A highly diversified growth-oriented portfolio with a balanced global equity exposure

Report created on Jan 20, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed predominantly of equity ETFs, with a significant 45% allocation to the Vanguard Total Stock Market Index Fund ETF Shares. The portfolio also includes exposure to developed and emerging markets through Vanguard FTSE ETFs. Notably, it holds a 10% allocation in the Vanguard Extended Duration Treasury Index Fund ETF, providing some bond exposure. This mix aligns well with a growth-oriented strategy, balancing equity growth potential with bond stability. Compared to benchmarks, the portfolio is well-diversified across asset types, which helps manage risk while pursuing growth. Consider maintaining this composition to sustain its growth-focused strategy.

Growth Info

Historically, the portfolio has delivered a strong CAGR of 11.28%, indicating robust growth over time. However, it has also experienced a maximum drawdown of -30.76%, highlighting potential volatility. This performance is comparable to typical growth portfolios which aim for high returns but can face significant market swings. The concentrated days making up 90% of returns suggest that timing plays a crucial role in capturing gains. While past performance doesn't guarantee future results, maintaining a long-term perspective can help navigate these fluctuations effectively.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future outcomes based on historical data, suggest a median return of 129.4% with a 9.37% annualized return. While 832 out of 1,000 simulations show positive returns, the range from -41.4% to 235.2% illustrates potential variability. It's important to remember that these projections are based on historical patterns and can't predict future market conditions with certainty. Staying informed about market trends and regularly reviewing the portfolio can help manage expectations and adapt to changes.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The portfolio's asset allocation is heavily weighted towards stocks at 89%, with a smaller 10% allocation to bonds. This stock-heavy approach aligns with a growth strategy, aiming for higher returns through equity investments. The minimal cash allocation suggests a focus on maximizing invested capital. Compared to benchmark norms, this allocation supports potential growth but may also expose the portfolio to higher volatility. Consider whether this balance aligns with your risk tolerance and investment goals, and adjust the bond allocation if seeking more stability.

Sectors Info

  • Technology
    20%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    7%
  • Telecommunications
    6%
  • Energy
    5%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sectorally, the portfolio is diversified, with a notable 20% in technology and 16% in financial services. This reflects a strategic exposure to sectors with strong growth potential. However, tech-heavy portfolios can experience higher volatility, especially during interest rate hikes. The balanced exposure across consumer cyclicals, industrials, and healthcare provides additional diversification. This sector composition aligns well with benchmark data, supporting a diversified growth strategy. Regularly assess sector trends to ensure continued alignment with market opportunities.

Regions Info

  • North America
    57%
  • Europe Developed
    10%
  • Asia Emerging
    9%
  • Japan
    5%
  • Asia Developed
    4%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%

The portfolio's geographic exposure is primarily focused on North America at 57%, with additional allocations in Europe and Asia. This provides a balanced global perspective, though the emphasis on North America may limit diversification benefits. Compared to common benchmarks, the portfolio's geographic allocation is well-aligned but could be enhanced by increasing exposure to underrepresented regions like Latin America and Africa/Middle East. This could further reduce regional risk and capture growth opportunities in emerging markets.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    23%
  • Mid-cap
    17%
  • Small-cap
    11%
  • Micro-cap
    6%

With 32% in mega-cap stocks and 23% in big-cap stocks, the portfolio leans towards larger, more established companies. This can offer stability and consistent returns. However, the inclusion of small and micro-cap stocks at 11% and 6% respectively, introduces growth potential and diversification. This balanced market cap distribution is beneficial for managing risk while pursuing growth. Review the allocation periodically to ensure it continues to meet your investment objectives and risk tolerance.

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 can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio based on current assets. This involves adjusting allocations to reach an optimal balance between risk and return. While diversification is already strong, exploring optimization can further enhance performance. Keep in mind that this process focuses solely on the current asset mix and doesn't account for external factors. Regularly review and adjust allocations to maintain an efficient portfolio.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 4.70%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 1.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 2.18%

The portfolio offers a respectable total dividend yield of 2.18%, with contributions from various ETFs like the Vanguard FTSE Emerging Markets Index Fund ETF Shares at 3.20%. Dividends provide a steady income stream, which can be particularly appealing for growth investors seeking some income stability. While the focus is on growth, these dividends enhance overall returns and can be reinvested to compound gains. Ensure the dividend yield aligns with your income needs and reinvestment strategy.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 0.06%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.08%

The portfolio boasts impressively low costs, with a total TER of 0.08%. This low cost structure is advantageous for long-term performance, as it minimizes expenses that can erode returns. The Vanguard ETFs, in particular, contribute to this cost efficiency. Keeping costs low is crucial for maximizing net returns over time. Continue monitoring expense ratios and consider cost-effective options when making portfolio adjustments to sustain this advantage.

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