A balanced portfolio with strong U.S. focus and moderate international 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 balanced growth and income. With a strong focus on U.S. equities and diversification across international markets, it supports long-term wealth accumulation. The inclusion of dividend-paying assets provides a steady income stream, appealing to those who value both growth and income. Ideal for investors with a medium to long-term horizon, it balances risk and return, making it suitable for those who are comfortable with some volatility in pursuit of higher returns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    35.00%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    15.00%
  • Vanguard FTSE Europe Index Fund ETF Shares
    VGK - US9220428745
    15.00%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares
    VWO - US9220428588
    15.00%
  • Fidelity Govt Cash Rsrvs
    FDRXX
    10.00%
  • Franklin FTSE India ETF
    FLIN - US35473P7693
    5.00%
  • SPDR® Gold Shares
    GLD - US78463V1070
    5.00%

This portfolio consists of a mix of ETFs and a cash reserve fund, with 35% allocated to the Vanguard S&P 500 ETF, indicating a strong U.S. focus. The inclusion of growth, European, and emerging markets ETFs adds a layer of diversification. The portfolio's allocation aligns with a balanced risk profile, offering a blend of stability and growth potential. Compared to a typical benchmark, it maintains a broad diversification across asset classes, sectors, and geographies. This structure supports long-term growth while managing risk through diversification across various markets and sectors.

Growth Info

Historically, this portfolio has shown a solid performance with a Compound Annual Growth Rate (CAGR) of 11.35%. This rate reflects how much the portfolio has grown annually on average, similar to calculating a car's speed over a long trip. The portfolio's max drawdown of -29.55% indicates the largest peak-to-trough decline, which is a measure of risk. Compared to benchmarks, the performance is robust, though the drawdown suggests exposure to market volatility. A focus on maintaining a diversified mix of assets can help mitigate future downturns, enhancing stability.

Projection Info

The Monte Carlo simulation, which uses historical data to predict potential future outcomes, shows a promising outlook for this portfolio. With a median return projection of 236.2% and a high percentage of simulations yielding positive returns, the portfolio is well-positioned for growth. However, it's important to note that these projections are based on historical data and do not guarantee future results. Regularly reviewing and adjusting the portfolio in response to changing market conditions can optimize potential returns while managing risk.

Asset classes Info

  • Stocks
    84%
  • Other
    5%
  • Cash
    1%
  • No data
    0%

The portfolio's allocation across asset classes is heavily weighted towards stocks at 84%, with minimal exposure to cash and other asset types. This strong stock allocation supports growth but may expose the portfolio to market volatility. Compared to benchmark norms, the portfolio aligns with a growth-oriented strategy. Diversifying further into other asset classes, such as bonds, could provide additional stability and reduce potential drawdowns. Balancing growth with risk management is key to long-term success.

Sectors Info

  • Technology
    23%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Health Care
    8%
  • Telecommunications
    8%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio's sector allocation is led by technology at 23%, followed by financial services and consumer cyclicals. This tech-heavy orientation may lead to higher volatility, especially during interest rate hikes. However, it also offers growth potential in a rapidly advancing sector. The sector distribution is well-diversified, aligning closely with benchmark data. To mitigate sector-specific risks, consider maintaining a balanced sector exposure, ensuring no single sector dominates the portfolio.

Regions Info

  • North America
    50%
  • Europe Developed
    15%
  • Asia Emerging
    14%
  • Asia Developed
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Europe Emerging
    0%

With 50% exposure to North America, the portfolio has a strong U.S. focus, complemented by European and emerging market allocations. This geographic distribution offers a balanced approach to diversification, reducing reliance on any single region. Compared to common benchmarks, the portfolio is well-positioned to capture global growth opportunities. However, increasing exposure to underrepresented regions like Latin America or Africa could further enhance diversification and potentially yield higher returns.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    27%
  • Mid-cap
    13%
  • Unknown
    5%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio leans towards larger market capitalizations, with 42% in mega-cap and 27% in big-cap stocks. This focus on larger companies typically provides stability and lower volatility, as these firms are often well-established. However, smaller-cap stocks, though riskier, can offer higher growth potential. Compared to benchmarks, this allocation aligns with a conservative growth strategy. Incorporating more small- and mid-cap stocks could diversify risk and possibly enhance returns, balancing stability with opportunity.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The portfolio contains highly correlated assets, particularly between the Vanguard S&P 500 ETF and Schwab U.S. Large-Cap Growth ETF. High correlation means these assets tend to move together, which can limit diversification benefits during market downturns. To enhance diversification, consider reducing overlap by replacing one of these ETFs with an asset that moves independently. This adjustment can improve the portfolio's resilience to market fluctuations, optimizing the risk-return balance.

Dividends Info

  • Fidelity Govt Cash Rsrvs 4.30%
  • Franklin FTSE India ETF 1.00%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard FTSE Europe Index Fund ETF Shares 1.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.72%

With a total dividend yield of 1.72%, this portfolio offers moderate income potential. Dividend yields contribute to overall returns, providing a steady income stream. While the yield is not the primary focus of a growth-oriented portfolio, it adds a layer of stability. For investors seeking higher income, increasing allocation to dividend-paying assets could be beneficial. Balancing growth and income can enhance the portfolio's overall performance and meet diverse financial goals.

Ongoing product costs Info

  • Fidelity Govt Cash Rsrvs 0.26%
  • Franklin FTSE India ETF 0.19%
  • SPDR® Gold Shares 0.40%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard FTSE Europe Index Fund ETF Shares 0.13%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is impressively low at 0.10%, supporting better long-term performance by minimizing costs. Low costs are crucial as they directly impact net returns, akin to reducing friction in an engine for smoother performance. Compared to industry averages, this cost structure is favorable, allowing more of the portfolio's growth to benefit the investor. Continuing to monitor and manage costs will ensure that the portfolio remains efficient and aligned with financial goals.

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 portfolio can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on current assets. By adjusting allocations, the portfolio could achieve a higher expected return of 15.06% with the same risk level. This optimization focuses on maximizing returns without increasing risk, though it does not account for diversification or other goals. Regularly reviewing and rebalancing the portfolio can ensure it remains aligned with optimal risk-return strategies.

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