Balanced Diversified Portfolio with Strong Historical Performance and Moderate Risk Suitable for Long-Term Growth

Report created on Dec 5, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed of five ETFs, with a significant portion allocated to the Vanguard S&P 500 ETF, making up 35% of the total. This allocation indicates a strong focus on large-cap U.S. equities. The inclusion of the Vanguard Total International Stock Index Fund ETF Shares at 25% provides international diversification. The Schwab U.S. Dividend Equity ETF and Avantis® U.S. Small Cap Value ETF add a focus on dividends and small-cap value stocks, respectively. The Invesco NASDAQ 100 ETF rounds out the portfolio with exposure to tech-heavy growth stocks. This composition reflects a balanced approach with a mix of growth, value, and international exposure.

Growth Info

Historically, the portfolio has performed well, boasting a compound annual growth rate (CAGR) of 14.46%. This suggests a strong performance compared to typical market benchmarks. However, it's important to note the maximum drawdown of -23.47%, indicating that while the portfolio has potential for high returns, it also carries a degree of risk during market downturns. The fact that 90% of returns are concentrated in just 21 days highlights the importance of staying invested over the long term to capture these key periods of growth. This performance history suggests a robust portfolio for those seeking growth over time.

Projection Info

The forward projection using a Monte Carlo simulation, which uses random sampling to predict future outcomes, indicates a promising outlook. Based on 1,000 simulations, the portfolio shows an annualized return of 16.93%. The 5th percentile suggests a 140.46% increase, while the median (50th percentile) projects a 633.69% growth. The 67th percentile shows even more optimistic growth at 877.75%. With 999 out of 1,000 simulations resulting in positive returns, the projections suggest a high probability of continued growth. This highlights the portfolio's potential for long-term investors willing to withstand volatility.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted in stocks, comprising 99.56% of the total assets. This allocation indicates a focus on equities, which are generally more volatile but offer higher potential returns compared to bonds or cash. The minimal cash and other asset allocations suggest limited liquidity and diversification beyond equities. This asset class distribution is suitable for investors with a higher risk tolerance who are seeking capital appreciation. To enhance stability, consider incorporating more fixed-income assets like bonds to balance the equity exposure and reduce overall portfolio volatility.

Sectors Info

  • Technology
    23%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    10%
  • Consumer Staples
    7%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio's sector allocation is well-diversified across various industries, with a notable emphasis on Technology (22.68%), Financial Services (16.66%), and Consumer Cyclicals (11.48%). This diversification across sectors helps mitigate sector-specific risks and capitalize on growth opportunities in different market environments. The presence of defensive sectors like Consumer Defensive and Healthcare further adds stability. However, the relatively low exposure to Utilities and Real Estate might limit defensive characteristics. Consider periodically reviewing sector allocations to ensure they align with market conditions and your investment goals, maintaining a balanced approach.

Regions Info

  • North America
    76%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly focused on North America, which accounts for 76.15% of the allocation. This indicates a strong reliance on the U.S. and Canadian markets. While this focus benefits from the stability and growth potential of these economies, it may limit exposure to opportunities in other regions. The inclusion of Europe Developed (10.11%) and Asia Emerging (4.20%) provides some international diversification. To further enhance geographic balance, consider increasing allocations to underrepresented regions, such as Latin America or Africa/Middle East, to capture growth in emerging markets.

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 optimization chart suggests opportunities to refine the risk-return balance. Investors can move along the efficient frontier to adjust the portfolio's risk profile. For those seeking higher returns with increased risk, shifting towards growth-oriented assets may be beneficial. Conversely, to adopt a more conservative approach, increasing exposure to fixed-income securities can help reduce volatility. Before optimizing, focus on aligning the portfolio with personal risk tolerance and financial goals. Regularly reassess the portfolio's composition to ensure it remains efficient and aligned with changing market conditions and individual objectives.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.04%

The portfolio's average dividend yield stands at 2.04%, with the Schwab U.S. Dividend Equity ETF contributing a notable 3.4%. This indicates a moderate focus on income generation through dividends. The inclusion of dividend-paying ETFs provides a steady income stream, which can be reinvested to enhance overall returns. While dividends contribute to total returns, the portfolio still leans towards growth-oriented investments. For investors seeking higher income, consider increasing exposure to dividend-focused assets. Regularly review dividend yields to ensure they align with income objectives and market conditions.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The portfolio's total expense ratio (TER) is relatively low at 0.08%, indicating cost-efficiency. Low costs are crucial in maximizing net returns over the long term, as high fees can erode gains. The Vanguard S&P 500 ETF and Schwab U.S. Dividend Equity ETF, with expense ratios of 0.03% and 0.06% respectively, contribute to this efficiency. However, the Avantis® U.S. Small Cap Value ETF has a higher cost of 0.25%. Continuously monitor the expense ratios of the ETFs and consider replacing higher-cost options with more cost-effective alternatives to maintain a low-cost portfolio.

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