Balanced global stock mix with strong diversification and impressively efficient risk adjusted performance
Report created on Jun 6, 2024Risk profile
4/7
Diversification profile
3/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 45.00% -
AV American Century ETF Trust
AVGV - US0250722164 30.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 25.00%
The portfolio is a simple three‑fund setup made entirely of stock ETFs: a broad US market fund at 45%, an actively managed American Century ETF at 30%, and a broad international fund at 25%. That blend creates a core “total market” foundation, plus an active satellite for potential added return or risk control. Structurally, this is a very clean, easy‑to‑maintain design with clear roles for each position. A key takeaway is that simplicity here is a strength: with only three holdings, it’s still covering thousands of companies worldwide, which makes ongoing monitoring, rebalancing, and tax management more straightforward than more complicated portfolios.
Growth
Over the most recent period, $1,000 grew to about $1,512, giving a compound annual growth rate (CAGR) of 16.32%. CAGR is the “average speed” of growth per year, smoothing out ups and downs. This slightly beat both the US market and the global market, while also experiencing a smaller maximum drawdown than the US benchmark and similar downside to the global one. Max drawdown measures the worst peak‑to‑trough drop, a good proxy for how painful bad times can feel. The combination of above‑benchmark returns with no extra drawdown is a healthy sign that the mix has been efficient, though of course past performance can’t guarantee the future.
Asset classes
- Stocks 100%
All assets are in stocks, with no bonds, cash, or alternatives. That means full exposure to equity growth and equity volatility, without the natural cushion that bonds or cash can provide during market stress. For long horizons, being fully in stocks can boost expected returns, but it also increases the size and frequency of short‑term drawdowns. Relative to “balanced” benchmarks, which often include sizable bond allocations, this portfolio is more growth‑oriented and more sensitive to equity market cycles. A practical implication is that any need for short‑term withdrawals or near‑term goals should usually be managed outside this portfolio or with a clear plan for handling downturns.
Sectors
- Technology 21%
- Financials 17%
- Industrials 14%
- Consumer Discretionary 11%
- Health Care 8%
- Telecommunications 7%
- Energy 7%
- Consumer Staples 5%
- Basic Materials 5%
- Utilities 2%
- Real Estate 2%
Sector exposure is broad: technology is the largest at 21%, followed by financials, industrials, and consumer discretionary, with smaller allocations across health care, telecoms, energy, staples, materials, utilities, and real estate. This distribution is quite close to global equity benchmarks, which is a strong indicator of healthy diversification across economic areas. Tech and consumer‑oriented businesses drive a good portion of the growth potential, while financials and industrials add cyclical sensitivity. Defensive sectors like staples, utilities, and health care are present but not dominant, so the portfolio will likely participate strongly in growth cycles while still having some ballast when economic sentiment turns more cautious.
Regions
- North America 66%
- Europe Developed 13%
- Japan 6%
- Asia Developed 5%
- Asia Emerging 5%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
Geographically, about two‑thirds of exposure is in North America, with the rest spread across developed Europe, Japan, other developed Asia, emerging Asia, and smaller weights in Australasia, Latin America, and Africa/Middle East. This is very much in line with global market capitalization, where North America naturally dominates because its companies are so large. That alignment with global standards is positive for diversification and reflects a market‑cap‑weighted philosophy rather than a heavy home bias or a big regional bet. The result is a broad mix of developed and emerging economies, which helps spread political, currency, and regulatory risks across many different regions.
Market capitalization
- Mega-cap 36%
- Large-cap 28%
- Mid-cap 22%
- Small-cap 10%
- Micro-cap 4%
By market cap, the portfolio leans heavily into larger companies: 36% mega‑cap, 28% large‑cap, with meaningful but smaller allocations to mid‑caps (22%), small‑caps (10%), and micro‑caps (4%). This is very similar to a standard total‑market profile, where the biggest firms dominate index weights but smaller companies still add diversification and potential growth. Larger companies often have more stable earnings and easier access to capital, which can dampen volatility somewhat compared with a pure small‑cap approach. The presence of smaller names, though limited in weight, can still provide an extra growth kicker and differentiate performance from a pure mega‑cap portfolio over full cycles.
True holdings
-
AA Apple Inc 2.96%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
NV NVIDIA Corporation 2.78%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
MS Microsoft Corporation 1.98%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AM Amazon.com Inc 1.67%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
ME Meta Platforms Inc. 1.27%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class A 1.23%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
AV Broadcom Inc 1.03%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
GO Alphabet Inc Class C 0.97%
Part of fund(s):- Vanguard Total Stock Market Index Fund ETF Shares
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 0.86%
Part of fund(s):- Vanguard Total International Stock Index Fund ETF Shares
-
TS Tesla Inc 0.77%
Part of fund(s):- LS 1x Tesla Tracker ETP Securities GBP
- Vanguard Total Stock Market Index Fund ETF Shares
- Top 10 total 15.52%
Looking through the ETFs, the largest underlying exposures are familiar mega‑cap names like Apple, NVIDIA, Microsoft, Amazon, and the two Alphabet share classes, along with Meta, Broadcom, Tesla, and Taiwan Semiconductor. These show up via multiple funds, creating some overlap that nudges the portfolio toward the biggest global companies, especially in tech and communication‑related areas. Because only top‑10 ETF holdings are visible, this overlap is likely understated, but it still highlights where hidden concentration can build. The positive angle is that these companies are often very profitable and globally diversified themselves; the tradeoff is that their swings can meaningfully influence overall portfolio behavior.
Factors
Factor exposure shows two notable tilts: value at 60% and low volatility at 62%, both mildly above neutral (50%). Factors are like underlying “personality traits” of the portfolio, such as cheapness (value) or stability (low volatility), that research has linked to long‑term returns. A mild value tilt means a slight preference for stocks trading at lower prices relative to fundamentals, which can help in periods when expensive growth stocks lag. The low volatility tilt suggests a bias toward steadier names, which historically often fall less in downturns, even if they may lag in roaring bull markets. Other factors sit near neutral, signaling a broadly balanced style otherwise.
Risk contribution
-
Vanguard Total Stock Market Index Fund ETF Shares
Weight: 45.00% 46.8% -
American Century ETF Trust
Weight: 30.00% 30.3% -
Vanguard Total International Stock Index Fund ETF Shares
Weight: 25.00% 22.9%
Risk contribution shows how much each holding adds to total volatility, which can differ from simple weights. Here, the US total market ETF contributes about 47% of risk from a 45% weight, the American Century ETF around 30% of risk from a 30% weight, and the international ETF about 23% of risk from a 25% weight. These risk/weight ratios are all very close to 1, meaning no single position is disproportionately amplifying portfolio swings. That alignment is a strong positive: it suggests that position sizes are well calibrated to their inherent volatility, and no fund is secretly driving far more of the ups and downs than its size would imply.
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.
On the risk‑return chart, the current portfolio has a Sharpe ratio of 0.99, with expected return of 16.27% and volatility of 14.36%. The Sharpe ratio measures return per unit of risk, so higher is better. The optimal mix of these same holdings reaches a Sharpe of 1.12, while the minimum‑variance mix is at 1.03, and the report notes the current allocation sits on or very near the efficient frontier. That means, given these three funds, the risk/return tradeoff is already highly efficient. Any tweaks would likely be fine‑tuning rather than dramatic improvements, which is a strong validation of the existing allocation structure and balance.
Dividends
- American Century ETF Trust 2.10%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 3.00%
- Weighted yield (per year) 1.92%
The portfolio’s blended dividend yield is about 1.92%, combining a relatively modest payout from the US total market fund, a higher yield from the international fund, and a mid‑range yield from the American Century ETF. Dividends represent cash distributions from companies’ profits, and even at seemingly low levels, they can materially boost total returns when reinvested over decades. For an equity‑focused, growth‑oriented portfolio, this yield is perfectly normal and aligns well with global norms. It’s enough to provide a meaningful income component, but the real driver of long‑term results here will still be price appreciation rather than very high ongoing cash payouts.
Ongoing product costs
- American Century ETF Trust 0.26%
- 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) 0.10%
The weighted average total expense ratio (TER) is about 0.10%, which is impressively low for a portfolio that mixes index and active strategies. TER is the annual fee charged by the funds, similar to a small percentage “toll” on invested assets. Keeping this toll low is one of the most reliable ways to preserve returns, because every dollar not spent on fees continues compounding for you year after year. Relative to many actively oriented portfolios, these costs are very competitive and strongly support long‑term performance. From a cost perspective, this setup is already in excellent shape, leaving little room for meaningful improvement without sacrificing strategy.
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