Balanced and broadly diversified portfolio with a focus on dividends and global exposure

Report created on Jul 18, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is structured around three major ETFs, focusing on total stock market, U.S. dividend equities, and international stocks, with allocations of 40%, 33%, and 27% respectively. This composition reflects a balanced approach, leaning towards a mix of growth through broad market exposure and income through dividends. The emphasis on ETFs suggests a preference for diversified, cost-effective investments. Comparing this to a benchmark diversified portfolio, the allocation aligns well with best practices for a balanced investor, offering exposure across a wide range of sectors and geographies.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.62%, with a maximum drawdown of -34%. This performance, particularly the CAGR, indicates a strong growth trajectory over time, though the drawdown highlights periods of significant volatility. For a balanced portfolio, these figures suggest resilience in varied market conditions, with the drawdown being an important consideration for risk management. Comparing these metrics against a balanced market benchmark, the portfolio's performance is commendable, especially considering the relatively modest drawdown in the context of its gains.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting a 293.5% return. Such simulations, which use historical data to forecast future performance, illustrate the portfolio's potential for substantial growth while also underscoring the uncertainty inherent in investing. It's crucial to recognize that these projections are not guarantees but tools to help visualize potential future states. This forward-looking perspective is vital for setting realistic expectations and preparing for various market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash reserve (1%). This allocation underscores a strong growth orientation, typical of balanced to moderately aggressive investors. The heavy stock concentration enhances potential returns but also increases volatility and risk. Diversifying across different asset classes, such as bonds or real estate, could offer additional risk mitigation, balancing the growth potential with more stable, albeit possibly lower, returns.

Sectors Info

  • Technology
    20%
  • Financials
    15%
  • Industrials
    12%
  • Health Care
    11%
  • Consumer Staples
    10%
  • Consumer Discretionary
    10%
  • Energy
    9%
  • Telecommunications
    7%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation is well-diversified, covering technology, financial services, industrials, healthcare, and consumer sectors prominently. This diversification helps mitigate sector-specific risks and capitalizes on growth across different parts of the economy. The technology sector's significant weighting (20%) aligns with its growing importance in the global economy, though it may introduce heightened volatility. Balancing sector allocations in line with changing market conditions and future growth prospects can further optimize portfolio performance.

Regions Info

  • North America
    75%
  • Europe Developed
    11%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic distribution emphasizes North America (75%), with meaningful allocations to developed Europe and emerging Asian markets. This global exposure is advantageous for capturing growth across different economic cycles and regions. However, the portfolio might benefit from increased exposure to emerging markets, which can offer higher growth potential despite higher volatility. Balancing geographic exposure can enhance diversification and potentially improve risk-adjusted returns.

Market capitalization Info

  • Large-cap
    40%
  • Mega-cap
    28%
  • Mid-cap
    23%
  • Small-cap
    6%
  • Micro-cap
    1%

The portfolio's exposure across market capitalizations—big (40%), mega (28%), medium (23%), small (6%), and micro (1%)—indicates a balanced approach, leaning towards larger companies known for stability and steady returns. This skew towards larger caps may reduce volatility but also limit potential high-growth opportunities found in smaller companies. Adjusting the balance between large and small/micro-cap stocks could enhance growth prospects while maintaining a manageable level of risk.

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.

Considering the Efficient Frontier, the portfolio appears well-positioned for optimizing the risk-return trade-off based on current allocations. Adjustments within the asset classes and sectors could further refine this balance, potentially moving the portfolio closer to the frontier's optimal curve. However, it's important to remember that optimization is based on historical data, which may not perfectly predict future performance. Regular reviews and adjustments are essential to maintain alignment with investment goals and market conditions.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.49%

The portfolio's dividend yield stands at an average of 2.49%, with the Schwab U.S. Dividend Equity ETF contributing a significant 3.80%. This focus on dividend-yielding investments can provide a steady income stream, enhancing the portfolio's total return, especially in volatile or bear markets. For investors prioritizing income alongside growth, maintaining or slightly adjusting the dividend yield focus can support achieving both objectives.

Ongoing product costs Info

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

The portfolio's total expense ratio (TER) averages to 0.05%, indicating highly cost-efficient investment choices. Lower costs directly translate to higher net returns over time, making cost efficiency a crucial aspect of long-term investment success. The chosen ETFs exemplify this principle, combining broad market exposure with minimal costs. Continuously monitoring and minimizing investment costs remains a key strategy for enhancing portfolio performance.

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