Balanced portfolio with a strong focus on stocks and minimal bond exposure

Report created on Aug 4, 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 predominantly invested in equities, with a 70% allocation to a broad stock market ETF, 24% in international stocks, 5% in an S&P 500 ETF, and a minimal 1% in bonds. Such a composition suggests a strategy aiming for growth through diversified exposure to both U.S. and international equities. The overlap between the Total Stock Market and S&P 500 ETFs indicates a heavy emphasis on large-cap U.S. stocks, which could affect diversification.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 12.35% and a maximum drawdown of -34.38%, the portfolio has demonstrated resilience and strong growth potential. However, the significant drawdown highlights the risks associated with a heavy equity concentration. The days contributing to 90% of returns being so few underscores the volatility and the importance of staying invested through market cycles.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median increase suggesting substantial growth potential. However, the wide disparity between the 5th and 67th percentiles indicates significant risk. This method, while useful for understanding potential volatility, relies on historical data, which is not a guaranteed predictor of future performance.

Asset classes Info

  • Stocks
    98%
  • Cash
    1%
  • Bonds
    1%

The asset class distribution, with 98% in stocks and only 1% each in bonds and cash, aligns with a growth-oriented strategy but carries higher volatility. This allocation is suitable for investors with a higher risk tolerance and a longer time horizon, as the minimal bond exposure offers limited downside protection during market downturns.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is well-diversified across technology, financial services, industrials, and consumer cyclicals, among others. However, the 27% allocation to technology could expose the portfolio to sector-specific risks, such as regulatory changes or economic shifts affecting tech stocks more than other sectors.

Regions Info

  • North America
    77%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation heavily favors North America (77%), with modest exposure to developed Europe and emerging Asian markets. This concentration in North American equities, while beneficial during periods of strong U.S. market performance, may limit potential gains from emerging markets and other developed regions.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    31%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a strong preference for large-cap (mega and big) companies, which tend to be more stable but might offer lower growth potential compared to smaller companies. Expanding into medium, small, or micro-cap stocks could enhance growth prospects and diversification.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Total Stock Market and S&P 500 ETFs suggests redundancy, as they likely hold many of the same large-cap stocks. Reducing overlap by reallocating from one of these ETFs could improve diversification without significantly altering the portfolio's 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.

Optimization should focus on reducing the overlap between highly correlated assets to enhance diversification benefits. Considering the Efficient Frontier, reallocating investments to reduce redundancy without significantly increasing risk could improve the portfolio's risk-return profile.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.63%

The overall dividend yield of 1.63% contributes to the portfolio's total return, providing a modest income stream in addition to potential capital gains. Given the growth focus, the yield is secondary but offers a cushion during market downturns.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) of 0.03% is impressively low, maximizing the potential for net returns. Keeping costs minimal is crucial for long-term investment success, especially in a low-yield environment.

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