A balanced portfolio with strong US focus and moderate dividend income potential

Report created on Dec 20, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists primarily of ETFs, with a significant 42% allocation to the Vanguard S&P 500 ETF. This is complemented by a 30% allocation to the Vanguard Total International Stock Index Fund ETF, which provides international exposure. The Schwab U.S. Dividend Equity ETF and Vanguard Extended Market Index Fund ETF Shares each hold 14%. This composition reflects a balanced approach, aligning with common benchmarks for diversified portfolios. To ensure alignment with your investment goals, consider the balance between domestic and international exposure, as well as the emphasis on dividend income.

Growth Info

Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 10.91%, indicating robust performance over time. The maximum drawdown of -34.72% highlights potential risk during market downturns. Comparing this to standard benchmarks, the portfolio's performance is commendable, though the drawdown suggests possible volatility. It's important to remember that past performance does not guarantee future results. Regularly reviewing performance against benchmarks can help ensure the portfolio remains on track to meet your financial objectives.

Projection Info

Forward projections using Monte Carlo simulations, which model potential future outcomes based on historical data, indicate a 50th percentile return of 274.1%. This suggests a favorable outlook, though it's essential to recognize the limitations of such simulations, as they cannot predict future market conditions with certainty. The simulations show a high probability of positive returns, with 967 out of 1,000 simulations yielding gains. This provides a degree of confidence in the portfolio's ability to achieve its targets, but regular reassessment is advised to adapt to changing market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% of assets in this class. This concentration can provide strong growth potential but also increases exposure to market volatility. Compared to benchmark norms, this allocation is aggressive and may benefit from diversification into other asset classes like bonds or real estate. A more balanced asset allocation could help mitigate risk and provide stability during market fluctuations. Consider whether this high equity exposure aligns with your risk tolerance and long-term investment goals.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    12%
  • Health Care
    11%
  • Consumer Discretionary
    11%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    5%
  • Basic Materials
    4%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation is diverse, with technology leading at 22%, followed by financial services and industrials. This distribution mirrors common benchmarks, suggesting a well-rounded approach. However, the tech-heavy weighting may result in higher volatility, especially during periods of interest rate changes. Diversifying further into less volatile sectors like utilities or consumer defensives could stabilize returns. Regularly reviewing sector performance and trends can help optimize this balance, ensuring it aligns with your risk tolerance and market expectations.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio's geographic allocation is predominantly in North America at 71.8%, with Europe and Asia providing additional exposure. This aligns closely with common benchmarks, offering a strong foundation in developed markets. However, the limited exposure to emerging markets may restrict growth potential and diversification benefits. Consider increasing allocations to underrepresented regions to enhance diversification and capture growth opportunities. Evaluating geographic risk factors, such as political and economic stability, is crucial for informed decision-making.

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 potentially be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on current assets. This involves adjusting allocations to achieve a more efficient portfolio. While this doesn't necessarily mean adding new assets, it can enhance returns for a given level of risk. Regularly reassessing the portfolio's position on the Efficient Frontier can ensure it remains aligned with your risk tolerance and financial goals. This approach focuses on maximizing returns without increasing risk.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.70%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Extended Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 1.60%
  • Weighted yield (per year) 1.70%

The portfolio's overall dividend yield is 1.7%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.7%. This provides a steady income stream, appealing to investors seeking regular cash flow. Dividend income can be reinvested to compound growth over time. However, it's important to balance dividend yield with growth potential, as high-yielding stocks may not always offer significant capital appreciation. Regularly reviewing dividend policies and yields can help maintain an optimal balance between income and growth.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Extended Market Index Fund ETF Shares 0.06%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, supporting better long-term performance by minimizing costs. This aligns with best practices for cost-effective investing. Low fees enhance net returns, making a significant impact over time. Continuously monitoring expense ratios and seeking lower-cost alternatives can further improve cost efficiency. Consider whether any high-fee assets can be replaced with lower-cost options without sacrificing diversification or growth potential.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey