A balanced portfolio with a focus on U.S. equities and broad global diversification

Report created on Feb 1, 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 primarily of three ETFs: Vanguard Total Stock Market Index Fund (50%), Schwab U.S. Large-Cap Growth ETF (25%), and Vanguard Total International Stock Index Fund (25%). The portfolio leans heavily towards U.S. equities, with a significant portion in large-cap stocks. This structure aligns with a balanced investment strategy, offering exposure to both domestic and international markets. While this composition provides a solid foundation, it's important to consider the potential impact of market fluctuations on U.S.-centric investments. Diversifying further into other asset classes like bonds or real estate might enhance stability and reduce volatility.

Growth Info

Historically, this portfolio has delivered strong performance, with a Compound Annual Growth Rate (CAGR) of 12.97%. This impressive growth rate indicates the portfolio's ability to generate significant returns over time. However, it also experienced a maximum drawdown of -33.93%, highlighting the potential for substantial losses during market downturns. Comparing this performance to a relevant benchmark can provide context for its historical success. While past performance is not indicative of future results, maintaining a diversified approach can help mitigate risks and sustain growth.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance was projected across 1,000 scenarios. The median outcome suggests a 367.8% increase, while the 5th percentile indicates a more conservative 50.8% growth. These projections offer a range of potential outcomes based on historical data, though they are not guarantees. Understanding the variability of these projections can help set realistic expectations for future returns. To better prepare for uncertainties, consider stress-testing the portfolio under different market conditions and adjusting allocations as needed.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is predominantly invested in stocks, with a 99% allocation, and a minimal 1% in cash. This heavy equity exposure can drive substantial growth but also introduces higher volatility. A more balanced allocation across asset classes, such as bonds or commodities, could provide additional diversification benefits and reduce risk. Comparing the current allocation to a benchmark can help identify potential gaps in diversification. Exploring alternative asset classes may enhance the portfolio's resilience against market fluctuations.

Sectors Info

  • Technology
    32%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation within the portfolio is diverse, with a notable concentration in technology (32%), followed by financial services (14%) and consumer cyclicals (12%). This tech-heavy focus aligns with recent market trends but may expose the portfolio to volatility during periods of interest rate hikes or regulatory changes. A well-balanced sector allocation can help mitigate sector-specific risks and improve overall stability. Regularly reviewing sector weights and adjusting them in response to economic shifts can enhance the portfolio's adaptability.

Regions Info

  • North America
    77%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America (77%), with limited exposure to Europe (10%) and Asia (8%). This concentration in U.S. markets may limit diversification benefits and increase vulnerability to domestic economic changes. Expanding geographic exposure to include more emerging markets or other developed regions could improve diversification and reduce reliance on a single market. Comparing geographic allocation to global benchmarks can help identify opportunities for broader diversification.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization distribution is skewed towards mega-cap stocks (48%), with significant holdings in big (28%) and medium (17%) caps. This large-cap focus provides stability and growth potential but may limit exposure to smaller, potentially higher-growth companies. Balancing market capitalization exposure can enhance diversification and capture opportunities across different segments. Consider adjusting the allocation to include more small and mid-cap stocks for a more comprehensive market representation.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The portfolio includes highly correlated assets, particularly between the Vanguard Total Stock Market Index Fund and the Schwab U.S. Large-Cap Growth ETF. This correlation may limit diversification benefits, as these assets tend to move together during market shifts. Reducing overlap by diversifying into less correlated assets can enhance risk management and improve overall portfolio resilience. Exploring alternative investments that offer low correlation with existing holdings could provide additional stability.

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 is a candidate for optimization using the Efficient Frontier, which seeks the best possible risk-return ratio with the current assets. While the existing allocation is balanced, there may be opportunities to improve efficiency by adjusting weights. This optimization focuses on maximizing returns for a given level of risk, without necessarily increasing diversification. Periodically reviewing and rebalancing the portfolio to align with the Efficient Frontier can enhance performance and ensure alignment with investment goals.

Dividends Info

  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.50%

The portfolio's dividend yield stands at 1.50%, with contributions from all three ETFs. Dividends provide a steady income stream and can enhance total returns, especially during volatile market periods. However, the focus on growth-oriented ETFs suggests a preference for capital appreciation over income generation. Balancing growth and income strategies by incorporating higher-yielding assets could improve cash flow and support long-term financial goals. Regularly reviewing dividend policies and adjusting allocations can help optimize income potential.

Ongoing product costs Info

  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, reflecting the cost efficiency of the selected ETFs. Keeping costs minimal is crucial for maximizing long-term returns, as high fees can erode gains over time. This low-cost structure aligns well with best practices in portfolio management. Continually monitoring fees and seeking cost-effective investment options can further enhance performance. Ensuring that any future changes to the portfolio maintain this cost advantage will support sustained growth.

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