A deep dive into a portfolio with a strong international focus and low costs

Report created on Jun 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is notably heavy on international stocks, with a 90% allocation to the Vanguard Total International Stock Index Fund ETF Shares and a 10% allocation to the Vanguard Total Stock Market Index Fund ETF Shares. This composition indicates a strategic emphasis on global diversification beyond the investor's home country, the USA. The portfolio's diversification is further underscored by its exposure to a wide range of sectors and geographic regions, showcasing a deliberate approach to spreading risk across different markets and industries.

Growth Info

Historical performance data reveals a Compound Annual Growth Rate (CAGR) of 8.18%, with a maximum drawdown of -34.76%. These figures suggest that the portfolio has experienced significant volatility, but has also provided robust returns over time. The days contributing to 90% of returns being so few indicates that a handful of exceptionally good days have driven the portfolio's performance, a common characteristic of equity investments that underscores the importance of staying invested over the long term.

Projection Info

Monte Carlo simulations, which use historical data to project future performance under a variety of market conditions, suggest a wide range of potential outcomes for this portfolio. With 962 out of 1,000 simulations yielding positive returns, the portfolio shows a strong likelihood of future gains. However, the significant spread between the 5th and 67th percentiles highlights the potential for volatility, emphasizing the need for investors to maintain a long-term perspective.

Asset classes Info

  • Stocks
    97%
  • Cash
    3%

The asset allocation is heavily skewed towards stocks (97%), with a minimal cash reserve (3%). This high equity exposure is typical for portfolios aiming for growth over the long term but comes with increased volatility. The absence of bonds or alternative investments limits the portfolio's ability to hedge against stock market downturns, potentially making it more susceptible to short-term fluctuations.

Sectors Info

  • Financials
    22%
  • Industrials
    15%
  • Technology
    15%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Consumer Staples
    6%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    3%

Sector allocation is well-diversified, with financial services, industrials, and technology sectors leading the composition. This diversification helps mitigate sector-specific risks, but the significant weight in technology and financial services could expose the portfolio to higher volatility, given these sectors' sensitivity to economic cycles and interest rate changes.

Regions Info

  • Europe Developed
    35%
  • North America
    17%
  • Asia Emerging
    14%
  • Japan
    14%
  • Asia Developed
    9%
  • Australasia
    4%
  • Africa/Middle East
    3%
  • Latin America
    2%
  • Europe Emerging
    1%

The portfolio's geographic distribution emphasizes developed Europe and North America, with notable allocations to emerging Asia and Japan. This broad geographic exposure enhances diversification, reducing the impact of regional downturns on the overall portfolio. However, the underrepresentation of Latin America and Africa/Middle East suggests potential missed opportunities in these emerging markets.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    31%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The focus on mega and big-cap stocks (75% combined) suggests a preference for established, large companies likely to offer stability and consistent dividends. However, the relatively smaller allocation to mid, small, and micro-cap stocks may limit the portfolio's potential for high growth rates, as smaller companies often outperform their larger counterparts in bullish markets.

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's current expected return of 8.18% is below the optimal portfolio's expected return of 13.78% at a similar risk level, suggesting room for improvement in risk-return optimization. Adjusting the asset allocation to match the Efficient Frontier could potentially enhance returns without increasing volatility, emphasizing the value of periodic portfolio reviews to realign with these optimal benchmarks.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.74%

The dividend yields from the two ETFs, averaging at 2.74%, contribute to the portfolio's total returns, providing a steady income stream in addition to potential capital gains. This yield is particularly appealing for investors seeking regular income, although it's important to balance the desire for dividends with the growth potential of reinvesting those earnings.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.05%

With a total expense ratio (TER) of just 0.05%, the portfolio stands out for its cost efficiency, maximizing the investor's potential returns by minimizing the drag on performance due to fees. This low-cost approach is especially beneficial over the long term, as even small differences in fees can compound into significant impacts on net returns.

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