A balanced portfolio with tech focus and strong international diversification potential

Report created on Mar 22, 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 is heavily weighted towards equities, with 60% in the Invesco NASDAQ 100 ETF, 20% in the Schwab U.S. Dividend Equity ETF, and 20% in the Vanguard Total International Stock Index Fund ETF. This composition provides a blend of growth and dividend income. Compared to a typical balanced benchmark, this portfolio leans more heavily on technology and international exposure. While the tech focus offers growth potential, it's essential to balance it with other sectors to mitigate volatility. Consider diversifying further by adding more asset classes, such as bonds, to enhance stability.

Growth Info

Historically, the portfolio has delivered a robust CAGR of 12.63%, indicating strong growth over time. However, the max drawdown of -29.10% highlights the potential for significant short-term losses. This performance is impressive compared to benchmarks, but it emphasizes the importance of maintaining a long-term perspective. The concentration in the NASDAQ 100 suggests the portfolio is more volatile than a typical balanced portfolio. To mitigate this, consider strategies like dollar-cost averaging to smooth out returns over time.

Projection Info

Forward projections using Monte Carlo simulations show a median growth of 328.1%, with a 67th percentile of 458.3%. This method uses historical data to simulate potential outcomes, though it's important to note that past performance doesn't guarantee future results. The high number of simulations with positive returns (979 out of 1,000) suggests a favorable outlook. However, maintaining a diversified approach is crucial, as unexpected market events can impact projections. Regularly review and adjust the portfolio to align with evolving market conditions and personal goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's allocation is 99% in stocks, with a minimal 1% cash position. This heavy equity weighting offers growth potential but increases risk, particularly in volatile markets. Compared to balanced benchmarks, the lack of fixed income or alternative investments may limit downside protection. To enhance diversification, consider introducing bonds or other asset classes that can provide stability and reduce volatility. This approach can help balance risk and return, especially during market downturns.

Sectors Info

  • Technology
    36%
  • Consumer Discretionary
    12%
  • Telecommunications
    12%
  • Health Care
    9%
  • Financials
    8%
  • Consumer Staples
    8%
  • Industrials
    7%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    1%
  • Real Estate
    1%

Technology dominates the sector allocation at 36%, followed by consumer cyclicals and communication services at 12% each. While a tech-heavy portfolio can drive growth, it may also experience higher volatility, particularly during interest rate hikes. The sector diversification is relatively broad, but the concentration in technology suggests a need to monitor sector trends closely. Consider gradually rebalancing towards underrepresented sectors to maintain a more balanced risk profile and capitalize on diverse economic cycles.

Regions Info

  • North America
    80%
  • Europe Developed
    9%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Latin America
    1%
  • Africa/Middle East
    1%

The portfolio is predominantly exposed to North America (80%), with smaller allocations to Europe Developed (9%) and Asia Emerging (3%). This geographic distribution aligns with common benchmarks but may limit exposure to high-growth regions like emerging markets. While the focus on North America has historically been advantageous, increasing global diversification can reduce regional risks. Consider gradually increasing exposure to underrepresented regions to capture growth opportunities and enhance overall portfolio resilience.

Market capitalization Info

  • Mega-cap
    41%
  • Large-cap
    40%
  • Mid-cap
    16%
  • Small-cap
    2%

The portfolio is well-diversified across market capitalizations, with 41% in mega-cap, 40% in big-cap, 16% in medium-cap, and 2% in small-cap stocks. This distribution provides a balance between stability and growth potential. Compared to benchmarks, the allocation leans towards larger companies, which can offer more stability but may limit upside potential. Consider increasing exposure to small and mid-cap stocks to enhance growth opportunities and diversify risk across different company sizes.

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 potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the current asset allocation to achieve a more efficient portfolio. While the existing allocation is strong, exploring optimization can enhance returns for a given level of risk. This process focuses solely on the current assets and their allocation, emphasizing efficiency rather than diversification or other goals. Regularly reviewing the portfolio's efficiency can ensure alignment with personal risk tolerance and market conditions.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.42%

The portfolio's dividend yield stands at 1.42%, driven primarily by the Schwab U.S. Dividend Equity ETF and the Vanguard Total International Stock Index Fund ETF. Dividends provide a steady income stream and can enhance total returns, particularly in low-growth environments. While the yield is moderate, reinvesting dividends can compound growth over time. To increase income potential, consider gradually shifting towards higher-yielding assets or funds, while maintaining a balance with growth-oriented investments.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) is a low 0.11%, which is advantageous for long-term performance. Lower costs mean more of your investment returns stay in your portfolio, compounding over time. This cost efficiency is commendable and aligns well with best practices. To maintain this advantage, regularly review and compare the expense ratios of your holdings with similar funds. This ensures that the portfolio remains cost-effective and maximizes net returns.

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