A balanced and highly diversified investment portfolio with a focus on global equities and bonds

Report created on Aug 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is structured with a strong emphasis on diversification, allocating 81% to stocks and 18% to bonds, which is a typical balanced approach for moderate risk tolerance investors. The stock component is further diversified geographically, with significant allocations to both U.S. and international markets, including emerging markets. The bond allocation, primarily in investment-grade corporate bonds, provides a steady income stream and acts as a counterbalance to the equity market's volatility. This composition aligns well with a balanced risk profile, aiming to achieve a mix of growth and income.

Growth Info

The portfolio has exhibited a Compound Annual Growth Rate (CAGR) of 9.68%, with a maximum drawdown of -30.61%. These figures suggest that while the portfolio has the potential for strong growth, it also faces significant volatility, as indicated by the drawdown. The days contributing to 90% of returns being concentrated in 26.0 days highlights the importance of remaining invested during the market's best days to capture the full benefits of equity investment. Comparing this performance to a relevant benchmark would provide further context on its risk-adjusted returns.

Projection Info

Using Monte Carlo simulation, which projects future performance based on historical data, the portfolio shows a wide range of outcomes. The 50th percentile outcome suggests a potential 169.4% return, while the 5th percentile indicates a slight decline. This projection, with 944 out of 1,000 simulations showing positive returns, underscores the importance of long-term investment and the inherent uncertainties in predicting market movements. However, it's crucial to remember that past performance and simulated outcomes do not guarantee future results.

Asset classes Info

  • Stocks
    81%
  • Bonds
    18%
  • Cash
    1%

The allocation across asset classes with 81% in stocks and 18% in bonds is typical for a balanced portfolio aiming for growth with a cushion against market downturns. This allocation provides a good mix of growth potential through equities and income stability through bonds. The minimal cash holding suggests an aggressive investment stance, fully utilizing available capital for investment rather than holding it in low-yield cash reserves.

Sectors Info

  • Technology
    19%
  • Financials
    15%
  • Industrials
    9%
  • Consumer Discretionary
    9%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sectoral allocation shows a well-rounded exposure with a notable emphasis on Technology and Financial Services, which are sectors that can offer significant growth opportunities. However, this concentration also exposes the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting these industries. Diversifying across a wider range of sectors could help mitigate these risks while still capturing growth opportunities.

Regions Info

  • North America
    47%
  • Europe Developed
    11%
  • Asia Emerging
    10%
  • Asia Developed
    5%
  • Japan
    4%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio is well-diversified, with a substantial allocation to North America but also significant investments in developed and emerging markets in Europe and Asia. This global exposure helps in spreading geopolitical and currency risks. However, the heavy weighting towards North America suggests a home bias, which, while common, may limit exposure to potential growth in other regions. Considering a slight rebalance to increase exposure to underrepresented regions could enhance diversification benefits.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The market capitalization exposure, with a focus on mega and big-cap stocks, suggests a preference for stability and lower volatility associated with larger, established companies. However, the relatively smaller allocation to small and micro-cap stocks limits potential high-growth opportunities these segments can offer. Introducing a modest increase in small and micro-cap exposure could enhance growth prospects, albeit with increased risk.

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.

Considering the Efficient Frontier, this portfolio appears to be positioned for an optimal risk-return balance based on its current asset allocation. However, ongoing review and minor adjustments could further enhance this balance. For instance, slightly adjusting the equity-to-bond ratio or diversifying within underrepresented sectors and geographies could provide better risk-adjusted returns without significantly altering the portfolio's overall risk profile.

Dividends Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 4.40%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.35%

The dividend yields from the different components contribute to the portfolio's overall yield of 2.35%. This income plays a crucial role in total return, especially in volatile or bear markets. The bond ETF's higher yield provides a steady income stream, complementing the growth potential from equities. For investors prioritizing income, further optimizing the balance between high-yield bonds and equities could be beneficial.

Ongoing product costs Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 0.14%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

The portfolio's overall cost, reflected in a Total Expense Ratio (TER) of 0.06%, is impressively low, enhancing long-term return potential by minimizing the drag on performance due to fees. This cost efficiency is a strong aspect of the portfolio, as lower costs directly translate to better net returns for the investor. Maintaining this focus on cost efficiency while exploring opportunities for diversification and growth remains a balanced approach.

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