A balanced approach to global equity with a strong focus on US markets and technology

Report created on Jul 28, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is predominantly invested in the US stock market, with an 80% allocation to the SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES, complemented by a 20% allocation to the SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES. This structure showcases a strong bias towards domestic equities over international ones, reflecting a moderate approach to global diversification. The heavy weighting in a single country's market, particularly the US, suggests a strategy that leans on the historical strength and stability of American companies but may overlook the potential growth opportunities in emerging markets and other developed economies.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.61%, with a maximum drawdown of -34.65%. This performance indicates a resilient portfolio capable of delivering strong returns, albeit with significant volatility. The days contributing to 90% of the returns being concentrated in just 27.0 days highlight the impact of short-term gains on overall performance. Comparing these figures to benchmarks could provide further insight into relative performance, especially in terms of risk-adjusted returns.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of possible future outcomes, suggest a wide dispersion in potential portfolio values. With 982 out of 1,000 simulations predicting positive returns, the portfolio demonstrates a high likelihood of future gains. However, the broad range between the 5th and 67th percentiles indicates substantial uncertainty, underscoring the importance of maintaining a diversified and balanced investment approach to mitigate potential risks.

Asset classes Info

  • Stocks
    99%

The asset class distribution is heavily skewed towards stocks, with a 99% allocation, leaving minimal to no exposure to bonds, cash, or other asset categories. This concentration in equities enhances the portfolio's growth potential but also increases its vulnerability to market volatility. Diversifying across different asset classes could provide a buffer during stock market downturns, potentially smoothing out returns over time.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation reveals a significant emphasis on technology, financial services, and industrials, which together constitute over half of the portfolio. This concentration in sectors that are sensitive to economic cycles may lead to higher volatility. However, it also positions the portfolio to benefit from growth in these dynamic areas. Balancing this with investments in more defensive sectors could reduce risk without significantly compromising potential returns.

Regions Info

  • North America
    80%
  • Europe Developed
    13%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographic exposure is heavily concentrated in North America, with an 80% allocation, while developed Europe and Japan make up a smaller portion of the portfolio. This concentration in developed markets, particularly the US, limits exposure to the volatility of emerging markets but also may cap potential returns from these high-growth regions. Increasing diversification into underrepresented regions could enhance global exposure and potentially offer a better risk-return profile.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a preference for mega and big-cap stocks, which account for 75% of the allocation. This preference suggests a conservative approach, prioritizing stability and liquidity over the higher growth potential of smaller companies. Incorporating a broader mix of medium, small, and micro-cap stocks could provide a more balanced exposure to different market segments, potentially enhancing returns while managing 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.

When considering optimization against the Efficient Frontier, the current allocation suggests there may be room to improve the risk-return ratio by diversifying across additional asset classes and regions. While the portfolio shows a strong preference for growth through US equities, particularly in the technology sector, broadening the investment horizon to include emerging markets, different asset classes, and varying market caps could offer a more favorable balance between risk and return.

Dividends Info

  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 2.70%
  • SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 1.10%
  • Weighted yield (per year) 1.42%

The portfolio's dividend yield stands at 1.42%, with the international fund contributing a higher yield than its US counterpart. This yield contributes to the portfolio's total return, providing a steady income stream in addition to potential capital gains. For investors seeking income, focusing on higher-yielding assets or diversifying into dividend-focused funds could enhance the income component of the portfolio.

Ongoing product costs Info

  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 0.06%
  • SCHWAB TOTAL STOCK MARKET INDEX FUND SELECT SHARES 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low total expense ratios (TERs), averaging 0.04% across its holdings. This cost efficiency is commendable, as lower costs directly translate to higher net returns over time. Investors should continue to prioritize low-cost investments, especially in the context of index funds, where minimizing expenses is key to tracking the benchmark as closely as possible.

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