Balanced portfolio with a focus on stocks and developed markets exposure

Report created on Aug 3, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is structured with a 50% allocation to a broad stock market ETF, 25% to investment-grade corporate bonds, and 25% to developed international markets. This composition reflects a balanced approach, leaning towards growth with a significant portion in equities but tempered by the stability of high-quality bonds. The diversification is moderate, covering a wide range of sectors and geographies, though it's primarily focused on developed markets with a notable lack of exposure to emerging markets and alternative asset classes.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.75%, with a maximum drawdown of -29.81%. These figures suggest a resilient performance, particularly in light of the drawdown, which indicates the portfolio's ability to recover from market downturns. The days contributing most to returns highlight the importance of staying invested over the long term, as missing these key days can significantly impact overall performance.

Projection Info

Monte Carlo simulations, which use historical data to project a range of possible future outcomes, suggest a median annualized return of 8.57% for this portfolio. While past performance is not indicative of future results, these simulations offer a broad sense of potential future performance. The wide range of outcomes underscores the importance of risk tolerance and the need for a long-term investment horizon.

Asset classes Info

  • Stocks
    74%
  • Bonds
    25%
  • Cash
    1%

The portfolio's asset allocation is 74% in stocks, 25% in bonds, and a nominal amount in cash, aligning with a balanced investment strategy. This allocation supports growth through equities while using bonds to mitigate volatility and provide income. Comparatively, this mix is in line with a moderate risk profile, aiming to strike a balance between growth potential and risk management.

Sectors Info

  • Technology
    18%
  • Financials
    13%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is diversified across technology, financial services, industrials, and consumer cyclicals, among others. The technology sector's prominence is consistent with its significant role in the global economy, though it may introduce volatility. The portfolio's sector spread aligns with a balanced approach, aiming to capture growth in various economic conditions while mitigating sector-specific risks.

Regions Info

  • North America
    53%
  • Europe Developed
    13%
  • Japan
    5%
  • Asia Developed
    2%
  • Australasia
    2%

Geographic exposure is predominantly in North America (53%) and developed markets in Europe (13%) and Japan (5%), reflecting a conservative approach to international diversification. This focus on developed markets may reduce exposure to the volatility of emerging markets but could also limit potential higher growth opportunities available in those regions.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    23%
  • Mid-cap
    14%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega (32%) and large-cap (23%) companies, which are typically more stable and less volatile than their smaller counterparts. This emphasis on larger companies is appropriate for a balanced strategy, seeking growth with a mindful approach to risk.

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 current allocation appears to be near the Efficient Frontier, suggesting it is already optimized for the best possible risk-return ratio based on historical data. However, it's important to remember that the Efficient Frontier is a theoretical concept based on past performance, which does not guarantee future results. Regular reviews and adjustments are necessary to maintain alignment with investment goals and risk tolerance.

Dividends Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 4.10%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 2.30%

The portfolio's dividend yield averages 2.30%, contributing to its total return. Dividends provide a steady income stream, which is particularly valuable in volatile or declining markets. For a balanced portfolio, this yield strikes a reasonable balance between income and growth, aligning with the objectives of moderate-risk investors.

Ongoing product costs Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 0.14%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.06%

The overall portfolio cost, represented by the Total Expense Ratio (TER), is impressively low at 0.06%. Lower costs translate directly into higher net returns over time, making this portfolio's cost efficiency a significant advantage. It's a strong reminder of the importance of keeping investment costs in check to maximize long-term growth.

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