Efficient US focused equity core with modest bond ballast and strong low volatility tilt

Report created on May 5, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is built mainly from broad US equity ETFs, with three large “core” funds plus a few satellite ETFs and a modest bond buffer. The biggest position is a total US stock market fund, backed up by an S&P 500 ETF and a Dow Jones ETF, which means a lot of large‑cap US exposure from several angles. Bonds sit in two ETFs covering inflation‑protected and intermediate‑term debt, creating a small but meaningful stabilizer. This structure is simple, easy to understand, and fairly robust. The main takeaway is that most risk and return will be driven by US stocks, while bonds act as shock absorbers rather than a major growth engine.

Growth Info

Over roughly ten years, $1,000 grew to about $3,063, which is a compound annual growth rate (CAGR) of 11.87%. CAGR is like the average speed on a long road trip, smoothing out bumps along the way. This is slightly behind the US market reference but ahead of the global market reference, meaning the portfolio has captured strong returns while keeping up with broader world equities. The worst peak‑to‑trough fall (max drawdown) was about ‑32%, very similar to the benchmarks. That shows the risk level has been typical for a mostly‑equity mix. As always, past performance describes what happened, not what must happen next.

Asset classes Info

  • Stocks
    85%
  • Bonds
    15%

The mix is about 85% stocks and 15% bonds, which lines up well with a balanced‑tilt investor who still prioritizes growth. Stocks are the main engine for long‑term returns but come with bigger swings, while bonds generally move less and can soften equity drawdowns. Compared with a classic 60/40 split, this leans more toward growth, so near‑term volatility and equity risk will feel more prominent. For someone with a long investing horizon and moderate tolerance for ups and downs, this allocation is well‑balanced and aligns closely with global standards for growth‑oriented balanced portfolios. For anyone with shorter‑term cash needs, increasing the bond share could provide extra stability.

Sectors Info

  • Technology
    21%
  • Financials
    17%
  • Industrials
    8%
  • Health Care
    8%
  • Consumer Discretionary
    8%
  • Utilities
    7%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    1%

This breakdown covers the equity portion of your portfolio only.

Sector exposure is broadly diversified, with meaningful allocations to technology, financials, industrials, health care, consumer areas, and a standalone utilities position. Tech and financials are the largest slices, but utilities and insurance add a more defensive flavor compared to a pure broad‑market tracker. Sector diversification matters because different parts of the economy lead or lag at various points in the cycle. For example, utilities and insurance can sometimes hold up better in slower growth or higher‑rate environments, while tech may shine during innovation and low‑rate periods. The portfolio’s sector composition matches benchmark data reasonably closely, which is a strong indicator of healthy diversification without extreme thematic bets.

Regions Info

  • North America
    84%
  • Europe Developed
    1%

This breakdown covers the equity portion of your portfolio only.

Geographically, exposure is overwhelmingly in North America, with only a token allocation beyond that. This creates a strong home‑bias toward the US, which has been very rewarding in recent decades but ties results heavily to a single region’s economic and policy environment. Geographic diversification can help spread risk across different currencies, political systems, and growth drivers. Being light outside North America means less participation if other regions outperform in future cycles, and more vulnerability if US markets stumble. For investors who want returns to track the global economy more broadly, gradually adding non‑US exposure is one way to smooth region‑specific risks while still keeping a US core.

Market capitalization Info

  • Large-cap
    33%
  • Mega-cap
    29%
  • Mid-cap
    18%
  • Small-cap
    3%
  • Micro-cap
    1%

This breakdown covers the equity portion of your portfolio only.

Most of the equity exposure sits in mega‑ and large‑cap companies, with smaller allocations to mid‑, small‑, and micro‑caps. Market capitalization (“market cap”) refers to company size; bigger firms tend to be more stable and widely followed, while smaller ones can be more volatile but sometimes faster growing. This size mix mirrors broad US benchmarks fairly closely, leaning naturally toward large, established businesses. That helps reduce idiosyncratic risk from small, single companies while still capturing some of the small‑cap growth premium through the total‑market fund. The takeaway: the portfolio is size‑diversified, but its behavior will mostly resemble a large‑cap US equity portfolio with a mild small‑cap kicker.

True holdings Info

  • NVIDIA Corporation
    3.80%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Microsoft Corporation
    3.49%
    Part of fund(s):
    • SPDR Dow Jones Industrial Average ETF Trust
    • SPDR S&P 500 ETF Trust
    • Vanguard Intermediate-Term Bond Index Fund ETF Shares
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Apple Inc
    3.48%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Amazon.com Inc
    1.86%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Goldman Sachs Group Inc
    1.84%
    Part of fund(s):
    • SPDR Dow Jones Industrial Average ETF Trust
  • Alphabet Inc Class A
    1.63%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Caterpillar Inc
    1.55%
    Part of fund(s):
    • SPDR Dow Jones Industrial Average ETF Trust
  • Broadcom Inc
    1.39%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Alphabet Inc Class C
    1.29%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Meta Platforms Inc.
    1.25%
    Part of fund(s):
    • SPDR S&P 500 ETF Trust
    • Vanguard Total Stock Market Index Fund ETF Shares
  • Top 10 total 21.57%

This breakdown covers the equity portion of your portfolio only.

Looking through the ETFs, there is notable exposure to a handful of mega‑cap US giants such as NVIDIA, Microsoft, Apple, Amazon, and Alphabet. These companies appear across multiple core funds, so their combined weights add up, creating hidden concentration in a few big names even though everything is held via diversified ETFs. Because only top‑10 holdings are captured, true overlap is likely higher than shown. This is normal in US‑heavy index portfolios and has worked well historically, but it does mean outcomes are more tied to how these leaders perform. The key takeaway: diversification is broad across many stocks, but the biggest global names quietly drive a meaningful slice of returns and risk.

Factors Info

Value
Preference for undervalued stocks
Neutral
Data availability: 100%
Size
Exposure to smaller companies
Neutral
Data availability: 100%
Momentum
Exposure to recently outperforming stocks
Neutral
Data availability: 100%
Quality
Preference for financially healthy companies
Neutral
Data availability: 100%
Yield
Preference for dividend-paying stocks
Neutral
Data availability: 100%
Low Volatility
Preference for stable, lower-risk stocks
High
Data availability: 100%

Factor exposure is quite balanced, sitting near market‑like levels for value, size, momentum, quality, and yield, with one standout: a mild tilt toward low volatility. Factors are like underlying “traits” of stocks that research has linked to long‑term performance patterns, such as cheapness (value) or trend following (momentum). A higher low‑volatility exposure means holdings skew slightly toward stocks that historically have had smoother price moves. This can help cushion downturns a bit and may reduce overall choppiness compared with a pure market‑cap portfolio, without heavily sacrificing growth potential. Overall, the factor profile is well‑balanced across the board, with no aggressive style bets that would make behavior very different from the broad market.

Risk contribution Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Weight: 34.69%
    42.4%
  • SPDR S&P 500 ETF Trust
    Weight: 21.95%
    26.3%
  • SPDR Dow Jones Industrial Average ETF Trust
    Weight: 16.60%
    19.1%
  • iShares U.S. Insurance ETF
    Weight: 6.06%
    6.8%
  • Utilities Select Sector SPDR® Fund
    Weight: 5.86%
    4.8%
  • Top 5 risk contribution 99.3%

Risk contribution shows how much each ETF adds to the portfolio’s overall ups and downs, which can differ from its weight. Here, the three big core equity funds make up about 73% of the weight but contribute nearly 88% of the total risk, with the total‑market ETF alone driving over 42% of risk. That tells you where volatility is really coming from. Bond and defensive sector positions have relatively low risk contribution, even if their weights look meaningful. This pattern is typical for an equity‑heavy portfolio and not a problem in itself. If a smoother ride were desired, trimming one of the overlapping core funds could slightly rebalance where the bulk of risk lives.

Redundant positions Info

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

Correlation measures how often assets move together; a value of 1.0 means they’ve moved almost identically. The total US market ETF and the S&P 500 ETF show a perfect historical correlation here, which is expected because their holdings overlap heavily. Holding both still adds some diversification through mid‑ and small‑caps in the total‑market fund, but the incremental difference is modest compared with their shared large‑cap core. Highly correlated positions don’t necessarily hurt performance, but they limit diversification during big market swings. Consolidating very similar exposures can sometimes simplify the portfolio and make it easier to see what truly distinct sources of risk and return are in play.

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.

On the risk‑return chart, the current portfolio sits on or very close to the efficient frontier. The efficient frontier represents the best possible trade‑off between risk (volatility) and expected return using only the existing holdings in different weights. The Sharpe ratio, which compares return to risk, is 0.69 for the current mix versus 0.78 for the mathematically “optimal” one, but the difference in risk and return is small. That means the allocation is already quite efficient for its risk level. Any improvements would come from fine‑tuning weights rather than overhauling holdings, with the main trade‑off being slightly lower risk for nearly the same expected return.

Dividends Info

  • Vanguard Intermediate-Term Bond Index Fund ETF Shares 4.10%
  • SPDR Dow Jones Industrial Average ETF Trust 1.30%
  • iShares U.S. Insurance ETF 2.80%
  • SPDR Portfolio TIPS 4.10%
  • SPDR S&P 500 ETF Trust 0.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Utilities Select Sector SPDR® Fund 2.60%
  • Weighted yield (per year) 1.76%

The overall yield of about 1.76% reflects a growth‑tilted equity portfolio with some income from bonds and defensive sectors. Dividend yield is the annual cash payout as a percentage of price, like the “rent” you earn for owning the asset. Bond ETFs and utilities provide the highest yields here, while broad US equity funds deliver lower but steady dividends. For investors who reinvest payouts, these distributions quietly enhance long‑term compounding. For income‑focused investors, this yield is modest, meaning spending needs would likely require drawing from both dividends and gradual sales. The balance between yield and growth is reasonable for someone prioritizing total return over pure cash flow.

Ongoing product costs Info

  • Vanguard Intermediate-Term Bond Index Fund ETF Shares 0.04%
  • SPDR Dow Jones Industrial Average ETF Trust 0.16%
  • iShares U.S. Insurance ETF 0.40%
  • SPDR Portfolio TIPS 0.12%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Utilities Select Sector SPDR® Fund 0.09%
  • Weighted costs total (per year) 0.10%

Costs are impressively low, with a weighted total expense ratio (TER) around 0.10%. TER is the annual fee charged by each fund, taken out behind the scenes. Over long periods, even small differences in costs can compound significantly, so keeping fees down is one of the most reliable ways to support better net returns. This allocation is well‑balanced and aligns closely with global standards for cost efficiency, especially given the mix of broad market and sector ETFs. There’s no glaring fee drag here; any future tweaks would be more about simplifying overlapping positions than chasing cheaper products. Overall, the cost structure is a clear strength of this setup.

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