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

Report created on Jul 29, 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 heavily weighted towards equity ETFs, with a 50% allocation in the Vanguard Total Stock Market Index Fund ETF Shares, 30% in the Vanguard Total International Stock Index Fund ETF Shares, and 20% in the SPDR S&P 500 ETF Trust. This composition underlines a strong focus on diversification across both U.S. and international stocks. The diversification score of 4 out of 5 indicates a broad exposure across various sectors and geographies, aligning with the portfolio's balanced risk profile. However, the heavy emphasis on stocks increases exposure to market volatility, which is somewhat mitigated by the broad geographic and sectoral spread.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.32% and a maximum drawdown of -34.33%, the portfolio has demonstrated resilience and the capacity for strong returns over time. The days contributing to 90% of returns being concentrated in just 28.0 days highlight the portfolio's reliance on significant market movements for performance gains. This historical performance suggests an effective balance between risk and return, though the max drawdown indicates potential vulnerability during market downturns. Comparing these metrics with benchmarks could provide further insight into relative performance.

Projection Info

Monte Carlo simulations, projecting 1,000 different potential future scenarios, suggest a wide range of outcomes with a 50th percentile ending portfolio value increase of 350.5%. This indicates significant growth potential, with 985 out of 1,000 simulations showing positive returns. However, the reliance on historical data means these projections cannot guarantee future performance. They do, however, offer a useful tool for understanding potential volatility and the range of possible outcomes, underscoring the need for ongoing risk management.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash reserve (1%). This allocation is suitable for investors with a balanced to moderately aggressive risk tolerance, aiming for higher long-term returns at the expense of short-term volatility. While the stock-heavy focus enhances growth potential, the limited presence of other asset classes, such as bonds or alternative investments, means less cushion against stock market downturns. Diversifying across more asset classes could reduce volatility without significantly compromising growth potential.

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%

The sector allocation is well-spread, with technology (26%) and financial services (17%) being the most prominent. This sectoral distribution reflects a growth-oriented strategy but also exposes the portfolio to sector-specific risks, such as regulatory changes or economic downturns affecting these industries. Given the rapid pace of change in technology and the cyclical nature of financial services, investors should monitor these allocations for potential overexposure risks.

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 allocation shows a heavy emphasis on North America (72%), with meaningful exposure to developed Europe (12%) and emerging Asian markets (5%). This distribution supports diversification across different economic cycles and growth potentials, though the portfolio may be underexposed to high-growth emerging markets. Expanding into underrepresented regions could offer additional growth opportunities and further diversification benefits.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization exposure leans heavily towards mega (43%) and big (31%) cap stocks, indicating a preference for established, large-scale companies. This bias towards larger companies typically offers stability and resilience but may limit exposure to the higher growth potential of medium, small, and micro-cap stocks. Incorporating a broader range of market caps could enhance growth prospects and diversification.

Redundant positions Info

  • SPDR S&P 500 ETF Trust
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the SPDR S&P 500 ETF Trust and the Vanguard Total Stock Market Index Fund ETF Shares suggests redundancy, as both track large segments of the U.S. stock market. This overlap does not contribute to diversification and may unnecessarily concentrate risk. Reducing exposure to one of these highly correlated ETFs could free up portfolio space for assets that offer genuine diversification benefits.

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's current allocation shows a strong foundation but could benefit from optimization to reduce redundancy and improve diversification. The Efficient Frontier analysis suggests that adjusting the allocation could achieve a more optimal risk-return ratio. Focusing on diversifying across more asset classes and reducing exposure to highly correlated assets would enhance the portfolio's efficiency, potentially offering higher returns for the same level of risk.

Dividends Info

  • SPDR S&P 500 ETF Trust 0.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.60%

The portfolio's dividend yield strategy, with a total yield of 1.60%, contributes to its overall return. The Vanguard Total International Stock Index Fund ETF Shares, offering the highest yield at 2.80%, enhances income generation, particularly valuable in market downturns or for investors seeking income. Regularly reviewing and possibly rebalancing towards high-yielding assets could optimize income while maintaining a balanced risk profile.

Ongoing product costs Info

  • SPDR S&P 500 ETF Trust 0.10%
  • 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) 0.05%

With a Total Expense Ratio (TER) of 0.05%, the portfolio's costs are impressively low, supporting better long-term performance by minimizing the drag on returns. This efficient cost structure is crucial for maximizing the compounding effect of returns over time. Keeping costs low remains a best practice for all investors, especially those with a long-term horizon.

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