A balanced and highly diversified portfolio with a strong focus on North American equities

Report created on Dec 15, 2024

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 predominantly composed of equities, with a significant 41% allocation to the iShares Core S&P 500 ETF. This indicates a strong focus on large-cap U.S. stocks. Additionally, there's a notable 18% in the Vanguard FTSE Developed Markets ETF, providing international exposure. The Vanguard Total Bond Market ETF, at 11%, offers a stabilizing fixed-income component. This composition suggests a strategy aimed at growth through equity investments, while maintaining some risk mitigation via bonds. To ensure the portfolio aligns with your goals, consider whether this mix supports your desired growth and risk levels.

Growth Info

Historically, the portfolio has delivered a commendable compound annual growth rate (CAGR) of 14.55%, with a maximum drawdown of -31.43%. This suggests strong performance during bullish periods, but also indicates vulnerability during market downturns. The concentration of returns in just 30 days highlights the potential volatility. Understanding past performance helps set realistic expectations, but remember that past results don't guarantee future returns. Consider whether the portfolio's historical volatility aligns with your comfort level, and be prepared for market fluctuations.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns. The median scenario shows a 486.8% growth, while the 5th percentile indicates a 74.34% increase. These projections illustrate the uncertainty and variability inherent in investing. While simulations offer insights into potential outcomes, they are not predictions. It's important to prepare for various scenarios, ensuring your investment strategy remains resilient across different market conditions.

Asset classes Info

  • Stocks
    88%
  • Bonds
    11%
  • Cash
    1%

With 88.38% of the portfolio in stocks and 10.88% in bonds, the asset allocation leans heavily towards equities. This suggests a focus on capital appreciation rather than income generation. The limited allocation to bonds provides some diversification and risk reduction. A more balanced allocation could potentially reduce volatility, but may also impact growth potential. Consider whether this equity-heavy allocation aligns with your investment goals and risk tolerance, and adjust if necessary to maintain a comfortable balance.

Sectors Info

  • Technology
    24%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is well-diversified across sectors, with technology leading at 23.76%, followed by financial services and consumer cyclicals. This sectoral balance helps mitigate risks associated with downturns in any single industry. However, the high concentration in technology could lead to increased volatility given the sector's cyclical nature. It's crucial to monitor sector exposures regularly, ensuring they remain aligned with your risk tolerance and market outlook. Adjusting sector weights can help optimize risk-adjusted returns.

Regions Info

  • North America
    68%
  • Europe Developed
    10%
  • Japan
    4%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, which comprises 67.54% of the allocation. This focus provides familiarity and stability, but limits exposure to potentially high-growth regions like emerging markets. While developed markets offer stability, diversifying geographically can capture growth opportunities and reduce regional risks. Consider increasing exposure to underrepresented regions if your goal is to enhance diversification and capture global growth trends.

Redundant positions Info

  • iShares MSCI USA Quality Factor ETF
    Schwab U.S. Large-Cap Growth ETF
    iShares Core S&P 500 ETF
    High correlation

The portfolio includes highly correlated assets, such as the iShares MSCI USA Quality Factor ETF and the Schwab U.S. Large-Cap Growth ETF. High correlation means these assets tend to move in tandem, reducing diversification benefits. To manage risk effectively, it's important to include assets with low correlation, which can provide a buffer during market volatility. Consider replacing or reducing highly correlated holdings to improve diversification and enhance risk management.

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 can potentially be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. This involves adjusting the existing asset allocations to enhance efficiency without adding new assets. By focusing on the current holdings, you can improve the portfolio's performance relative to its risk. Consider using optimization tools to explore different allocation scenarios, ensuring they align with your investment objectives and risk tolerance. This approach can help maximize returns while managing risk effectively.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.60%
  • iShares Core S&P 500 ETF 1.20%
  • iShares MSCI USA Quality Factor ETF 1.00%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Invesco S&P 500® Momentum ETF 0.40%
  • Vanguard Small-Cap Index Fund ETF Shares 1.30%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 3.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 1.75%

The portfolio's average dividend yield is 1.75%, with notable contributions from the Vanguard Total Bond Market ETF at 3.6% and the Vanguard FTSE Developed Markets ETF at 3.0%. Dividends provide a steady income stream, which can be particularly beneficial during market downturns. While growth is a primary focus, maintaining a portion of income-generating assets can enhance portfolio stability. Regularly review dividend yields to ensure they align with your income needs and reinvestment strategy.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • iShares Core S&P 500 ETF 0.03%
  • iShares MSCI USA Quality Factor ETF 0.15%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard Small-Cap Index Fund ETF Shares 0.05%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is a low 0.05%, indicating cost-effective management. Low fees are crucial for maximizing long-term returns, as they reduce the drag on investment performance. While the portfolio is already cost-efficient, it's important to continually monitor fees, especially if considering new investments. Opt for low-cost options whenever possible to enhance net returns over time. Keep an eye on any changes in fund expenses that might impact overall costs.

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