A balanced portfolio with strong US focus and moderate risk but limited diversification

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with moderate risk tolerance seeking growth and income with a focus on US equities. The balanced profile indicates a preference for steady returns while maintaining some exposure to high-growth sectors like technology. Ideal for those with a medium to long-term investment horizon, this portfolio prioritizes capital appreciation while offering some dividend income. However, the investor should be comfortable with potential fluctuations due to limited diversification.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    41.60%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    29.40%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    5.90%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    5.50%
  • NVIDIA Corporation
    NVDA - US67066G1040
    5.30%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    3.60%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    3.50%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF
    SPYI
    1.90%
  • Main Street Capital Corporation
    MAIN - US56035L1044
    0.90%
  • Simon Property Group Inc
    SPG - US8288061091
    0.90%
  • PennantPark Floating Rate Capital Ltd
    PFLT - US70806A1060
    0.80%
  • VICI Properties Inc
    VICI - US9256521090
    0.70%

The portfolio is heavily weighted towards equities, making up over 96% of the total allocation. This includes a significant portion in broad-market ETFs, with a notable emphasis on the Vanguard Total Stock Market Index Fund and Vanguard S&P 500 ETF. While this composition suggests a focus on growth, the limited allocation to bonds and other asset classes may not provide sufficient diversification to mitigate risk during market downturns. For a balanced profile, consider increasing exposure to non-equity asset classes to enhance stability.

Growth Info

Historically, the portfolio has delivered impressive returns with a CAGR of 21.94%, outperforming many benchmarks. However, the max drawdown of -12.89% highlights potential vulnerability during market corrections. This performance suggests a high-growth strategy, but it's essential to remember that past success doesn't guarantee future results. To maintain stability, consider rebalancing periodically to lock in gains and reduce exposure to high-volatility assets.

Projection Info

Forward projections using Monte Carlo simulations indicate a promising outlook, with a 50th percentile end portfolio value of 1,625.0%. This method uses historical data to model potential future outcomes, offering a range of scenarios. While the projections are optimistic, they rely on past trends, which may not continue. To manage expectations, focus on maintaining a diversified strategy that can weather various market conditions, ensuring a more predictable growth path.

Asset classes Info

  • Stocks
    96%
  • Bonds
    4%
  • Cash
    0%
  • Other
    0%
  • No data
    0%

The allocation is predominantly in stocks, with a minimal bond presence at 3.6%. This skew towards equities can drive higher returns but also increases exposure to market volatility. A more balanced allocation might include a greater proportion of bonds or other fixed-income assets to provide a buffer against stock market fluctuations. Consider diversifying into alternative asset classes to enhance risk-adjusted returns and improve overall portfolio resilience.

Sectors Info

  • Technology
    32%
  • Financials
    13%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Real Estate
    4%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%

Sectorally, the portfolio is tech-heavy, with technology making up over 32% of the allocation. This concentration can lead to higher volatility, especially during periods of regulatory scrutiny or tech sector downturns. While sectors like financial services and healthcare provide some balance, consider increasing exposure to underrepresented sectors like utilities or consumer defensives to mitigate sector-specific risks and enhance diversification.

Regions Info

  • North America
    93%
  • Europe Developed
    2%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    0%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is overwhelmingly focused on North America, with over 92% exposure. This concentration limits global diversification and may miss opportunities in emerging markets or other developed regions. While the US market has been strong, diversifying geographically can reduce country-specific risks and capture growth in other economies. Consider reallocating some assets to increase international exposure for a more globally balanced portfolio.

Redundant positions Info

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

The portfolio includes highly correlated assets, particularly between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund. Such overlap reduces diversification benefits, as these assets tend to move in tandem. During market downturns, this correlation can amplify losses. To enhance diversification, evaluate the necessity of overlapping assets and consider replacing them with less correlated alternatives that can provide a more stable performance.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Main Street Capital Corporation 6.80%
  • PennantPark Floating Rate Capital Ltd 10.30%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • Simon Property Group Inc 4.70%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 12.10%
  • VICI Properties Inc 6.00%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 1.87%

The portfolio's overall dividend yield is 1.87%, with contributions from various ETFs and stocks. Notably, the SHP ETF Trust - NEOS S&P 500 High Income ETF offers a high yield of 12.1%, which can enhance income generation. Dividends can provide a steady income stream and reduce reliance on capital appreciation. If income is a priority, consider increasing allocations to high-dividend-paying assets, ensuring they align with your overall risk and growth objectives.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SHP ETF Trust - NEOS S&P 500 High Income ETF 0.68%
  • Vanguard S&P 500 ETF 0.03%
  • 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) 0.05%

The portfolio boasts a low total expense ratio (TER) of 0.05%, which is commendable and supports better long-term performance. Low costs mean more of your investment returns are retained, compounding over time. While the SHP ETF Trust has a higher expense ratio of 0.68%, the overall portfolio costs remain competitive. Regularly review and compare costs to ensure they remain low, and consider replacing high-fee assets with similar lower-cost alternatives.

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.

The current portfolio can be optimized for better risk-return efficiency using the Efficient Frontier concept. This involves adjusting asset allocations to achieve the best possible returns for a given level of risk. However, optimization should focus on reducing overlap and enhancing diversification first. While the optimal portfolio suggests a higher expected return of 59.39%, ensure any changes align with your risk tolerance and investment goals before implementing.

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