Balanced Growth Portfolio with Moderate Diversification and Strong Historical Performance

Report created on Dec 3, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed of seven ETFs, with a notable focus on U.S. equities. The Vanguard S&P 500 ETF holds the largest share at 47.5%, indicating a strong preference for large-cap U.S. stocks. Other significant positions include the Avantis U.S. Small Cap Value ETF and Schwab U.S. Large-Cap Growth ETF, both at 15%. This composition suggests a growth-oriented strategy, with a moderate allocation to international equities and bonds. A balanced mix of large-cap, small-cap, and international stocks is evident, providing a base for potential growth while maintaining some level of diversification.

Growth Info

The portfolio has demonstrated impressive historical performance, with a compound annual growth rate (CAGR) of 15.94%. This suggests that the portfolio has been quite successful in generating returns over time. However, it's important to note the maximum drawdown of -32.71%, which indicates the potential for significant short-term losses. The fact that only 19 days account for 90% of returns highlights the importance of staying invested during volatile periods. The strong historical returns are encouraging, but it's crucial to consider the associated risks and volatility when evaluating performance.

Projection Info

Using a Monte-Carlo simulation, which models potential future outcomes based on historical data, the portfolio shows promising forward projections. With 1,000 simulations, the median expected growth is 264.57%, with an annualized return of 12.15%. The downside risk is evident, with a 5th percentile loss of -9.53%, but the majority of simulations (942) resulted in positive returns. This analysis suggests a favorable outlook, but it's essential to remain aware of the inherent uncertainties and variability in future performance.

Asset classes Info

  • Stocks
    92%
  • Bonds
    7%

The portfolio is heavily weighted towards equities, with 92.22% in stocks, 7.48% in bonds, and a small cash allocation. This asset class distribution aligns with a growth-focused strategy, prioritizing capital appreciation over income generation. The limited bond exposure provides some diversification and potential downside protection, but the high equity allocation increases the portfolio's sensitivity to market fluctuations. To balance risk and return, consider periodically reviewing the asset class mix, ensuring it aligns with long-term objectives and risk tolerance.

Sectors Info

  • Technology
    25%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation in the portfolio is diverse, with technology leading at 25.37%. Financial services and consumer cyclicals also have significant representation. This sector mix suggests a tilt towards growth-oriented industries, which can drive future returns but may also introduce volatility. The presence of defensive sectors like consumer defensive and utilities offers some stability. Regularly reviewing sector exposure can help maintain a balanced approach, ensuring that the portfolio is not overly concentrated in any single industry and is well-positioned to capture opportunities across various sectors.

Regions Info

  • North America
    78%
  • Europe Developed
    6%
  • Japan
    3%
  • Asia Emerging
    2%
  • Asia Developed
    1%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly focused on North America, accounting for 78.22% of the allocation. This emphasizes a strong home bias, which can benefit from familiarity and potential tax advantages. However, international exposure is limited, with Europe Developed and Japan being the most significant non-U.S. regions. While this focus on North America has historically been beneficial, diversifying further into international markets could help mitigate region-specific risks and capture growth opportunities in other parts of the world. Consider exploring additional global diversification to balance geographic exposure.

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 optimization chart suggests that there is room for improvement in terms of risk-return efficiency. To achieve a riskier portfolio, one could allocate more to equities, particularly in high-growth sectors. Conversely, to create a more conservative portfolio, increasing the bond allocation would be beneficial. However, before making any changes, it's important to ensure that the current asset allocation aligns with personal financial goals and risk tolerance. Exploring the efficient frontier can provide insights into potential adjustments that balance risk and reward, optimizing the portfolio's performance.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.10%
  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 3.60%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 4.00%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 1.60%

The portfolio offers a modest dividend yield of 1.6%, with contributions from various ETFs. Notably, the Vanguard Long-Term Treasury Index Fund and Avantis International Small Cap Value ETFs provide higher yields, enhancing income potential. While dividends are not the primary focus of this growth-oriented portfolio, they offer a valuable source of passive income. Continuously evaluating dividend yield and reinvesting income can contribute to long-term wealth accumulation. Consider the role of dividends in achieving financial goals and explore opportunities to optimize yield without compromising growth potential.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Intermediate-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is relatively low at 0.09%, indicating cost-effective management. The Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF have particularly low expense ratios, contributing to the overall affordability. Keeping costs low is crucial for maximizing net returns, as high fees can erode investment gains over time. Regularly reviewing and comparing expense ratios ensures that the portfolio remains cost-efficient. Consider exploring opportunities to further reduce costs, such as opting for low-cost fund alternatives or negotiating fees with service providers.

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