A balanced and broadly diversified portfolio with a strong focus on global equities
Report created on Jun 13, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 65.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 35.00%
This portfolio's structure is straightforward, consisting of two main ETFs: one targeting the total U.S. stock market and the other focusing on international stocks. With 65% allocated to U.S. equities and 35% to international equities, the portfolio exhibits a strong bias towards stock investments, reflecting a balanced approach to diversification. The simplicity of this structure allows for broad exposure across various sectors and geographies, aligning with a balanced risk profile.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.38%, with a maximum drawdown of -34.55%. These figures suggest a resilient performance through market cycles, attributed to its diversified nature. The days contributing most to returns highlight the impact of significant market movements on portfolio performance. Comparing these metrics against benchmarks can provide further insight into relative performance.
Projection
Monte Carlo simulations, utilizing historical data to forecast potential portfolio outcomes, indicate a wide range of future scenarios. With the majority of simulations (971 out of 1,000) showing positive returns, there's a high probability of favorable outcomes. However, it's crucial to remember that these projections are speculative and depend on past market behavior, which may not predict future performance accurately.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's asset allocation is heavily weighted towards stocks (99%), with a minimal cash holding (1%). This allocation supports a growth-oriented strategy but carries higher volatility compared to portfolios with significant allocations to bonds or other asset classes. For investors with a balanced risk profile, this composition is appropriate, though it's essential to ensure it aligns with individual risk tolerance and investment horizons.
Sectors
- Technology 24%
- Financials 17%
- Industrials 11%
- Consumer Discretionary 10%
- Health Care 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 4%
- Real Estate 3%
- Utilities 3%
Sector allocation is diverse, with technology (24%) and financial services (17%) leading, followed by industrials, consumer cyclicals, and healthcare. This spread is reflective of the global market composition, offering exposure to various economic sectors. However, the heavy weighting in technology and financial services may introduce sector-specific risks, highlighting the importance of periodic review to maintain a balanced sector exposure.
Regions
- North America 67%
- Europe Developed 14%
- Asia Emerging 6%
- Japan 5%
- Asia Developed 3%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographic allocation emphasizes North America (67%), with significant exposure to developed Europe (14%) and emerging Asia (6%). This distribution ensures exposure to both stable and growth-oriented markets, though the relatively lower allocation to emerging markets might limit exposure to high-growth opportunities. For a balanced portfolio, this geographic spread is generally appropriate, but investors might consider increasing exposure to underrepresented regions for enhanced diversification.
Market capitalization
- Mega-cap 42%
- Large-cap 30%
- Mid-cap 19%
- Small-cap 6%
- Micro-cap 2%
The portfolio's market capitalization breakdown shows a preference for mega (42%) and large-cap (30%) companies, with smaller allocations to medium, small, and micro-cap stocks. This bias towards larger companies may contribute to stability but could also limit potential high-growth opportunities found in smaller-cap investments. Adjusting allocations to include more small and micro-cap stocks could enhance growth potential and diversification.
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 appears well-positioned on the Efficient Frontier, indicating an optimal balance between risk and return based on historical data. While this suggests the portfolio is efficiently constructed, investors should periodically reassess their allocations. Market conditions and personal circumstances change, and staying informed on these changes can help maintain this optimal balance.
Dividends
- Vanguard Total Stock Market Index Fund ETF Shares 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 1.82%
The portfolio's dividend yield stands at 1.82%, with international stocks contributing a higher yield (2.80%) compared to U.S. equities (1.30%). This dividend income can provide a steady cash flow, contributing to the portfolio's total return. For balanced investors, reinvesting dividends or using them as a source of income can be strategic choices depending on individual financial goals and needs.
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%
With a total expense ratio (TER) of 0.04%, the portfolio benefits from low costs, enhancing long-term return potential. Low-cost index funds, such as those chosen here, are efficient ways to gain market exposure without eroding returns through high fees. Investors should continue to prioritize cost efficiency when making any portfolio adjustments.
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