A balanced portfolio with a strong tilt towards US equities and low-cost index funds

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards the Vanguard Total Stock Market Index Fund ETF Shares, making up 82% of the allocation, indicating a significant emphasis on US equities. The inclusion of a government money market fund and bond index funds suggests a cautious approach to risk management, albeit with a minor allocation. The small percentage allocated to international stocks shows limited global exposure. The overall composition aligns with a balanced profile but leans towards equity, suggesting a preference for growth while attempting to mitigate volatility through fixed income securities.

Growth Info

Historically, this portfolio has shown a Compound Annual Growth Rate (CAGR) of 12.00%, with a notable maximum drawdown of -31.66%. These figures suggest that the portfolio has experienced significant growth, albeit with periods of substantial volatility. The days contributing to 90% of returns being concentrated in just 30.0 days indicate that performance peaks are relatively rare but impactful. When comparing to benchmarks, it's important to consider the balance between growth and risk, as higher returns often come with increased volatility.

Projection Info

Monte Carlo simulations, based on historical data, project a wide range of outcomes, from a 5th percentile loss of -3.7% to a 67th percentile gain of 166.7%. This suggests there's a high probability of positive returns, with 940 out of 1,000 simulations ending in the green. However, it's crucial to understand that these projections are not guarantees but rather scenarios that could help in preparing for various market conditions.

Asset classes Info

  • Stocks
    85%
  • No data
    10%
  • Bonds
    4%
  • Cash
    1%

The portfolio's asset class distribution, with 85% in stocks, 4% in bonds, and the remainder in cash and equivalents, underscores a growth-oriented strategy. This allocation is typical for investors with a moderate to high-risk tolerance, aiming for capital appreciation over the long term. The minimal bond and cash holdings serve as a buffer against market downturns but may not significantly dampen volatility due to the high equity concentration.

Sectors Info

  • Technology
    26%
  • Financials
    12%
  • No data
    10%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Industrials
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

Sectoral allocation reveals a heavy tilt towards technology, financial services, and consumer cyclicals, which are sectors known for their growth potential but also for higher volatility. The portfolio's diversification across sectors could help mitigate some risks, but the significant exposure to technology underscores a dependence on the performance of a single sector. Balancing sector exposure could reduce vulnerability to sector-specific downturns.

Regions Info

  • North America
    82%
  • No data
    10%
  • Europe Developed
    2%
  • Asia Emerging
    1%
  • Japan
    1%

Geographic allocation is predominantly in North America (82%), with minimal exposure to developed European markets and emerging Asian economies. This concentration enhances the portfolio's vulnerability to regional economic shifts and misses out on potential growth in emerging markets. Diversifying geographically could reduce risk and tap into growth opportunities outside the US.

Market capitalization Info

  • Mega-cap
    35%
  • Large-cap
    26%
  • Mid-cap
    17%
  • No data
    10%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown, favoring mega and big-cap stocks, suggests a bias towards stability and established companies. While this can offer some protection during market downturns, the limited exposure to small and micro-cap stocks may cap potential for high growth. Adjusting this allocation could introduce more growth potential, albeit with increased volatility.

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's current allocation suggests a strong focus on growth, with a moderate approach to risk management through diversification. Utilizing the Efficient Frontier concept could reveal opportunities to adjust asset allocation for an optimal risk-return balance. However, this would require a careful review of current holdings and possibly diversifying further into different asset classes or regions.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.50%
  • Fidelity® Government Money Market Fund 3.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.60%

Dividend yields across the portfolio contribute to its total return, with the bond and money market funds offering higher yields than the equity components. While dividends are a smaller part of total returns for growth-oriented portfolios, they can provide a steady income stream and help mitigate losses during market downturns. Reinvesting these dividends can also compound growth over time.

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) 0.03%

The portfolio benefits from exceptionally low costs, with a total expense ratio (TER) averaging 0.03%. Low costs are crucial for long-term investment success, as they directly enhance net returns. This cost efficiency is a significant strength, especially given the portfolio's focus on low-cost index funds, which are known for their ability to closely replicate market performance at minimal expense.

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