Balanced and broadly diversified portfolio with a strong emphasis on US and developed markets

Report created on Jul 20, 2025

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 heavily weighted towards ETFs that focus on large-cap, international equity, and dividend-paying stocks, with a minor allocation to small-cap stocks. The 45% allocation to U.S. large-cap ETFs underscores a preference for stability and growth potential inherent in well-established companies. The 30% international equity exposure suggests a strategic diversification beyond domestic markets, aiming to capture growth in developed markets. The significant 20% allocation to dividend equity ETFs highlights an emphasis on income generation, while the minimal 5% in small-cap stocks introduces higher growth potential but with added volatility.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.80%, with a maximum drawdown of -34.23%, indicating periods of significant volatility. The days contributing to 90% of returns being concentrated in just 26.0 days points to the impact of short, sharp market movements on overall performance. This historical performance, while strong, underscores the importance of understanding the inherent volatility and the potential for wide fluctuations in portfolio value.

Projection Info

Monte Carlo simulations project a wide range of outcomes for this portfolio, with a median increase of 298.6% in value, suggesting robust growth potential. However, the presence of simulations with both high and low returns underscores the uncertainty inherent in investing. It's crucial to understand that while these projections are based on historical data, they are not guarantees of future performance, and actual results can vary significantly.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is entirely to stocks, with no exposure to bonds, cash, or other asset classes. This allocation strategy is aggressive and geared towards investors with a higher risk tolerance. While stocks have historically provided higher returns compared to bonds or cash, they also come with higher volatility. Investors should consider whether a diversification into other asset classes could provide a more balanced risk-return profile.

Sectors Info

  • Technology
    22%
  • Financials
    16%
  • Industrials
    12%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Consumer Staples
    9%
  • Energy
    7%
  • Telecommunications
    7%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral distribution within this portfolio is well-diversified, covering technology, financial services, industrials, healthcare, and consumer sectors, among others. This broad sectoral coverage helps mitigate sector-specific risks. However, the heavy weighting towards technology and financial services sectors may expose the portfolio to sector-specific volatility. Diversifying further into underrepresented sectors could provide additional stability during market fluctuations.

Regions Info

  • North America
    73%
  • Europe Developed
    16%
  • Japan
    6%
  • Asia Developed
    2%
  • Australasia
    2%

With 73% of assets allocated to North America and significant investments in developed European and Japanese markets, the portfolio is positioned to benefit from the stability and growth of developed economies. However, the lack of exposure to emerging markets and specific regions like Latin America and Africa/Middle East may limit potential growth opportunities in high-growth areas. Considering a small allocation to emerging markets could enhance growth prospects and diversification.

Market capitalization Info

  • Large-cap
    37%
  • Mega-cap
    35%
  • Mid-cap
    20%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's focus on big and mega-cap stocks, constituting 72% of the allocation, aligns with its balanced risk profile, leveraging the stability and lower volatility of large companies. The inclusion of medium, small, and micro-cap stocks, although minimal, introduces growth potential but also adds volatility. A slight adjustment to include more small and medium-cap exposure could enhance growth prospects while maintaining a balanced risk profile.

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 allocation demonstrates a balanced approach to risk and return, potentially near the Efficient Frontier, which represents the optimal balance between risk and return. However, continuous reassessment of the allocation and diversification across asset classes, sectors, and geographies could further optimize the risk-return profile. It's important to note that achieving efficiency is an ongoing process, influenced by changing market conditions and personal financial goals.

Dividends Info

  • Schwab U.S. Small-Cap ETF 1.50%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab International Equity ETF 2.60%
  • Schwab U.S. Large-Cap ETF 1.20%
  • Weighted yield (per year) 2.16%

The dividend yield of 2.16% across the portfolio contributes to total returns, especially from the U.S. Dividend Equity ETF with a yield of 3.80%. This focus on dividend-paying stocks not only provides a steady income stream but also adds a layer of potential stability during market downturns, as dividend-paying companies are often more mature and financially stable.

Ongoing product costs Info

  • Schwab U.S. Small-Cap ETF 0.04%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Equity ETF 0.06%
  • Schwab U.S. Large-Cap ETF 0.03%
  • Weighted costs total (per year) 0.05%

With an overall Total Expense Ratio (TER) of 0.05%, the portfolio benefits from low costs, which can significantly enhance long-term returns. The low expense ratios of the included ETFs are commendable, as lower costs mean more of the investment returns are retained by the investor. Continuously monitoring and minimizing investment costs remains a key strategy for maximizing portfolio growth.

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