Balanced portfolio with global stock focus and strategic positions in bonds, gold, and Bitcoin
Report created on May 10, 2025Risk profile
4/7
Diversification profile
5/5
Positions
-
VT Vanguard Total World Stock Index Fund ETF Shares
VT - US9220427424 80.00% -
SG iShares® 0-3 Month Treasury Bond ETF
SGOV - US46436E7186 10.00% -
IA iShares® Gold Trust Micro
IAUM - US46436F1030 5.00% -
IB iShares Bitcoin Trust
IBIT 5.00%
This portfolio prominently features an 80% allocation to a global stock ETF, aiming for broad market exposure, complemented by 10% in short-term treasury bonds for stability, and 5% each in gold and Bitcoin for diversification and potential hedge against inflation. The heavy weighting towards global equities suggests a growth-oriented strategy, while the inclusion of bonds, gold, and Bitcoin indicates a cautious approach to risk management.
Growth
Historically, this portfolio has demonstrated strong performance with a Compound Annual Growth Rate (CAGR) of 17.72%. The maximum drawdown of -14.41% suggests resilience during market downturns. It's important to note that the days contributing to 90% of returns are relatively few, highlighting the impact of significant market movements on performance. While past success is notable, it's crucial to remember that past performance is not indicative of future results.
Projection
Monte Carlo simulations, which use historical data to forecast potential outcomes, show a wide range of possible future performances for this portfolio. With all simulations indicating positive returns and a median projected increase significantly above the initial investment, there's a strong indication of potential growth. However, it's important to approach these projections with caution as they cannot account for unforeseen market changes.
Asset classes
- Stocks 79%
- Cash 11%
- Other 5%
The allocation across stocks, cash equivalents (through short-term bonds), and alternative investments (gold and Bitcoin) suggests a balanced approach to asset diversification. Stocks provide growth potential, bonds offer stability, and alternatives could hedge against inflation or market volatility. This mix aligns well with a balanced risk profile but may need adjustments based on changing risk tolerance or financial goals.
Sectors
- Technology 19%
- Financials 14%
- Industrials 9%
- Consumer Discretionary 9%
- Health Care 8%
- Telecommunications 6%
- Consumer Staples 5%
- Energy 3%
- Basic Materials 3%
- Real Estate 2%
- Utilities 2%
The sectoral distribution covers technology, financial services, industrials, consumer cyclicals, and healthcare as the top sectors. This spread is reflective of a well-diversified portfolio that captures growth across the economy. However, the heavy weighting towards technology and financial services sectors may increase volatility, as these can be more sensitive to economic cycles.
Regions
- North America 52%
- Europe Developed 12%
- Asia Emerging 5%
- Japan 5%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
Geographically, the portfolio is predominantly invested in North America, with significant exposure to developed Europe and smaller allocations to emerging Asia and Japan. This distribution suggests a focus on stable, developed markets while maintaining some exposure to emerging markets for growth. Investors might consider whether increasing exposure to emerging markets could offer better diversification and potential for higher returns.
Market capitalization
- Mega-cap 34%
- Large-cap 25%
- Mid-cap 15%
- Small-cap 4%
- Micro-cap 1%
The exposure to different market capitalizations, with a focus on mega and large-cap stocks, positions the portfolio towards more established, potentially less volatile companies. Medium, small, and micro-cap stocks, although constituting a smaller portion of the portfolio, offer growth potential but with higher risk. This blend supports a balanced risk-return profile but could be tweaked based on risk appetite.
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 current portfolio's risk-return profile suggests it is already well-optimized, with an efficient frontier analysis indicating a potential to achieve a 5.00% expected return at a similar risk level. This efficiency is crucial for maximizing returns without unnecessarily increasing risk. However, continuous review and adjustment are essential to maintain this optimization over time.
Dividends
- iShares® 0-3 Month Treasury Bond ETF 4.70%
- Vanguard Total World Stock Index Fund ETF Shares 1.90%
- Weighted yield (per year) 1.99%
The dividend yield of the portfolio, primarily driven by the treasury bond ETF and the global stock ETF, contributes to its total return. While not exceptionally high, these yields offer a steady income stream, enhancing the portfolio's appeal for those seeking growth with some income. Investors should consider their income needs and the role of dividends in achieving their financial objectives.
Ongoing product costs
- iShares® Gold Trust Micro 0.09%
- iShares Bitcoin Trust 0.12%
- iShares® 0-3 Month Treasury Bond ETF 0.07%
- Vanguard Total World Stock Index Fund ETF Shares 0.07%
- Weighted costs total (per year) 0.07%
With an overall low cost structure, this portfolio is positioned to maximize returns by minimizing expenses. The individual ETF expense ratios are competitively low, contributing to the portfolio's efficiency. Keeping costs low is a fundamental principle of investing that can significantly impact long-term growth.
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