Balanced Portfolio with Strong Historic Performance and Moderate Diversification Across Asset Classes and Sectors

Report created on Nov 20, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists of four ETFs, with a significant allocation to Franklin FTSE India ETF and Vanguard S&P 500 ETF, each comprising 37.5% of the total. SPDR Gold MiniShares represents 17.5%, while BondBloxx ETF Trust accounts for 7.5%. This mix indicates a balanced approach, blending equities with gold and bonds for diversification. The portfolio is moderately diversified, suggesting a focus on both growth and stability, catering to a balanced risk profile. This composition offers exposure to various asset classes, which can help mitigate risks associated with market volatility.

Growth Info

Historically, the portfolio has demonstrated a strong performance with a compound annual growth rate (CAGR) of 13.07%. The maximum drawdown of -29.18% highlights the potential downside risk during market downturns. Notably, 90% of the returns were generated on just 25 days, emphasizing the importance of staying invested during volatile periods. This performance indicates a robust strategy, providing substantial returns over time. However, it's essential to remain aware of the potential drawdowns and ensure that the risk level aligns with long-term financial goals.

Projection Info

Using a Monte Carlo simulation, the portfolio's future performance was projected with 1,000 simulations. Assuming a hypothetical initial investment, the simulation reveals a median return of 295.58% and an annualized return of 11.54%. With 982 simulations yielding positive returns, this projection suggests a favorable outlook. Monte Carlo simulations provide a range of possible outcomes, offering insights into potential risks and rewards. While this model indicates promising growth, it's crucial to understand the inherent uncertainties and continuously evaluate the portfolio's alignment with personal financial objectives.

Asset classes Info

  • Stocks
    74%
  • Other
    18%
  • Bonds
    7%
  • Cash
    1%

The portfolio's asset allocation includes 74.4% in stocks, 17.5% in gold, and 7.4% in bonds, with a small cash position. This distribution reflects a growth-oriented strategy, leveraging equities for capital appreciation while incorporating gold and bonds for stability and diversification. The allocation aligns with a balanced risk profile, aiming to capture market gains while managing volatility. To enhance resilience, consider periodically reviewing the asset mix to ensure it aligns with evolving financial goals and risk tolerance, potentially adjusting allocations as needed.

Sectors Info

  • Financials
    21%
  • Technology
    17%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Industrials
    6%
  • Telecommunications
    5%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    1%

Sector allocation shows a diverse spread, with significant exposure to financial services (21.37%) and technology (17.29%), followed by consumer cyclicals and healthcare. This diversification across sectors helps mitigate risks associated with sector-specific downturns. The focus on financial services and technology suggests a growth-oriented approach, leveraging sectors with strong potential for innovation and expansion. Regularly reviewing sector exposure can help maintain a balanced portfolio, ensuring that it remains aligned with market trends and individual investment objectives.

Regions Info

  • Asia Emerging
    38%
  • North America
    37%
  • Europe Developed
    8%

Geographically, the portfolio is concentrated in Asia Emerging (37.5%) and North America (37.28%), with smaller allocations to Europe Developed and Asia Developed. This geographic distribution offers exposure to both developed and emerging markets, balancing growth potential with stability. The significant allocation to Asia Emerging highlights a focus on regions with high growth prospects. To optimize geographic diversification, consider periodically assessing regional exposures to ensure they align with global economic trends and personal investment strategies.

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 is close to the efficient frontier, indicating it is well-optimized for its current risk level. The efficient frontier represents the set of optimal portfolios offering the highest expected return for a given level of risk. While the portfolio is efficient, exploring different risk levels might uncover opportunities for higher returns. Consider revisiting the risk-return balance periodically to ensure alignment with evolving financial goals, potentially adjusting the portfolio's risk level to enhance performance.

Dividends Info

  • Franklin FTSE India ETF 1.60%
  • BondBloxx ETF Trust 7.10%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.58%

The portfolio offers a modest total dividend yield of 1.58%, with contributions from Franklin FTSE India ETF and Vanguard S&P 500 ETF. The BondBloxx ETF Trust provides a higher yield, enhancing the income component. Dividends can offer a steady income stream, complementing capital appreciation. While the current yield is moderate, reinvesting dividends can significantly boost long-term returns. Consider reviewing dividend policies and yields periodically to ensure they align with income needs and investment goals.

Ongoing product costs Info

  • Franklin FTSE India ETF 0.19%
  • SPDR Gold MiniShares 0.10%
  • BondBloxx ETF Trust 0.55%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, reflecting a cost-effective investment strategy. The Vanguard S&P 500 ETF offers the lowest cost at 0.03%, while BondBloxx ETF Trust is higher at 0.55%. Minimizing costs is crucial for maximizing net returns over time. This low TER indicates efficient management, allowing more capital to be invested and grow. Regularly reviewing expense ratios and seeking cost-effective alternatives can help maintain a lean portfolio, optimizing returns.

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