A cautiously constructed portfolio with a focus on income and moderate diversification

Report created on Sep 10, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio primarily comprises ETFs with a significant tilt towards utilities, bonds, and dividend-paying equities, reflecting a cautious approach to risk. With 22% in a global utilities income ETF and 20% in Canadian aggregate bonds, there's a clear emphasis on generating steady income while attempting to preserve capital. The allocation towards US equity (38%) and other equities (15%) suggests a balanced approach to growth and income. The diversification score indicates a moderate level of variety across asset classes and sectors, though there's room for improvement in geographic distribution and sector coverage.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.96%, with a maximum drawdown of -26.02%. These figures suggest that the portfolio has managed to deliver respectable returns despite its cautious profile. The days that make up 90% of returns being concentrated in just 21 days indicates that timing the market plays a significant role in realizing gains, underscoring the importance of staying invested over attempting to time market entries and exits.

Projection Info

Utilizing Monte Carlo simulations, the portfolio's forward projection shows a wide range of outcomes, with a median increase of 250.9% suggesting potential for substantial growth. However, the presence of a 5th percentile outcome at 43.5% growth indicates there's a non-negligible risk of underperformance. These simulations, while informative, rely on historical data and assumptions that may not fully predict future conditions, emphasizing the need for regular review and adjustment.

Asset classes Info

  • US Equity
    38%
  • Bonds
    20%
  • Stocks
    15%
  • Other
    12%
  • Cash
    1%

The allocation across asset classes with a heavy emphasis on US equity and bonds aligns with the portfolio's cautious risk profile. The presence of "Other" assets and a small allocation to cash provides some liquidity and potential for rebalancing. Expanding into additional asset classes or adjusting the current mix could enhance diversification and potentially reduce volatility while maintaining the portfolio's income-generating focus.

Sectors Info

  • Financials
    11%
  • Utilities
    11%
  • Telecommunications
    10%
  • Technology
    9%
  • Energy
    8%
  • Health Care
    5%
  • Industrials
    4%
  • Consumer Staples
    4%
  • Consumer Discretionary
    3%
  • Basic Materials
    1%

Sector allocations show a concentration in financial services, utilities, and communication services, which are typically considered defensive sectors. This concentration supports the portfolio's cautious stance but may limit growth potential during bull markets. Considering a broader exposure to sectors like technology and healthcare could introduce growth opportunities without significantly altering the risk profile.

Regions Info

  • North America
    53%
  • Europe Developed
    14%
  • Japan
    1%

Geographic exposure is heavily North American-centric, with minimal allocation to other regions. This concentration enhances familiarity but exposes the portfolio to regional economic and political risks. Expanding into developed European markets or Asia could offer diversification benefits and access to growth in different economic cycles.

Market capitalization Info

  • Large-cap
    29%
  • Mega-cap
    20%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's market capitalization exposure leans towards big and mega-cap companies, which is consistent with its income and stability objectives. However, this focus may limit exposure to the higher growth potential of mid and small-cap companies. A slight increase in allocation to medium-cap companies could balance the pursuit of stability with growth opportunities.

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 Efficient Frontier analysis suggests there may be opportunities to optimize the risk-return ratio through reallocation. While the portfolio is cautiously positioned, adjusting allocations among the current assets could enhance returns without significantly increasing risk. This optimization process, however, should be approached with the understanding that it's based on historical data, which is not a guaranteed predictor of future performance.

Dividends Info

  • Harvest Equal Weight Global Utilities Income ETF 5.90%
  • Vanguard Canadian Aggregate Bond 2.50%
  • Vanguard FTSE Canadian High Dividend Yield 3.10%
  • Vanguard U.S. Dividend Appreciation Index ETF 0.90%
  • iShares Core MSCI Global Quality Dividend Index ETF 2.20%
  • iShares MSCI USA Quality Factor Index ETF 0.60%
  • BMO Laddered Preferred Share 3.40%
  • Weighted yield (per year) 2.94%

The portfolio's dividend yield strategy, averaging 2.94%, plays a crucial role in its income generation. High-yielding ETFs like the Harvest Equal Weight Global Utilities Income ETF contribute significantly to this strategy. However, it's important to balance yield with growth potential, as high dividends can sometimes come at the expense of capital appreciation.

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