A balanced and broadly diversified portfolio with a strategic focus on global stocks and dividends

Report created on Aug 11, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is comprised of four ETFs with a clear emphasis on stock investments, showcasing a 100% allocation towards equities. The Vanguard Total Stock Market Index Fund ETF Shares lead the allocation with 40%, followed by the iShares MSCI EAFE ETF at 30%, indicating a substantial commitment to both U.S. and international markets. The remaining 30% is split equally between the Schwab U.S. Dividend Equity ETF and the Schwab U.S. Large-Cap Growth ETF, balancing growth and income generation. This composition suggests a strategic approach to capturing market-wide returns while seeking dividend income and growth potential.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 11.86% and a maximum drawdown of -33.58%, the portfolio has demonstrated robust growth with significant volatility. The days contributing to 90% of returns being limited to 26.0 highlights the impact of short-term gains on overall performance. This historical performance, while impressive, underscores the importance of understanding the inherent market risks and the potential for wide fluctuations in portfolio value.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. With the 50th percentile at a 374.5% return, it suggests a strong median performance. However, the broad spread from the 5th to the 67th percentile indicates substantial uncertainty. These projections, while informative, are inherently speculative and should be considered alongside other planning tools.

Asset classes Info

  • Stocks
    100%

The portfolio’s exclusive investment in stocks, with no allocation to cash or other asset classes, positions it for higher growth potential but also exposes it to greater market volatility. This singular focus on equities is consistent with a higher risk tolerance but lacks the risk mitigation benefits that diversification across different asset classes can provide.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Health Care
    11%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    8%
  • Consumer Staples
    8%
  • Energy
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is well-diversified, covering technology, financial services, healthcare, and industrials as the top sectors. This diversification can help mitigate sector-specific risks, though the heavy weighting in technology (24%) may expose the portfolio to higher volatility associated with tech stocks. Balancing sector exposures can further stabilize returns during sector-specific downturns.

Regions Info

  • North America
    70%
  • Europe Developed
    20%
  • Japan
    6%
  • Australasia
    2%
  • Asia Developed
    1%

Geographic distribution emphasizes North America (70%) and developed European markets (20%), with modest exposure to Japan and Australasia. This developed market focus supports stability and growth potential but limits exposure to emerging markets, which may offer higher growth opportunities. Increasing exposure to underrepresented regions could enhance diversification and capture global growth dynamics.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    35%
  • Mid-cap
    17%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's emphasis on mega (42%) and big (35%) cap stocks aligns with its balanced risk profile, offering stability and potential for growth. However, the limited exposure to small (4%) and micro (1%) cap stocks restricts opportunities for higher returns typically associated with smaller companies. A slight adjustment to include more small and micro-cap exposure could introduce growth potential, albeit with increased risk.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Schwab U.S. Large-Cap Growth ETF
    High correlation

The high correlation between the Vanguard Total Stock Market Index Fund ETF Shares and the Schwab U.S. Large-Cap Growth ETF indicates overlapping investments, which may reduce the portfolio's overall diversification benefits. Identifying and minimizing such overlaps can enhance the portfolio's risk-adjusted returns by ensuring a broader exposure across different investments.

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's current asset allocation suggests an opportunity for optimization by addressing the high correlation between certain assets. By diversifying into less correlated assets, the portfolio can achieve a more efficient risk-return profile, potentially moving closer to the Efficient Frontier. This optimization process involves careful selection to maintain the portfolio's balanced risk profile while enhancing diversification.

Dividends Info

  • iShares MSCI EAFE ETF 1.20%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.52%

The portfolio's average dividend yield of 1.52% contributes to its total return, with the Schwab U.S. Dividend Equity ETF offering a notable yield of 3.90%. This focus on dividend-paying assets can provide a steady income stream, which is particularly valuable in volatile markets. Balancing growth and income-generating investments can offer both capital appreciation and income stability.

Ongoing product costs Info

  • iShares MSCI EAFE ETF 0.33%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.13%

The total expense ratio (TER) of 0.13% is impressively low, maximizing the potential for net returns. This cost efficiency is crucial for long-term growth, as lower costs directly translate to higher investment returns. Maintaining focus on cost-effective investments will continue to support the portfolio's performance over time.

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