A globally focused portfolio with a strong emphasis on stocks and low diversification

Report created on Aug 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards global equities, with 85% in the Vanguard Total World Stock Index Fund ETF Shares and 15% in the Vanguard S&P 500 ETF. This composition suggests a strong belief in the stock market's growth potential but also indicates a lack of diversification across asset classes, as stocks represent 99% of the portfolio. The minimal cash holding (1%) offers little buffer against market volatility.

Growth Info

Historically, the portfolio has performed well, with a Compound Annual Growth Rate (CAGR) of 11.72%. However, the maximum drawdown of -34.16% signals significant volatility during market downturns. The days contributing most to returns are relatively few, highlighting the portfolio's reliance on short-term gains. This performance pattern underscores the importance of understanding market cycles and the potential impact of volatility on investments.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median increase suggesting a potential 413.5% growth. Such projections, while optimistic, are based on historical data and should be approached with caution. These simulations offer a glimpse into possible future scenarios but cannot guarantee specific outcomes due to the unpredictable nature of markets.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's almost exclusive focus on stocks, with a minor allocation to cash, limits its ability to hedge against stock market downturns. Diversifying across different asset classes, such as bonds or real estate, could provide more stability and reduce overall risk.

Sectors Info

  • Technology
    27%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    3%

Sector allocation is heavily weighted towards technology and financial services, which can offer high growth but also come with increased volatility. The underrepresentation of traditionally defensive sectors like utilities and consumer staples may exacerbate the portfolio's risk during economic downturns.

Regions Info

  • North America
    15%

With a significant portion of assets in North America and no exposure to developed markets in Europe or Asia, the portfolio misses out on potential opportunities and diversification benefits offered by these regions. Expanding geographic exposure could reduce risk and tap into growth in different economies.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    32%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The focus on mega and large-cap stocks provides a foundation of stability and potential for growth. However, the limited exposure to small and micro-cap stocks restricts opportunities for higher returns that these riskier investments can offer, albeit with increased volatility.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares indicates redundancy. This overlap does not contribute to diversification, as both funds share significant exposure to similar stocks, particularly in the technology sector.

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.

Optimizing the portfolio involves addressing the high correlation between holdings. Reducing overlap can enhance diversification benefits. Considering the Efficient Frontier, reallocating assets to achieve a more optimal risk-return profile could significantly improve the portfolio's performance, especially by introducing non-correlated assets.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.62%

The dividend yields from the two ETFs contribute to the portfolio's total income, offering a modest cushion against price volatility. However, the overall yield of 1.62% suggests that income generation is not a primary goal of this portfolio, focusing instead on capital appreciation.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.06%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.06%. This efficiency supports better long-term performance by minimizing the drag on returns caused by fees. Keeping costs low is a fundamental principle of successful investing, particularly important in a low-diversification strategy.

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