A balanced portfolio with strong diversification and moderate risk exposure

Report created on Mar 22, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is composed of a mix of ETFs and funds, with a significant 70% allocation to the Vanguard Total Stock Market Index Fund ETF. This heavy weighting in a single fund indicates a strong focus on the U.S. stock market. The remaining allocation is spread across international stocks and sector-specific funds, providing a broad exposure. This composition aligns well with global diversification standards, offering a balanced approach to capturing market growth while managing risk. To optimize further, consider reviewing the weightings to ensure they align with personal investment goals and market outlooks.

Growth Info

Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 11.53%. This indicates a robust return over time, outperforming many benchmarks. However, it also experienced a maximum drawdown of -33.64%, highlighting potential volatility during market downturns. While past performance is not indicative of future results, it demonstrates the portfolio's ability to recover and grow. To mitigate future risks, consider strategies to manage drawdowns, such as increasing diversification or adjusting asset allocations during market volatility.

Projection Info

Forward projections using a Monte Carlo simulation, which estimates potential outcomes based on historical data, suggest a wide range of possible returns. The median projection shows a potential 249.7% gain, while the 5th percentile indicates a risk of -15.8%. With 928 out of 1,000 simulations showing positive returns, the outlook is generally optimistic. However, it's important to remember that these projections are not guarantees. Regularly reviewing and adjusting the portfolio based on changing market conditions and personal goals can help navigate uncertainties and optimize future performance.

Asset classes Info

  • Stocks
    94%
  • No data
    5%
  • Cash
    1%

The portfolio's asset allocation is heavily weighted towards stocks, comprising 94% of the total. This high equity exposure can drive growth but also increases risk, particularly during market downturns. The remaining allocation is in cash and unknown asset classes, providing limited diversification. To enhance stability, consider incorporating other asset classes, such as bonds, which can offer a buffer against stock market volatility. Balancing asset classes can help achieve a more stable risk-return profile, aligning with the portfolio's balanced risk classification.

Sectors Info

  • Technology
    29%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • No data
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The sector allocation reveals a significant concentration in technology, making up 29% of the portfolio. While this can capitalize on tech growth, it also increases exposure to sector-specific risks, such as regulatory changes or market shifts. Other sectors like financial services and consumer cyclicals are well-represented, providing some balance. To mitigate sector risk, consider diversifying further across underrepresented sectors, ensuring alignment with broader market trends and reducing potential volatility from sector-specific downturns.

Regions Info

  • North America
    75%
  • Europe Developed
    9%
  • No data
    5%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily concentrated in North America, accounting for 75% of the allocation. This focus on the U.S. market can benefit from domestic growth but may limit exposure to opportunities in other regions. Europe and Asia have modest representation, offering some geographical diversification. To enhance global exposure, consider increasing allocations to emerging markets, which can provide growth potential and reduce reliance on U.S. market performance. This approach can help balance regional risks and capture diverse economic cycles.

Market capitalization Info

  • Mega-cap
    40%
  • Large-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    6%
  • No data
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution shows a strong preference for large-cap stocks, with 69% allocated to mega and big caps. These companies are generally more stable and less volatile, offering steady growth. However, the allocation to small and micro-cap stocks is limited, potentially missing out on higher growth opportunities. To achieve a more balanced risk-return profile, consider increasing exposure to smaller-cap stocks, which can provide diversification and the potential for higher returns, albeit with increased volatility.

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 appears to be well-positioned on the Efficient Frontier, indicating an optimal risk-return balance given the current asset allocation. This means that based on the existing holdings, the portfolio is maximizing returns for its level of risk. However, optimization is an ongoing process. Regularly review the portfolio to ensure it remains aligned with personal goals and market conditions. Consider adjustments to asset weights or the inclusion of new assets to maintain or enhance efficiency, adapting to changes in market dynamics.

Dividends Info

  • Fidelity® Government Money Market Fund 4.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.70%

The portfolio's dividend yield stands at 1.70%, contributing to overall returns. The Fidelity® Government Money Market Fund offers the highest yield at 4.60%, providing a steady income stream. Dividend income can be particularly valuable for investors seeking regular cash flow or reinvestment opportunities. While the yield is modest, it complements the growth focus of the portfolio. To enhance income potential, consider increasing allocations to high-dividend stocks or funds, balancing growth with income generation.

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) 0.03%

The portfolio's costs are impressively low, with an overall Total Expense Ratio (TER) of 0.03%. Low costs are crucial for long-term investment success, as they allow more of the portfolio's returns to be retained by the investor. This cost efficiency aligns well with best practices for maximizing returns over time. To maintain this advantage, continue monitoring expense ratios and consider cost-effective alternatives when making changes to the portfolio, ensuring that fees remain minimal while achieving investment goals.

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