A broadly diversified balanced portfolio with a strong focus on North American equities

Report created on Feb 18, 2025

Risk profile Info

4/7
Balanced
← Less risk More risk →

Diversification profile Info

4/5
Broadly Diversified
← Less diversification More diversification →

Positions

This portfolio is heavily weighted towards equities, with 99% in stocks and 1% in cash. The largest holding is the Vanguard Total Stock Market Index Fund ETF, accounting for 70% of the portfolio. This composition aligns closely with a balanced risk profile, offering broad market exposure. The remaining investments are in international and technology-focused ETFs. Such a structure is beneficial for capturing global market growth while maintaining a U.S.-centric focus. To enhance diversification, consider adding other asset classes like bonds, which can provide stability during market volatility.

Growth Info

The portfolio has shown a robust historical performance with a Compound Annual Growth Rate (CAGR) of 12.99%. This indicates strong growth over time, outperforming many standard benchmarks. However, it also experienced a maximum drawdown of -34.26%, highlighting potential volatility. This performance suggests that while the portfolio can deliver substantial returns, it may be susceptible to significant downturns. Regularly reviewing and rebalancing the portfolio can help manage such risks and maintain alignment with investment goals.

Projection Info

Forward projections using Monte Carlo simulations indicate a promising outlook, with an annualized return of 15.35% across 1,000 simulations. Monte Carlo analysis uses historical data to simulate potential future outcomes, providing a range of possible returns. The portfolio's median projected growth is 485.4%, with most simulations yielding positive returns. However, it's important to note that these projections are based on historical data and assumptions, which may not fully predict future market conditions. Continuously monitoring market trends and adjusting allocations can optimize potential returns.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is predominantly invested in equities, with a 99% allocation. While this offers significant growth potential, it also increases exposure to market volatility. The lack of fixed-income assets like bonds means there is limited protection against downturns. Diversifying into additional asset classes could enhance stability and risk management. For example, incorporating bonds or real assets can help balance the portfolio's risk and return profile, especially during periods of market stress.

Sectors Info

  • Technology
    35%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector-wise, the portfolio is heavily concentrated in technology, comprising 35% of the total allocation. This reflects a strong bet on the tech industry's growth potential. However, such concentration can lead to increased volatility, especially during periods of tech sector underperformance. The remaining sectors are more evenly distributed, providing some diversification. To mitigate sector-specific risks, consider gradually adjusting allocations to achieve a more balanced sectoral exposure.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is heavily skewed towards North American equities, accounting for 81% of the allocation. This provides strong exposure to the U.S. market, which has historically delivered robust returns. However, it limits diversification benefits from other regions. Increasing exposure to emerging markets or underrepresented regions like Latin America or Europe can enhance diversification and potentially capture growth opportunities in different economic cycles.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    18%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio has a diverse market capitalization range, with 42% in mega-cap stocks, 30% in big caps, and smaller allocations in medium, small, and micro caps. This distribution provides a balance between stability and growth potential. Mega and big caps offer stability and lower volatility, while smaller caps can drive growth. Maintaining this balance is beneficial, but periodically reviewing the market cap distribution can ensure alignment with risk preferences and market conditions.

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 portfolio could potentially be optimized using the Efficient Frontier, a concept that seeks the best possible risk-return ratio. Given the current asset mix, slight adjustments in allocations could enhance efficiency. For instance, reducing the tech sector's weight and increasing exposure to bonds or other regions might improve the risk-return balance. However, it's important to note that optimization is based on historical data and assumptions, which may not fully predict future outcomes.

Dividends Info

  • Vanguard Information Technology Index Fund ETF Shares 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.52%

The portfolio's overall dividend yield stands at 1.52%, with the Vanguard Total International Stock Index Fund ETF contributing the highest yield at 3.10%. While not a primary focus, dividends provide a steady income stream that can enhance total returns, especially in volatile markets. For investors seeking income, increasing allocations to higher-yielding sectors or funds could boost dividend income. However, it's crucial to balance yield with growth potential to maintain overall performance.

Ongoing product costs Info

  • Vanguard Information Technology Index Fund ETF Shares 0.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, which is beneficial for long-term performance. Low costs mean more of the portfolio's returns are retained, compounding over time. This cost efficiency aligns well with best practices, ensuring that expenses do not erode returns. Regularly reviewing the TER and considering lower-cost alternatives can further optimize cost efficiency, enhancing net returns over the investment horizon.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey