Balanced portfolio with strong S&P 500 focus and moderate international exposure

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 a moderate risk tolerance seeking balanced growth and income. With a focus on U.S. large-cap equities and some international exposure, it’s ideal for someone with a long-term investment horizon aiming for capital appreciation. The inclusion of a Treasury bond ETF provides a safety net, appealing to those who wish to mitigate risk while still pursuing growth. This strategy is well-suited for individuals who value stability but are open to some market volatility for potential higher returns.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    80.00%
  • iShares® 0-3 Month Treasury Bond ETF
    SGOV - US46436E7186
    10.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    10.00%

The portfolio is heavily weighted towards the Vanguard S&P 500 ETF, which makes up 80% of the total allocation. This indicates a strong focus on U.S. large-cap equities, providing exposure to the top 500 companies in the U.S. The remaining 20% is split between a short-term Treasury bond ETF and an international stock index fund, each at 10%. This allocation aligns with a balanced risk profile, but the heavy concentration in the S&P 500 limits diversification across different asset types. Consider diversifying further to include more asset classes such as real estate or commodities to potentially reduce risk.

Growth Info

With a 13.96% CAGR, the portfolio has performed well historically, significantly surpassing typical market averages. A hypothetical investment of $10,000 would have grown substantially over the years. However, it’s important to note the max drawdown of -23.13%, indicating potential for significant losses during downturns. Comparing this to a benchmark like the S&P 500, the performance is robust but not without volatility. This historical data is a useful guide, but remember that past performance does not guarantee future results. Regularly monitoring and adjusting the portfolio can help maintain performance.

Projection Info

A Monte Carlo simulation, which uses historical data to project future outcomes, suggests a wide range of potential returns. With 1,000 simulations, the median outcome is a 257.4% increase, while the 5th percentile suggests a 48.5% increase. This highlights the uncertainty in future markets. However, 994 simulations show positive returns, indicating a high likelihood of growth. Keep in mind that these projections are based on historical trends and may not account for future market changes. Regularly reviewing the portfolio's alignment with personal goals and market conditions is advisable.

Asset classes Info

  • Stocks
    90%
  • Cash
    10%
  • Other
    0%
  • No data
    0%

The portfolio is primarily composed of stocks (90%) and a small allocation to cash (10%) through the Treasury bond ETF. This heavy stock allocation suggests a growth-oriented strategy, which can yield higher returns but also comes with increased volatility. Compared to a typical balanced portfolio, which might include bonds or alternative assets, this allocation is less diversified. To enhance diversification, consider adding other asset classes, such as bonds or real estate, which can provide stability and income during market downturns.

Sectors Info

  • Technology
    27%
  • Financials
    13%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Industrials
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The sector allocation shows a significant concentration in technology (27%), followed by financial services and consumer cyclicals. This tech-heavy focus aligns with recent market trends but may increase volatility, especially during periods of rising interest rates. The remaining sectors are more evenly distributed, providing some balance. Compared to common benchmarks, this allocation is tech-forward, which could lead to higher growth but also higher risk. Consider reviewing sector allocations periodically to ensure they align with market conditions and personal risk tolerance.

Regions Info

  • North America
    80%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    0%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Europe Emerging
    0%

With 80% of assets in North America, the portfolio is heavily U.S.-centric, which has been beneficial given the strong performance of U.S. markets. However, it limits exposure to international growth opportunities. Only 20% is allocated to other regions, like Europe and Asia, which may offer diversification benefits. Compared to global benchmarks, this geographic allocation is underweight in emerging markets. To mitigate potential U.S. market risks, consider increasing international exposure, particularly in emerging markets, which can offer growth and diversification.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    16%
  • Small-cap
    1%
  • Micro-cap
    0%

The portfolio is predominantly invested in large-cap stocks, with 42% in mega caps and 31% in big caps. This focus on large, established companies provides stability and lower volatility compared to small-cap stocks. However, the minimal exposure to small and mid-cap companies limits growth potential. Compared to a more balanced market cap distribution, this portfolio leans towards safety over growth. Consider gradually increasing exposure to smaller companies, which can offer higher returns over the long term, albeit with increased risk.

Dividends Info

  • iShares® 0-3 Month Treasury Bond ETF 4.50%
  • Vanguard S&P 500 ETF 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.85%

The portfolio’s dividend yield is 1.85%, with the Treasury bond ETF contributing the highest yield at 4.50%. Dividends provide a steady income stream, which can be reinvested to enhance returns. For a balanced portfolio, this yield is modest and reflects the growth-oriented nature of the holdings. Investors seeking higher income might consider increasing exposure to high-dividend stocks or bond funds. Regularly reviewing dividend contributions can help maintain a balance between growth and income, aligning with personal financial goals.

Ongoing product costs Info

  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

With a total expense ratio (TER) of 0.04%, the portfolio is cost-efficient, supporting better long-term returns by minimizing fees that can erode gains. This low-cost structure is a significant advantage, aligning with best practices for maximizing investment returns. Compared to industry averages, these costs are impressively low, indicating efficient management. However, it’s essential to periodically review these costs to ensure they remain competitive and do not increase over time, which could impact overall performance.

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's current configuration is close to the Efficient Frontier, which represents the best possible risk-return ratio using existing assets. While the optimal portfolio suggests a slightly higher expected return at the same risk level, the difference is marginal. The Efficient Frontier helps identify the most efficient use of assets to maximize returns for a given level of risk. Consider minor adjustments to asset allocations to align more closely with the Efficient Frontier, optimizing returns while maintaining the current risk level.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.