A balanced portfolio with strong U.S. focus and low-cost ETFs for moderate growth

Report created on Apr 13, 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 predominantly composed of two Vanguard ETFs, with 80% in the S&P 500 ETF and 20% in the Total International Stock Index Fund ETF. This allocation is heavily weighted towards U.S. equities, reflecting a bias towards domestic markets. While the portfolio is broadly diversified with exposure to different sectors and regions, the heavy tilt towards a single index may limit diversification benefits. Consider whether this concentration aligns with your investment goals or if a slight adjustment could enhance diversification.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 11.41%, demonstrating robust performance. This is impressive when compared to the general market, indicating effective asset selection. However, the maximum drawdown of -33.92% highlights potential vulnerability during market downturns. While past performance is not indicative of future results, understanding these trends can guide future expectations. Monitoring market conditions and adjusting allocations during volatile periods could help mitigate potential losses.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a wide range of potential returns. With a median projected growth of 203.6% and a positive return in 952 out of 1,000 simulations, the portfolio has a favorable outlook. However, it's important to note that these projections are hypothetical and not guaranteed. Regularly reviewing and adjusting the portfolio based on changing market conditions and personal goals can help ensure alignment with desired outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely invested in stocks, with a minor allocation to cash. This heavy stock allocation suggests a focus on growth, but it also comes with higher volatility. Diversification across asset classes could potentially reduce risk. While the current allocation aligns with a growth-oriented strategy, introducing bonds or other asset classes may provide more stability, especially during market downturns, without significantly sacrificing growth potential.

Sectors Info

  • Technology
    28%
  • Financials
    15%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Telecommunications
    9%
  • Industrials
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation shows a strong emphasis on technology, with 28% of the portfolio invested in this sector. While tech stocks have driven significant growth in recent years, they can also be more volatile, particularly during interest rate hikes. The portfolio's sector composition aligns well with common benchmarks, suggesting a balanced approach. However, consider whether this sector concentration matches your risk tolerance and investment goals, and adjust if necessary.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily weighted towards North America, with 81% exposure. This concentration provides stability from a familiar market but limits exposure to international growth opportunities. While developed markets like Europe and Japan are included, emerging markets are underrepresented. Expanding exposure to these regions could enhance diversification and capture growth in less mature markets, aligning with a more globally diversified strategy.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    34%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization is skewed towards mega and big-cap stocks, comprising 80% of the allocation. This focus on large-cap stocks typically offers stability and lower risk but may limit potential high-growth opportunities found in smaller companies. Balancing the allocation with more medium and small-cap stocks could enhance growth prospects and provide better diversification, aligning with a broader market 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 current portfolio could be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This involves adjusting the allocation between existing assets to achieve higher returns for the same level of risk or maintain returns while reducing risk. This optimization focuses solely on the current assets, not introducing new ones. Regularly reviewing this balance can ensure the portfolio remains aligned with your risk tolerance and investment goals.

Dividends Info

  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.78%

The portfolio's dividend yield is 1.78%, with the S&P 500 ETF contributing 1.40% and the International Stock Index Fund 3.30%. Dividends provide a steady income stream and can be reinvested for growth. This yield aligns with a balanced portfolio, offering both growth and income potential. Consider whether the current yield meets your income needs or if adjustments are needed to increase dividend exposure without compromising growth.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) is impressively low at 0.03%, thanks to the cost-efficient Vanguard ETFs. Lower costs enhance long-term returns by minimizing the drag on performance. This cost structure is well-aligned with best practices, ensuring more of your money is working for you. Continue to monitor and manage costs to maintain this advantage, as even small increases in fees can impact long-term growth.

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