A growth oriented balanced portfolio with strong large cap tilt and solid global diversification

Report created on Aug 23, 2024

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 very equity heavy, with 90% in stock ETFs and a small cash buffer. The core is a broad US index fund, complemented by a global equity ETF and an international developed markets ETF. For a “balanced” profile, this leans more toward growth than capital protection, but the diversification across multiple broad funds is a big plus. A setup like this works best for someone who can handle market swings. If the ride feels too bumpy, shifting a slice toward lower-volatility assets could smooth things out while keeping the same simple, index-based structure that’s already working well.

Growth Info

Using a simple example, a $10,000 starting amount growing at a 15.87% CAGR (Compound Annual Growth Rate) would roughly double about every five years. That is a very strong historical result and compares favourably with common global equity benchmarks. However, the max drawdown of -28.10% shows that the portfolio can still drop sharply in rough markets. CAGR is useful to understand average long-run growth, but it hides short-term pain. Past performance is not a guarantee, so it helps to mentally prepare for similar or even larger drawdowns and ensure the time horizon is long enough to ride them out.

Projection Info

The Monte Carlo analysis, based on 1,000 simulations, shows a wide range of potential future outcomes. Monte Carlo is basically a stress-test that repeatedly shuffles historical return patterns to estimate what might happen, not what will happen. In the 5th percentile, the portfolio ends around 133.3% of the starting value, while the median lands at 554.5%, suggesting strong upside if markets behave even somewhat like the past. However, all these scenarios rely on historical data and assumptions that can break down. It makes sense to treat these results as a planning tool, not a promise, and to revisit them periodically as conditions change.

Asset classes Info

  • US Equity
    72%
  • Stocks
    8%

The portfolio holds 72% in US equity, 8% in broader global equity, and effectively nothing in bonds or alternative assets. This explains both the high historical growth and the higher drawdowns. Being almost all in stocks can work nicely for long horizons, but it leaves little cushion in market shocks or during personal cash needs. This allocation is well-balanced within equities and aligns closely with global standards for stock exposure, but it’s light on stabilizing assets. Introducing even a modest slice of defensive assets could lower volatility and help support withdrawals without needing to sell equities at bad times.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector exposure is well spread, with technology at 29%, financials at 16%, and a healthy mix across consumer, industrials, communication services, healthcare, and smaller allocations to energy, materials, utilities, and real estate. Your portfolio’s sector composition matches benchmark data, which is a strong indicator of diversification. The tech tilt is typical of modern index funds and has boosted returns in recent years, but it can be sensitive to interest rate changes and shifts in growth expectations. Someone worried about tech-heavy swings could gradually rebalance toward more defensive sectors while still using broad, low-cost funds rather than picking individual industries.

Regions Info

  • North America
    81%
  • Europe Developed
    11%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%
  • Asia Emerging
    1%

Geographically, there’s a clear North American tilt at 81%, with 11% in developed Europe and the rest sprinkled across Japan and other developed and emerging regions. This is very similar to what many global investors hold, and it’s particularly familiar for Canadian investors who like strong US exposure. This allocation is well-balanced and aligns closely with global standards. The trade-off is that returns and risks are heavily tied to North American economic and policy trends. If a more globally even stance is desired, gradually boosting the non‑North American slice can spread risk across different currencies, policy regimes, and growth cycles.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

Market cap exposure is dominated by mega and big companies, with 45% in mega caps, 33% in big caps, 18% in mid caps, and only 3% in small caps. Large companies tend to be more stable, transparent, and widely researched, which often reduces company-specific risk. This tilt is typical for index-based portfolios and has worked well historically. The flip side is less exposure to the sometimes higher growth (and higher risk) of small companies. If desired, a small increase in smaller-cap exposure could add diversification and potential growth, while still keeping most of the portfolio anchored in established, resilient businesses.

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.

From a risk‑return angle, this portfolio sits on the aggressive side of a “balanced” profile, with strong returns but meaningful drawdowns. The Efficient Frontier is a concept that maps out the best possible risk‑return mix you can get from a given set of assets, like finding the sweetest spot between speed and safety. Within these same ETFs, slight tweaks to the weightings could nudge the portfolio closer to that efficient mix, either lowering volatility for a similar return or aiming for higher return with slightly more risk. Efficiency here is strictly about the risk‑return ratio, not about taxes or personal goals.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core MSCI EAFE IMI 0.90%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.66%

The overall dividend yield sits around 0.66%, with individual ETFs between 0.50% and 0.90%. That’s relatively low, but it’s normal for a growth‑oriented equity portfolio dominated by large US and developed-market companies. Dividends can provide a steady income stream, which helps especially in retirement or for regular withdrawals. Here, most of the return is expected to come from price growth rather than income. This setup works well if cash flow needs are low and the focus is long-term compounding. If future spending from the portfolio becomes important, shifting a portion toward higher-yielding but still diversified holdings could support more predictable income.

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