A balanced and highly diversified portfolio with a strong focus on stocks and global exposure
Report created on Jun 13, 2025Risk profile
4/7
Diversification profile
5/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 70.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 20.00% -
BN Vanguard Total Bond Market Index Fund ETF Shares
BND - US9219378356 10.00%
This portfolio primarily consists of three Vanguard ETFs, with a heavy emphasis on the Total Stock Market Index Fund ETF Shares at 70%, followed by the Total International Stock Index Fund ETF Shares at 20%, and a smaller allocation to the Total Bond Market Index Fund ETF Shares at 10%. This composition reflects a balanced approach, leaning towards growth through its substantial equity exposure while maintaining a degree of risk mitigation through bonds. The diversification score of 5 out of 5 underscores its broad market coverage across various sectors and geographies, aligning well with a balanced risk profile.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.16%, with a maximum drawdown of -32.22%. This performance is indicative of a resilient growth trajectory, albeit with significant volatility. The days contributing to 90% of returns being concentrated in just 27.0 days highlight the impact of short-term market movements on the portfolio's performance. This historical data suggests a need for a long-term investment horizon to navigate through market fluctuations effectively.
Projection
Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes for this portfolio. With the 50th percentile at a 152.8% return, it indicates a favorable median scenario. However, the presence of a 5th percentile at -4.3% underscores potential short-term risks. It's important to note that while these simulations offer insights, they cannot guarantee future performance due to the unpredictable nature of markets.
Asset classes
- Stocks 89%
- Bonds 10%
- Cash 1%
The asset class allocation with 89% in stocks and 10% in bonds leans towards a growth-oriented strategy, suitable for investors with a moderate to high-risk tolerance. The minimal cash allocation suggests an efficient use of capital, but it also means liquidity is primarily tied to market movements. Adjusting the bond allocation could offer more cushion against market volatility, depending on risk appetite.
Sectors
- Technology 23%
- Financials 15%
- Health Care 10%
- Consumer Discretionary 9%
- Industrials 9%
- Telecommunications 7%
- Consumer Staples 5%
- Energy 4%
- Basic Materials 3%
- Real Estate 3%
- Utilities 2%
Sector diversification is well-spread, with technology, financial services, and healthcare being the top sectors. This sector allocation mirrors the broader market trends, favoring industries with high growth potential. However, the significant weight in technology could expose the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts. Balancing sector exposure may enhance resilience against such risks.
Regions
- North America 71%
- Europe Developed 8%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
The geographic allocation shows a strong bias towards North America at 71%, with developed Europe and emerging Asia also represented. This distribution underscores a focus on established markets, potentially limiting exposure to high-growth emerging markets. Diversifying further into underrepresented regions could offer additional growth opportunities and hedge against regional downturns.
Market capitalization
- Mega-cap 38%
- Large-cap 27%
- Mid-cap 17%
- Small-cap 5%
- Micro-cap 2%
The market capitalization breakdown with a tilt towards mega and big cap stocks at 65% combined suggests a preference for stability and lower volatility associated with larger companies. However, the relatively smaller allocation to medium, small, and micro caps limits potential high-growth opportunities these segments may offer. A slight adjustment to include more small and medium-sized companies could enhance growth prospects.
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.
Considering the Efficient Frontier, the current allocation suggests a portfolio optimized for a balance between risk and return based on historical data. However, the concept of "efficiency" evolves with market conditions, and ongoing adjustments may be necessary to maintain this balance. Regularly reviewing asset allocation in light of changing market dynamics and personal financial goals is recommended.
Dividends
- Vanguard Total Bond Market Index Fund ETF Shares 3.80%
- Vanguard Total Stock Market Index Fund ETF Shares 1.30%
- Vanguard Total International Stock Index Fund ETF Shares 2.90%
- Weighted yield (per year) 1.87%
The dividend yields from the bond and international stock ETFs contribute to the portfolio's income, with a total yield of 1.87%. While this adds a steady income stream, the focus on growth through stock ETFs means dividends are not the primary return driver. Investors seeking higher income might consider increasing the bond allocation or adding high-dividend-yielding assets.
Ongoing product costs
- Vanguard Total Bond Market Index Fund ETF Shares 0.03%
- 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) 0.03%
The portfolio's total expense ratio (TER) of 0.03% is impressively low, maximizing the potential for net returns. Low costs are crucial for long-term investment success, as they compound over time. This cost efficiency is a strong aspect of the portfolio, aligning with best practices for long-term wealth accumulation.
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