Balanced Broadly Diversified Portfolio with Emphasis on Global Stock Market Exposure and Moderate Risk

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 investors who prefer simplicity and broad market exposure with moderate risk. They likely have a long-term horizon and seek global diversification without managing multiple funds. These investors are comfortable with stock market volatility and prioritize growth over income. They value low costs and efficient market exposure, aligning with a balanced risk tolerance. Such investors are usually patient and committed to staying the course, understanding the importance of riding out market fluctuations for potential long-term gains.

Positions

  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    100.00%

The portfolio is entirely composed of the Vanguard Total World Stock Index Fund ETF, which provides broad exposure to global equities. This single ETF strategy simplifies the investment structure and ensures diversification across various sectors and regions. The ETF is a popular choice for investors seeking a straightforward approach to global diversification. While the simplicity of one fund is appealing, it might lack the customization that a multi-fund portfolio can offer. It’s important for investors to consider whether this aligns with their personal investment goals and risk tolerance.

Growth Info

Historically, the portfolio has demonstrated a solid compound annual growth rate (CAGR) of 10.45%. This performance indicates a strong return over time, albeit with a maximum drawdown of -34.25%, highlighting potential volatility. Understanding these figures helps investors gauge the risk-return profile of their investments. The portfolio's performance suggests resilience and growth potential, but investors must be prepared for periods of significant downturns. To optimize future returns, it may be beneficial to periodically review the portfolio's performance against personal financial goals and market conditions.

Projection Info

Using a Monte Carlo simulation with 1,000 simulations, the portfolio's future performance was projected. This method provides a range of possible outcomes by simulating various scenarios. The results indicate a 50th percentile return of 267.15%, suggesting a favorable outlook if market conditions remain stable. However, the 5th percentile shows a lower return of 26.52%, underscoring the importance of understanding potential risks. Investors should use these projections to evaluate whether the portfolio aligns with their long-term financial objectives and risk appetite.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio is heavily weighted towards stocks, with a minor allocation to cash and other assets. This stock-centric approach can offer substantial growth opportunities, but it also introduces higher volatility. Investors should be aware that this asset class allocation may not provide the stability or income that bonds or other assets might offer. For those seeking to balance risk and return, considering a more diverse asset class allocation could be beneficial. However, the current allocation aligns with the goal of achieving long-term capital appreciation.

Sectors Info

  • Technology
    24%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    11%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

The sector allocation within the portfolio is well-diversified, with significant exposure to technology, financial services, and industrials. This diversification helps mitigate sector-specific risks and can enhance overall portfolio stability. However, the high allocation to technology may increase exposure to sector volatility. Investors should be mindful of sector trends and consider rebalancing if any single sector becomes disproportionately large. A balanced sector allocation can help achieve a more stable and resilient portfolio over time.

Regions Info

  • North America
    65%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly focused on North America, with additional exposure to Europe, Asia, and other regions. This distribution provides a good mix of developed and emerging markets, offering growth potential and stability. While the heavy North American weighting aligns with many investors' preferences, it may limit exposure to opportunities in other regions. Investors should periodically review geographic allocations to ensure alignment with their global economic outlook and investment objectives.

Dividends Info

  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 1.80%

The portfolio's dividend yield stands at 1.8%, providing a modest income stream for investors. Dividends can play a crucial role in total returns, especially in low-growth environments. While the yield is not particularly high, it contributes to the overall return of the portfolio. Investors seeking higher income may consider diversifying into other dividend-paying assets. However, for those focused on growth, the current yield is a reasonable complement to capital appreciation.

Ongoing product costs Info

  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

The portfolio's cost is minimal, with a total expense ratio (TER) of 0.07%. Low costs are a significant advantage, as they help maximize net returns over time. Keeping investment costs low is a fundamental principle for successful investing. This portfolio's cost structure aligns well with the goal of efficient wealth accumulation. Investors should continue to monitor costs and seek opportunities to minimize expenses further, ensuring that more of their money is working towards their financial goals.

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