A balanced portfolio with a strong focus on US equities and a strategic gold hedge

Report created on Aug 23, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is predominantly invested in US equities, with a 50% allocation to the Vanguard S&P 500 ETF and a 30% allocation to the Schwab U.S. Dividend Equity ETF, highlighting a strong bias towards large-cap stocks and dividend-paying companies. The remaining 20% is allocated to SPDR® Gold Shares, introducing a non-equity asset class aimed at hedging against market volatility and inflation. This composition suggests a balanced approach, leveraging growth through broad market exposure and income through dividends, while also incorporating a traditional safe haven asset.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 14.05%, with a maximum drawdown of -28.87%. These figures suggest a relatively robust performance, particularly given the balanced risk profile. The days that make up 90% of returns being concentrated in 40.0 days indicates significant returns are achieved during brief periods, emphasizing the importance of staying invested through market cycles to capture these gains.

Projection Info

Using Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. The 50th percentile outcome suggests a potential 451.4% increase, with 997 out of 1,000 simulations generating positive returns. This indicates a high likelihood of favorable outcomes, although it's crucial to remember that these projections are hypothetical and subject to the limitations of using past data to predict future performance.

Asset classes Info

  • Stocks
    80%
  • Other
    20%

The portfolio's asset allocation is divided into 80% stocks and 20% other, primarily gold. This mix underlines a strategy focused on capital growth through equities, supplemented by the diversification and defensive benefits of gold. This allocation is well-suited to a balanced risk tolerance, aiming to capture the upside of stock market investments while mitigating risk through gold's historically inverse relationship with equities.

Sectors Info

  • Technology
    20%
  • Financials
    9%
  • Health Care
    9%
  • Consumer Staples
    9%
  • Consumer Discretionary
    8%
  • Energy
    7%
  • Industrials
    7%
  • Telecommunications
    6%
  • Basic Materials
    1%
  • Utilities
    1%
  • Real Estate
    1%

Sector exposure is diversified across technology, financial services, healthcare, consumer defensive, and other sectors, with technology leading at 20%. This sectoral spread helps in reducing the impact of sector-specific downturns, although the heavy weighting in technology suggests a tilt towards growth-oriented and potentially more volatile investments. Balancing sector exposure can further enhance risk-adjusted returns.

Regions Info

  • North America
    79%

Geographic allocation is heavily skewed towards North America (79%), with no exposure to developed Europe, Asia, or emerging markets. This concentration in the US market can offer significant growth opportunities but also exposes the portfolio to region-specific risks and volatility. Introducing international diversification could reduce risk and potentially tap into growth in other regions.

Market capitalization Info

  • Large-cap
    34%
  • Mega-cap
    23%
  • No data
    20%
  • Mid-cap
    19%
  • Small-cap
    2%

The market capitalization breakdown shows a focus on big (34%) and mega-cap (23%) companies, with a smaller allocation towards medium, small, and unknown caps. This skew towards larger companies is typical for portfolios seeking stable growth and lower volatility, as these firms are generally more resilient in market downturns. However, incorporating a broader range of market caps could enhance diversification and growth potential.

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.

Considering the Efficient Frontier, the portfolio's current allocation appears to balance risk and return effectively, given its balanced risk profile. However, there's always room for optimization, especially by reviewing the potential over-concentration in certain sectors or the heavy reliance on the US market. Adjusting the allocation to introduce more international exposure or varying market caps could move the portfolio closer to the Efficient Frontier, optimizing the risk-return ratio without significantly altering the risk profile.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.70%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.71%

The dividend yield of the portfolio, driven by the Schwab U.S. Dividend Equity ETF (3.70%) and the Vanguard S&P 500 ETF (1.20%), contributes to a total yield of 1.71%. This income component is an essential aspect of the portfolio's total return, offering a steady income stream in addition to potential capital appreciation. For investors seeking both growth and income, maintaining or even enhancing exposure to high-yield assets could be beneficial.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.11%

The portfolio's total expense ratio (TER) of 0.11% is impressively low, which is advantageous for long-term performance as lower costs translate directly into higher net returns. This cost efficiency is particularly noteworthy in the context of a diversified portfolio that includes both equity and gold ETFs. Continuously monitoring and minimizing investment costs remains a key strategy for enhancing portfolio returns.

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