A balanced dividend-focused portfolio with strong North American bias and moderate diversification

Report created on Jan 12, 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 composed entirely of dividend-focused ETFs, each holding a 20% weight. The heavy reliance on ETFs is a common strategy for diversification and income generation. Compared to a typical balanced portfolio, which might include a mix of stocks, bonds, and other assets, this portfolio leans heavily towards equities. While this composition offers potential for growth and income, it might lack the stability that bonds or other fixed-income assets provide. Consider diversifying further by including non-equity asset classes to balance risk and reward.

Growth Info

The portfolio has demonstrated strong historical performance, with a Compound Annual Growth Rate (CAGR) of 14.47%. This performance outpaces many traditional benchmarks, indicating effective asset selection. However, the maximum drawdown of -16.64% suggests exposure to downturns. While past performance is not indicative of future results, it provides insight into how the portfolio might react under similar market conditions. To mitigate potential downturn impacts, consider introducing assets with lower volatility or hedging strategies.

Projection Info

The portfolio's forward projection, based on Monte Carlo simulations, shows a median expected return of 587.54% over the investment horizon. Monte Carlo simulations use historical data to estimate potential future outcomes, but they are not guarantees. The simulations indicate a high likelihood of positive returns, yet the range of outcomes (from 163.98% to 744.98%) highlights inherent uncertainty. Regularly reviewing and adjusting the portfolio can help align it with evolving market conditions and personal financial goals.

Asset classes Info

  • Stocks
    97%
  • No data
    3%

With 96.7% of the portfolio in stocks, the asset class allocation is predominantly equity-focused. This high equity concentration can drive growth but also increases exposure to market volatility. A more balanced allocation might include fixed-income securities or alternative assets to cushion against market swings. By aligning asset class weights with benchmark norms, the portfolio could achieve a more stable risk-return profile, enhancing its resilience during economic downturns.

Sectors Info

  • Consumer Staples
    14%
  • Technology
    14%
  • Industrials
    12%
  • Health Care
    11%
  • Financials
    11%
  • Utilities
    10%
  • Energy
    8%
  • Consumer Discretionary
    7%
  • Real Estate
    6%
  • Telecommunications
    4%
  • Basic Materials
    3%

The portfolio's sector allocation is relatively balanced, with significant exposure to consumer defensive, technology, and industrials sectors. This sectoral spread aligns well with common benchmarks, offering a diverse mix of growth and defensive plays. However, the concentration in certain sectors like consumer defensive and technology may lead to higher volatility during sector-specific downturns. To enhance stability, consider increasing exposure to less represented sectors, which could provide additional diversification benefits.

Regions Info

  • North America
    97%
  • Europe Developed
    2%
  • Japan
    1%

Geographically, the portfolio is heavily concentrated in North America, with 96.94% of assets located there. This strong regional focus can be beneficial given the economic stability and growth potential of North American markets. However, it also exposes the portfolio to regional risks and misses opportunities in emerging markets. Consider diversifying into other regions to capitalize on global growth trends and reduce regional risk, aligning geographic exposure with global benchmarks.

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 has room for optimization along the Efficient Frontier, which aims to maximize returns for a given level of risk. Currently, an optimized portfolio could achieve an expected return of 16.57% with a risk level of 13.45%. This optimization involves adjusting the asset weights to achieve the best possible risk-return ratio. Regularly reassessing asset allocation can help maintain portfolio efficiency, ensuring that it remains aligned with personal risk tolerance and financial goals.

Dividends Info

  • Fidelity® High Dividend ETF 3.00%
  • JPMorgan Equity Premium Income ETF 7.40%
  • Schwab U.S. Dividend Equity ETF 3.70%
  • SPDR® S&P Dividend ETF 2.60%
  • Invesco S&P 500® High Dividend Low Volatility ETF 3.50%
  • Weighted yield (per year) 4.04%

With a total dividend yield of 4.04%, this portfolio generates substantial income, appealing to income-focused investors. Dividends provide a steady cash flow, which can be reinvested or used for living expenses. High dividend yields, as seen in this portfolio, can enhance total returns, especially in low-interest-rate environments. However, it's important to ensure that high yields are sustainable. Regularly reviewing the financial health of underlying companies can help maintain dividend reliability.

Ongoing product costs Info

  • Fidelity® High Dividend ETF 0.15%
  • JPMorgan Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR® S&P Dividend ETF 0.35%
  • Invesco S&P 500® High Dividend Low Volatility ETF 0.30%
  • Weighted costs total (per year) 0.24%

The portfolio's Total Expense Ratio (TER) is 0.24%, which is relatively low and supports better long-term performance through cost efficiency. Lower costs mean more of the portfolio's returns are retained, enhancing compounding effects over time. While the current TER is commendable, periodically reviewing asset fees can uncover opportunities to further reduce costs. Switching to lower-cost alternatives can boost net returns, especially in a long-term investment strategy.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey