A balanced portfolio with a focus on U.S. equities and limited global exposure

Report created on Mar 12, 2025

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.

Positions

The portfolio is evenly divided across five ETFs, each comprising 20% of the total allocation. It includes a mix of U.S. equities, dividend-paying stocks, real estate, and sector-specific investments. This balanced structure offers a blend of growth and income potential. Compared to a typical balanced benchmark, this portfolio is heavily concentrated in U.S. equities, which may limit diversification benefits. Consider diversifying asset classes to include international equities or bonds for a more comprehensive risk management approach.

Growth Info

Historically, the portfolio has delivered a solid Compound Annual Growth Rate (CAGR) of 11.37%. This performance, though impressive, has also experienced a maximum drawdown of -23.71%. The portfolio's returns are concentrated, with 90% of gains occurring over just 18 days. This pattern suggests potential vulnerability to market timing risks. While past performance doesn't guarantee future results, it highlights the need for a strategy that can weather downturns. Diversifying across asset classes and geographies may help mitigate such risks.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance was projected across 1,000 scenarios. The analysis suggests a median return of 318.5% over the investment horizon, with a strong likelihood (984 out of 1,000 simulations) of positive returns. While these projections offer a positive outlook, they rely on historical data, which may not account for future market changes. It's essential to remember that such simulations provide a range of possible outcomes, not guarantees. Regularly reviewing and adjusting the portfolio can help align with changing market conditions.

Asset classes Info

  • Stocks
    80%
  • Real Estate
    20%

The portfolio is heavily weighted towards stocks (80%) and real estate (20%), with no cash allocation. This concentration in equities and real estate can drive growth but may also increase volatility. Compared to a balanced benchmark, which might include bonds, this allocation is more aggressive. Introducing fixed-income assets could provide stability and reduce overall risk, especially during market downturns. A diversified asset class mix can enhance the portfolio's resilience and offer more consistent returns over time.

Sectors Info

  • Health Care
    27%
  • Real Estate
    20%
  • Technology
    19%
  • Consumer Discretionary
    7%
  • Financials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Industrials
    4%
  • Energy
    3%
  • Basic Materials
    1%
  • Utilities
    1%

Sector allocation shows a strong focus on healthcare (27%), real estate (20%), and technology (19%). While these sectors offer growth potential, they also expose the portfolio to sector-specific risks. For instance, a tech-heavy allocation might face higher volatility during interest rate hikes. The portfolio's sector composition is somewhat aligned with benchmark norms, which is beneficial for diversification. However, consider balancing sector weights to avoid overexposure to any single sector's risks.

Regions Info

  • North America
    99%

With 99% of the portfolio allocated to North America, it lacks geographic diversification. This heavy U.S. focus can limit exposure to growth opportunities in other regions and increase vulnerability to U.S.-specific economic risks. Compared to global benchmarks, this allocation is under-diversified. Introducing international equities, particularly from emerging markets, could enhance diversification and potentially improve risk-adjusted returns. A geographically balanced portfolio can better withstand regional economic fluctuations.

Market capitalization Info

  • Large-cap
    43%
  • Mid-cap
    26%
  • Mega-cap
    25%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown leans towards large-cap stocks, with big (43%), mega (25%), and medium (26%) companies dominating. This focus on larger companies can provide stability and lower volatility. However, it may limit exposure to the high growth potential of small and micro-cap stocks, which collectively make up only 5% of the portfolio. Diversifying across market capitalizations can enhance growth prospects and provide a more balanced risk-return profile.

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 risk-return profile could potentially be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio. This approach focuses on reallocating existing assets to achieve maximum efficiency. While the current allocation offers a balanced mix, exploring different weightings might enhance returns or reduce risk. It's important to note that optimization is based on historical data and may not account for future market shifts. Regular reviews and adjustments can help maintain an optimal risk-return balance.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.70%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard S&P 500 ETF 1.30%
  • Health Care Select Sector SPDR® Fund 1.10%
  • Weighted yield (per year) 2.10%

The portfolio's dividend yield stands at 2.10%, with contributions from various ETFs. Dividend income can provide a stable return stream, especially during periods of market volatility. This yield is attractive for investors seeking income alongside growth. However, the focus on dividends may limit exposure to high-growth sectors that typically offer lower yields. Balancing dividend-paying assets with growth-oriented investments can optimize both income and capital appreciation.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Health Care Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is an impressively low 0.09%, indicating cost efficiency. Low costs are crucial for maximizing long-term returns, as they reduce the drag on performance. This alignment with best practices supports better compounding over time. Maintaining low costs while achieving diversification and growth objectives is commendable. Regularly reviewing expense ratios and seeking cost-effective investment options can further enhance portfolio performance.

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