A balanced portfolio with a global focus and a strong emphasis on large-cap stocks

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists of 90% Vanguard Total World Stock Index Fund ETF, 5% Berkshire Hathaway, and 5% JPMorgan Chase. This composition heavily leans towards global equity exposure, with a modest allocation to individual stocks. Compared to a benchmark, this portfolio is concentrated but broadly diversified across global markets. The high ETF allocation ensures diversification across sectors and geographies, mitigating individual stock risk. Consider reviewing the balance between the ETF and individual stocks to ensure alignment with long-term goals.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.57% with a maximum drawdown of -34.61%. This indicates solid growth but also significant potential losses during downturns. Compared to benchmarks, this performance is robust, reflecting the global equity market's strength. However, past performance doesn't guarantee future results. To manage drawdowns, consider incorporating more defensive assets or increasing cash reserves to cushion against volatility.

Projection Info

Using Monte Carlo simulations, the portfolio's future returns have been projected, showing an annualized return of 14.59% with positive outcomes in 978 of 1,000 simulations. The 5th percentile projects a 35.3% return, while the 67th percentile forecasts 627.9%. Monte Carlo simulations use historical data to estimate potential outcomes, but they don't predict future events. To refine projections, consider adjusting asset allocation or incorporating more conservative investments to reduce risk.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is predominantly allocated to stocks (99%) with a minor cash position (1%). This heavy stock allocation suggests a high growth potential but also increased volatility. Compared to a balanced benchmark, this portfolio is aggressive, prioritizing growth over stability. To enhance diversification, consider including fixed-income assets or alternative investments, which can reduce volatility and provide steady income, particularly in turbulent markets.

Sectors Info

  • Financials
    25%
  • Technology
    22%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The portfolio is well-distributed across various sectors, with notable concentrations in Financial Services (25%) and Technology (22%). This sectoral balance aligns with global benchmarks, offering exposure to key growth areas. However, sector concentration can increase volatility, particularly in downturns affecting specific industries. To mitigate this risk, regularly review sector allocations and consider rebalancing to maintain a diversified exposure that aligns with market trends.

Regions Info

  • North America
    70%
  • Europe Developed
    13%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is weighted towards North America (70%), with smaller allocations to Europe Developed (13%) and Asia Emerging (5%). This regional focus aligns with global market capitalization but may limit exposure to faster-growing emerging markets. While North America has been a strong performer, diversifying further into regions like Asia or Latin America could enhance growth potential and reduce reliance on any single region's economic conditions.

Market capitalization Info

  • Mega-cap
    48%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization is concentrated in mega (48%) and big (28%) companies, with limited exposure to small (5%) and micro (1%) caps. This bias towards larger firms provides stability and lower volatility but may miss out on the higher growth potential of smaller companies. To capture broader market opportunities, consider increasing exposure to small and medium-cap stocks, which can offer diversification benefits and higher returns over time.

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 could be optimized for better risk-return efficiency, achieving an expected return of 16.07% with the same risk level. This involves reallocating existing assets to achieve the best possible risk-return ratio, known as the Efficient Frontier. While optimizing, it's important to maintain diversification and consider transaction costs. Regularly review and adjust allocations to ensure the portfolio remains aligned with personal risk tolerance and investment goals.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 2.06%

The portfolio's dividend yield is 2.06%, with contributions from JPMorgan Chase (1.70%) and the Vanguard ETF (2.20%). Dividends provide a steady income stream, which can be reinvested for compound growth. This yield aligns with typical market benchmarks, offering a balance between growth and income. To enhance income, consider adding high-dividend stocks or dividend-focused funds, which can provide additional cash flow and stability during market fluctuations.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.06%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.06% for the Vanguard ETF. Low costs are crucial for long-term performance, as they minimize the drag on returns. This cost efficiency aligns well with best practices, supporting better net returns over time. To maintain this advantage, continue monitoring expense ratios and consider switching to lower-cost alternatives if available, ensuring that costs remain minimized without sacrificing portfolio quality.

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