Balanced portfolio with a strong foundation in global stocks and bonds

Report created on Jul 22, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is structured around a core-and-satellite approach, primarily focusing on global equities and fixed income through ETFs. With 50% in a Total Stock Market Index, 30% in an International Stock Index, and 20% in a Total Bond Market Index, it's designed to capture broad market exposure. This allocation is well-balanced, aligning closely with a balanced-risk profile that seeks growth while managing volatility through diversification.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 9.81%, with a maximum drawdown of -29.31%. The days contributing most significantly to returns highlight the portfolio's resilience and ability to recover from downturns. This performance, compared to benchmarks, underscores its robustness in navigating market cycles, suggesting a well-considered risk-return balance.

Projection Info

Forward projections, based on a Monte Carlo simulation, offer a range of potential outcomes, from a 5th percentile of -2.4% to a 67th percentile of 256.0%. These simulations, which draw on historical data to forecast future returns, indicate a high likelihood of positive returns, with 945 out of 1,000 simulations ending in the green. However, it's crucial to remember that these projections are hypothetical and not guaranteed.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%

The portfolio's asset class distribution, with 79% in stocks and 20% in bonds, positions it for growth while providing a cushion against market volatility. This balance is particularly suitable for a balanced-risk investor, offering both the potential for capital appreciation and income generation, with a small cash holding for liquidity.

Sectors Info

  • Technology
    19%
  • Financials
    14%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Basic Materials
    3%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation reveals a strategic emphasis on technology, financial services, and industrials, which are sectors known for their growth potential. However, the concentration in these areas also introduces sector-specific risks, such as regulatory changes or economic cycles impacting these industries more than others. Diversification across sectors can help mitigate these risks.

Regions Info

  • North America
    52%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic exposure is predominantly in North America (52%), with meaningful allocations in developed Europe and emerging Asian markets. This global footprint enhances diversification, reducing the portfolio's vulnerability to regional economic downturns. However, the limited exposure to emerging markets and other regions might mean missed opportunities in high-growth areas.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    25%
  • Mid-cap
    15%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown, with a focus on mega and big-cap stocks, suggests a preference for stability and established earnings power. While this can reduce volatility, incorporating a broader mix of medium, small, and micro-cap stocks could offer higher growth potential, albeit with increased 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.

Regarding risk vs. return optimization, the portfolio appears to be positioned near the Efficient Frontier, indicating an optimal balance between expected returns and risk level. This suggests that, given the current asset allocation, the portfolio is efficiently designed to achieve the best possible risk-return ratio. However, continuous evaluation is necessary to maintain this balance, especially as market conditions change.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 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) 2.20%

The dividend yields, particularly from the bond ETF, contribute to the portfolio's income generation, complementing capital gains for total return. With a total yield of 2.20%, the portfolio offers a reasonable income stream, which is beneficial for investors seeking both growth and income.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • 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) 0.04%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) averaging 0.04%. This efficiency supports better long-term performance, as lower costs mean more of the investment's return is retained by the investor. Cost management is a critical aspect of investment success, and this portfolio exemplifies best practices in this area.

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