational, which fits the simple, balanced structure.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.00%
- Vanguard Total International Stock Index Fund ETF Shares 2.70%
- Weighted yield (per year) 2.19%
The total dividend yield for the portfolio is about 2.19%, coming from roughly 1.00% on the US fund and 2.70% on the international fund. Yield is the cash income paid out each year as a percentage of the current value. For an all‑stock portfolio, this is a moderate income level: not extremely high, but not negligible either. Because the international slice is larger and has the higher yield, most of the portfolio’s cash income is coming from non‑US markets. Over long horizons, reinvested dividends can meaningfully boost total return, even when price swings dominate the day‑to‑day experience.
Ongoing product costs
- 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%
Total ongoing fund costs (TER) average about 0.04%, which is extremely low by industry standards. TER is the annual fee charged by the funds as a percentage of assets, quietly deducted inside the ETFs. At this level, costs are barely a speed bump for long‑term compounding, especially when compared with many actively managed funds charging ten times as much or more. This cost efficiency is a real strength: more of the portfolio’s return stays in the investor’s pocket rather than going to fees. Combined with the broad diversification, the low cost base creates a solid structural foundation for long‑term equity investing.
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