Balanced portfolio with strong focus on large caps and global exposure

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio is best suited for an investor with a balanced risk tolerance seeking growth and income. The heavy allocation to equities, both domestic and international, indicates a comfort with market volatility in exchange for the potential for higher returns. The inclusion of small-cap and emerging market exposures suggests an appetite for exploring growth opportunities beyond stable, large-cap companies. Ideal for those with a medium to long-term investment horizon, this portfolio aims to capitalize on global economic growth while providing a steady income through dividends.

Positions

  • AQR LARGE CAP MULTI-STYLE FUND CLASS I
    QCELX - US00203H5110
    50.00%
  • SPDR S&P World ex US
    SPDW - US78463X8891
    30.00%
  • FIDELITY SMALL CAP VALUE FUND FIDELITY SMALL CAP VALUE FUND
    FCPVX - US3163898329
    10.00%
  • SPDR® Portfolio Emerging Markets ETF
    SPEM - US78463X5095
    10.00%

This portfolio is structured around a 50% allocation in a large-cap multi-style fund, complemented by a 30% investment in a global (excluding US) ETF, 10% in a small-cap value fund, and 10% in an emerging markets ETF. Such a composition demonstrates a strategic balance between domestic large-cap exposure and international diversification. The emphasis on large caps suggests a preference for stability and growth potential from established companies, while the allocations to small-cap and emerging markets introduce elements of growth and diversification, albeit with higher volatility.

Growth Info

Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 12.56%, with a maximum drawdown of -35.77%. These figures indicate a robust performance over time, with the potential for significant volatility, as evidenced by the drawdown. The days contributing to 90% of returns being concentrated in a relatively small number suggest that performance has been driven by a few significant positive movements, a common characteristic in equity-focused portfolios.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a significant increase in value. However, the broad spread between the 5th and 67th percentiles underscores the inherent uncertainty in such forecasts. This method, while useful for understanding potential volatility and outcomes, relies on historical data, which is not a guaranteed predictor of future performance. Thus, while these projections are encouraging, they should be viewed as one of many tools in decision-making.

Asset classes Info

  • Stocks
    97%
  • Other
    2%
  • Cash
    0%
  • Bonds
    0%
  • No data
    0%

The portfolio's asset class allocation is heavily weighted towards stocks (97%), with a minimal presence in other asset classes. This high equity exposure aligns with the portfolio's balanced risk profile but leans more towards growth, considering the potential for higher returns and corresponding higher risk associated with stock investments. The absence of bond investments suggests a tolerance for short-term volatility in pursuit of long-term gains.

Sectors Info

  • Technology
    24%
  • Financials
    22%
  • Industrials
    15%
  • Telecommunications
    8%
  • Consumer Discretionary
    6%
  • Health Care
    6%
  • Consumer Staples
    5%
  • Consumer Discretionary
    4%
  • Basic Materials
    3%
  • Energy
    2%
  • Utilities
    2%
  • Real Estate
    2%

Sectoral allocation is led by technology and financial services, which together constitute nearly half of the portfolio. This concentration in sectors known for growth and volatility could influence the portfolio's performance, especially in market conditions favoring these industries. However, the presence of industrials, communication services, and consumer cyclicals provides some balance, spreading risk across different economic cycles.

Regions Info

  • North America
    61%
  • Europe Developed
    15%
  • Japan
    8%
  • Asia Emerging
    6%
  • Asia Developed
    5%
  • Australasia
    2%
  • Latin America
    1%
  • Africa/Middle East
    1%
  • Europe Emerging
    0%

Geographic allocation shows a strong bias towards North America (61%), with significant exposure to developed Europe and a modest presence in emerging Asian markets. This distribution suggests a strategy that balances the stability of developed markets with the growth potential of emerging ones. However, the portfolio might benefit from increased exposure to underrepresented regions to enhance global diversification and potentially capture growth in other emerging markets.

Market capitalization Info

  • Mega-cap
    31%
  • Large-cap
    21%
  • Small-cap
    18%
  • Mid-cap
    17%
  • Micro-cap
    4%

The market capitalization breakdown reveals a diversified exposure across mega, big, medium, small, and micro caps. This spread across different market caps can help mitigate risk and exploit growth opportunities in various segments of the market. However, the dominance of mega and big caps aligns with the portfolio's balanced risk profile, as these companies typically offer more stability than their smaller counterparts.

Dividends Info

  • FIDELITY SMALL CAP VALUE FUND FIDELITY SMALL CAP VALUE FUND 16.10%
  • AQR LARGE CAP MULTI-STYLE FUND CLASS I 20.50%
  • SPDR S&P World ex US 2.60%
  • SPDR® Portfolio Emerging Markets ETF 2.40%
  • Weighted yield (per year) 12.88%

The portfolio's dividend yield is notably high, driven primarily by the large-cap fund and the small-cap value fund. This yield contributes significantly to the portfolio's total return, providing a steady income stream in addition to capital appreciation. For investors seeking both growth and income, this portfolio offers an attractive blend, though the high yield also reflects the higher risk associated with these investments.

Ongoing product costs Info

  • FIDELITY SMALL CAP VALUE FUND FIDELITY SMALL CAP VALUE FUND 0.97%
  • AQR LARGE CAP MULTI-STYLE FUND CLASS I 0.41%
  • SPDR S&P World ex US 0.03%
  • SPDR® Portfolio Emerging Markets ETF 0.07%
  • Weighted costs total (per year) 0.32%

Portfolio costs, as measured by the Total Expense Ratio (TER), are relatively low, averaging 0.32%. This efficiency is crucial for long-term growth, as lower costs directly translate to higher net returns. The portfolio's cost structure benefits from the low TER of the ETFs, though the small-cap fund's higher fees warrant monitoring to ensure they remain justified by performance.

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.

The portfolio's current allocation suggests a well-thought-out strategy for balancing risk and return, as implied by its positioning on the Efficient Frontier. This optimization concept indicates that the portfolio is designed to achieve the highest possible return for a given level of risk. However, continuous review and adjustment may be necessary to maintain this optimal balance, especially in response to changing market conditions and investment goals.

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