A balanced portfolio with strong North American focus and moderate exposure to technology

Report created on Jan 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is composed primarily of two ETFs, the iShares Core Equity Portfolio and the Vanguard S&P 500 Index ETF, together making up over 94% of the total. The remaining portion is invested in a Bitcoin ETF. This composition leans heavily towards equities, with a small allocation to cryptocurrency. Such a structure is typical for balanced portfolios, aiming to harness equity growth while managing risk. However, the cryptocurrency allocation introduces additional volatility. Consider maintaining a balance that aligns with your risk tolerance, potentially adjusting the cryptocurrency exposure if it feels too high.

Growth Info

Historically, the portfolio has performed well with a Compound Annual Growth Rate (CAGR) of 14.69%. This indicates strong growth over time, outperforming many traditional benchmarks. However, it also experienced a maximum drawdown of -22.45%, reflecting potential downside risk during market downturns. This volatility is not unusual for equity-focused portfolios. While past performance is not a guarantee of future results, it's a positive indicator. Consider reviewing performance periodically to ensure it aligns with your investment goals and risk tolerance.

Projection Info

Forward projections using Monte Carlo simulations provide a range of potential outcomes based on historical data. With 1,000 simulations, the median (50th percentile) outcome is a 672.16% increase, while the 5th percentile shows a potential loss of -28.9%. This wide range underscores the uncertainty inherent in investing. Monte Carlo analysis helps visualize potential risks and rewards, but remember, these are not predictions. Regularly revisiting your investment strategy can help manage risks as market conditions change.

Asset classes Info

  • US Equity
    69%
  • Stocks
    12%
  • Other
    5%

The portfolio is heavily weighted towards US equities, comprising nearly 69% of the allocation. This concentration can drive growth but also exposes the portfolio to regional economic risks. The remaining assets include a small allocation to other equities and cash. A more diversified asset class mix could reduce risk, potentially including bonds or alternative investments. This diversification can help cushion against market volatility, providing more stable returns over time.

Sectors Info

  • Technology
    25%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation reveals a significant focus on technology, which accounts for over 25% of the portfolio. This concentration can lead to higher returns during tech booms but also increased volatility when the sector faces challenges. Other sectors such as financial services, consumer cyclicals, and industrials provide some balance. To minimize risk, consider evaluating sector weights regularly and diversifying further into underrepresented areas, which can help stabilize returns across different economic cycles.

Regions Info

  • North America
    81%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is predominantly North American, with over 80% exposure. This provides strong alignment with the investor's Canadian region but limits international diversification. European and Asian markets are minimally represented, offering limited exposure to global growth opportunities. Increasing geographic diversification can reduce risk associated with regional downturns and provide access to emerging market growth. Consider gradually increasing allocations to other regions to enhance global exposure.

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 could be optimized using the Efficient Frontier, which is a method to find the best possible risk-return ratio. This involves adjusting the current asset allocation to achieve a more efficient balance. While the current portfolio may be aligned with your risk tolerance, exploring optimization opportunities can potentially enhance returns or reduce risk. Remember, efficiency focuses on the risk-return trade-off, not necessarily diversification or other objectives.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.67%

The portfolio's overall dividend yield is modest at 0.67%, primarily from the Vanguard S&P 500 Index ETF and iShares Core Equity Portfolio. Dividends can provide a steady income stream, which is beneficial for reinvestment or income needs. However, the focus here is more on capital appreciation than income generation. If income is a priority, consider increasing allocations to higher-yielding assets. This adjustment can enhance cash flow without significantly altering the portfolio's growth potential.

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