A balanced and broadly diversified portfolio with a strong focus on global equities

Report created on Aug 7, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed of two ETFs, with a 70% allocation in a Total Stock Market Index Fund and a 30% allocation in a Total International Stock Market Index Fund. This structure provides a broad diversification across both domestic and international equities. The high allocation to stocks indicates a growth-oriented strategy, albeit with a balanced approach given the mix of U.S. and non-U.S. assets. The simplicity of this portfolio, focusing on just two ETFs, makes it easy to manage while still capturing a wide array of global equities.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.12%, with a maximum drawdown of -34.60%. These figures suggest a robust performance, with the potential for significant volatility. The days contributing to 90% of returns being concentrated in 27.0 days highlights the portfolio's susceptibility to short-term market movements. Comparing this performance to benchmark indexes would provide further context, but on the surface, these figures suggest a strong growth orientation.

Projection Info

Using Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of outcomes. The median projection suggests a 290.6% return, indicating strong potential growth. However, the presence of simulations with both high and low returns underscores the inherent uncertainty in any market forecast. It's important to remember that such projections are speculative and depend heavily on past market behavior.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily weighted towards stocks (99%), with a minimal cash holding (1%). This allocation underscores a growth-focused strategy, leveraging the potential higher returns of equities. However, it also implies higher volatility and risk compared to portfolios with a more significant allocation to bonds or other asset classes. The lack of diversification into non-equity assets may not suit all risk tolerances.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is well-diversified across technology, financial services, industrials, consumer cyclicals, and healthcare, among others. This diversification helps mitigate sector-specific risks. However, the heavy weighting towards technology (26%) may expose the portfolio to higher volatility, given the sector's rapid growth and occasional sharp corrections. Balancing sector exposures can help smooth out returns over time.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic distribution shows a strong bias towards North America (72%), with significant exposure to developed Europe (12%) and emerging Asia (5%). This distribution suggests a balanced approach to global diversification, capturing growth in both developed and emerging markets. However, investors might consider increasing exposure to underrepresented regions for even broader diversification.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The market capitalization breakdown, with a focus on mega (42%) and big (31%) cap stocks, indicates a preference for large, established companies. This bias towards larger companies may provide stability but could also limit growth potential compared to portfolios with a higher allocation to small or micro-cap stocks. Adjusting this allocation could offer a more balanced risk-return 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 the two ETFs appears well-considered, aiming to balance risk and return efficiently. However, employing the Efficient Frontier concept could further optimize this balance. This method could suggest slight adjustments in allocation to achieve the most desirable risk-return profile based on historical data. Remember, the Efficient Frontier is based on past performance, which is not a reliable indicator of future results.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.68%

The dividend yields from the two ETFs contribute to the portfolio's total yield of 1.68%. This yield offers an additional income stream, which can be particularly valuable in down markets or for investors seeking regular income. Balancing growth and income generation is crucial for long-term investment success, especially in varying market conditions.

Ongoing product costs Info

  • 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%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Keeping costs low is a fundamental principle of successful long-term investing, as high fees can significantly erode investment gains over time. This portfolio exemplifies cost-efficient investing without compromising on diversification.

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