A balanced portfolio with a strong focus on S&P 500 equities and a gold hedge
Report created on Jul 30, 2025Risk profile
4/7
Diversification profile
1/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 85.70% -
GL SPDR® Gold Shares
GLD - US78463V1070 14.30%
This portfolio is heavily weighted towards the Vanguard S&P 500 ETF, making up 85.7% of the allocation, with the remaining 14.3% in SPDR® Gold Shares. This composition indicates a strong reliance on the performance of the top 500 companies in the U.S. stock market, complemented by an investment in gold as a hedge against market volatility. The diversification is primarily between a broad market equity ETF and a commodity ETF, indicating a single-focused approach rather than a multi-asset or sector-diverse strategy.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.21%, with a maximum drawdown of -30.36%. This performance suggests that while the portfolio has experienced significant growth, it has also faced substantial volatility, as evidenced by the maximum drawdown figure. The days that make up 90% of returns being concentrated in just 36.0 days highlights the impact of short-term, high-gain periods on overall performance.
Projection
Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential future values for this portfolio. With 1,000 simulations, the 50th percentile outcome shows a 444.2% increase, indicating optimistic growth potential. However, the wide range between the 5th and 67th percentiles (95.1% to 613.1%) underscores the uncertainty and risk inherent in these projections. It's important to remember that these simulations are hypothetical and do not guarantee future results.
Asset classes
- Stocks 86%
- Other 14%
The portfolio's asset allocation is predominantly in stocks (86%), with a minor allocation in 'Other' (14%), presumably gold. This allocation underscores the portfolio's aggressive growth strategy, leveraging the potential high returns of equity investments while using gold as a defensive asset to mitigate risk. However, the lack of cash or fixed-income assets limits its ability to buffer against market downturns.
Sectors
- Technology 28%
- Financials 12%
- Consumer Discretionary 9%
- Health Care 8%
- Telecommunications 8%
- Industrials 7%
- Consumer Staples 5%
- Energy 3%
- Utilities 2%
- Real Estate 2%
- Basic Materials 1%
The sectoral allocation within the S&P 500 ETF portion of the portfolio mirrors the index's heavy weighting towards Technology, Financial Services, and Consumer Cyclicals. This sector distribution reflects the current market capitalization trends in the U.S. stock market but also exposes the portfolio to sector-specific risks, such as regulatory changes in technology or economic cycles affecting consumer spending.
Regions
- North America 85%
With 85% of the portfolio allocated to North American assets, specifically U.S. equities, geographic diversification is minimal. This concentration in a single region enhances exposure to country-specific economic and political risks. Expanding into other developed or emerging markets could provide additional diversification benefits and potentially reduce volatility.
Market capitalization
- Mega-cap 40%
- Large-cap 30%
- Mid-cap 15%
- No data 14%
- Small-cap 1%
The market capitalization breakdown shows a preference for larger companies, with 40% in mega-cap and 30% in large-cap stocks. This allocation strategy favors stability and resilience, as larger companies are generally better equipped to weather economic downturns. However, the limited exposure to small and medium-sized companies could mean missing out on higher growth potential these entities might offer.
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, this portfolio might not be fully optimized for the best possible risk-return ratio due to its heavy reliance on a single equity ETF and minimal diversification across asset classes. Adjusting the asset allocation to introduce more asset classes or diversifying within equities across different sectors or geographies could potentially enhance the portfolio's risk-adjusted returns.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Weighted yield (per year) 1.03%
The dividend yield from the Vanguard S&P 500 ETF contributes to the portfolio's total yield of 1.03%, offering a modest income stream in addition to potential capital gains. While not the primary focus of this portfolio, dividends can provide a steady income and help reduce volatility by offering returns even during flat or declining market periods.
Ongoing product costs
- SPDR® Gold Shares 0.40%
- Vanguard S&P 500 ETF 0.03%
- Weighted costs total (per year) 0.08%
The portfolio benefits from low total expense ratios (TER), with the Vanguard S&P 500 ETF at 0.03% and SPDR® Gold Shares at 0.40%, resulting in a combined TER of 0.08%. This low cost structure is advantageous for long-term growth, as lower costs directly translate to higher net returns for the investor.
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