Balanced and highly diversified portfolio with a focus on global equities and bonds

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio shows a strategic blend of 81% stocks and 18% bonds, with a minor 1% in cash, highlighting a balanced approach towards growth with a cushion of income-generating assets. The significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares and the Vanguard Total International Stock Index Fund ETF Shares underlines a strong preference for diversified equity exposure, both domestic and international. The inclusion of bonds through the iShares iBoxx $ Investment Grade Corporate Bond ETF and the Schwab U.S. TIPS ETF adds a layer of stability, counterbalancing the equity market's volatility.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.73%, with a notable maximum drawdown of -30.43%. These figures suggest a resilient performance across varying market conditions, underpinned by the portfolio's diversified nature. However, it's important to remember that past performance is not indicative of future results, and the portfolio's risk score of 4 out of 7 suggests a moderate level of risk tolerance is required.

Projection Info

Monte Carlo simulations, which use historical data to forecast potential future outcomes, suggest a wide range of possibilities for this portfolio. With 948 out of 1,000 simulations showing positive returns, the median projection of a 164.8% return is promising. However, these projections are based on historical patterns, and actual future performance could vary, especially considering unpredictable market events.

Asset classes Info

  • Stocks
    81%
  • Bonds
    18%
  • Cash
    1%

The portfolio's asset class distribution—predominantly in stocks with a substantial bond holding—facilitates a balanced risk-return profile. This mix supports growth through equities while using bonds to mitigate volatility and provide income. Such a distribution aligns well with a balanced investment strategy, though investors might consider adjusting the ratio based on changing risk tolerance or financial goals.

Sectors Info

  • Technology
    20%
  • Financials
    15%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector-wise, the portfolio is heavily weighted towards Technology and Financial Services, followed by Consumer Cyclicals and Industrials. This sector allocation suggests a tilt towards growth-oriented industries, which could lead to higher volatility but also offers the potential for significant gains. Diversifying across more sectors or rebalancing towards sectors with defensive characteristics could provide additional stability.

Regions Info

  • North America
    48%
  • Asia Emerging
    12%
  • Europe Developed
    8%
  • Asia Developed
    5%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    2%
  • Australasia
    1%

Geographically, the portfolio is well-diversified, with a dominant 48% allocation to North America and significant exposures to Asia Emerging and Europe Developed markets. This global distribution helps in spreading risk and capturing growth across different economies. However, the underrepresentation of regions like Europe Emerging and Australasia might be a missed opportunity for further diversification.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The market capitalization breakdown shows a strong preference for Mega and Big cap stocks, constituting 60% of the portfolio. This emphasis on larger companies, known for their stability and lower volatility, supports the portfolio's balanced risk profile. However, incorporating more Medium, Small, or Micro cap stocks could enhance growth potential and further diversify risks.

Redundant positions Info

  • Vanguard Dividend Appreciation Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation observed between the Vanguard Dividend Appreciation Index Fund ETF Shares and the Vanguard Total Stock Market Index Fund ETF Shares indicates overlapping exposures, which may not contribute significantly to diversification. Reducing such redundancies by reallocating assets could improve the portfolio's overall efficiency and risk management.

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.

Optimizing the portfolio along the Efficient Frontier could further enhance its risk-return profile. This involves adjusting asset allocations to achieve the highest expected return for a given level of risk. The current focus should be on eliminating highly correlated assets that offer limited diversification benefits, thereby potentially increasing the portfolio's efficiency.

Dividends Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 4.40%
  • Schwab U.S. TIPS ETF 3.00%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.80%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.35%

With a total dividend yield of 2.35%, the portfolio offers a modest income stream alongside capital appreciation potential. This yield, stemming from both the equity and bond components, contributes to the portfolio's total return, especially in volatile or bear markets. Regularly reviewing dividend-yielding assets for sustainability and growth prospects is advisable.

Ongoing product costs Info

  • iShares iBoxx $ Investment Grade Corporate Bond ETF 0.14%
  • Schwab U.S. TIPS ETF 0.03%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) of 0.06% is impressively low, enhancing net returns for the investor. Keeping costs minimal is crucial for long-term investment success, as high fees can significantly erode gains. This portfolio exemplifies cost efficiency, which is particularly beneficial in a balanced strategy emphasizing steady growth and income.

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