A growth leaning balanced portfolio with strong North American tilt and solid historical risk adjusted returns

Report created on Aug 23, 2024

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 built almost entirely from broad equity ETFs, with roughly two thirds in a US index fund and the rest split between a global equity ETF and a developed markets ex‑US fund. This creates a simple, rules-based structure that is easy to monitor and rebalance. Compared to many balanced benchmarks that mix stocks and bonds, this setup is more equity heavy, so short‑term swings can be larger. For someone using a “balanced” label, it is worth sanity‑checking time horizon and comfort with volatility. If needed, dialing in more explicit safety assets rather than just cash can smooth the ride without changing the simple three‑fund structure.

Growth Info

Using a hypothetical starting amount of 10,000, the 15.87% compound annual growth rate (CAGR) would have grown it to about 21,800 in five years, or roughly 43,800 in ten years, assuming the same pace. CAGR is like your average speed on a long road trip, smoothing out bumps along the way. A max drawdown of about –28% shows that in rough markets, values can fall sharply even for diversified portfolios. Compared with many balanced benchmarks, return looks strong but the drawdown is more like an equity portfolio. It makes sense to decide in advance how you’d react if the portfolio temporarily dropped by a third.

Projection Info

The Monte Carlo results, which simulate many possible futures using patterns from past data, show a wide range of outcomes but with a strong upside tilt. A median outcome of roughly 584% means 10,000 could hypothetically grow to about 68,000 over the tested horizon, while the cautious 5th percentile at 148% still suggests growth. Monte Carlo is helpful because it highlights that returns are not a straight line and big swings are normal. But it feeds on past data; if markets behave very differently, outcomes can diverge a lot. Treat these results as rough weather forecasts rather than promises and plan contributions and withdrawals with that uncertainty in mind.

Asset classes Info

  • US Equity
    72%
  • Stocks
    8%

The portfolio is overwhelmingly equity, with around 72% labeled US equity and another chunk in broader global equities, plus a negligible cash slice. This stock‑heavy tilt is excellent for long time horizons and wealth building, because equities historically beat safer assets over decades. However, it also means that in sharp downturns, there’s very little natural cushion. Many “balanced” benchmarks would include a meaningful bond or fixed income allocation to tame volatility. If shorter‑term spending goals are on the radar, carving out a clearly defined safety bucket and gradually moving some equity exposure there could help align the mix better with real‑world cash needs and emotional comfort through bear markets.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

Sector exposure is nicely spread across technology, financials, industrials, consumer areas, and others, with no single sector completely dominating, although technology around 29% is clearly the largest slice. This is very much in line with major global equity benchmarks today, which are also tech‑tilted. Tech‑heavy allocations tend to do well during growth phases and low‑rate environments but can be hit harder when interest rates rise or sentiment rotates toward more defensive businesses. The rest of the sectors are meaningfully represented, which is a strong indicator of diversification. Keeping this broad sector spread while avoiding big bets on niche themes helps maintain balance if leadership rotates between growth, value, or defensive sectors over time.

Regions Info

  • North America
    81%
  • Europe Developed
    11%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%
  • Asia Emerging
    1%

Geographically, the portfolio leans heavily on North America at about 81%, with the remainder mainly in developed Europe and Japan, and very small allocations to other regions. This home‑region tilt closely mirrors many global equity benchmarks that are dominated by the US market, which has been a performance leader over the last decade. The flip side is that outcomes are closely tied to one economic bloc and policy environment. For someone wanting more global balance, gradually increasing exposure to under‑represented regions could reduce dependence on any single market. Still, this allocation is well‑balanced and aligns closely with global standards, so there is no urgent need to overhaul unless a stronger diversification tilt is a personal priority.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

The market‑cap mix is dominated by mega and large companies (around 78%), with a moderate slice in mid caps and a small allocation to small caps. This pattern is very similar to core global equity benchmarks, which naturally concentrate in the largest, most established firms. Large and mega caps often bring more stability, deeper liquidity, and stronger balance sheets, which can help during stress periods. Mid and small caps, though more volatile, can contribute extra growth over long horizons. This blend supports a solid core exposure. If someone wanted a bit more return potential and can handle bumpier rides, a modest increase in smaller companies might be considered, but the current structure is already sensible and mainstream.

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.

From a risk‑return angle, this portfolio sits closer to the “growth” side of what many people would call balanced. The Efficient Frontier is a concept that shows, for a given level of risk, the highest return that could have been achieved by mixing the same building blocks differently. Here, any optimization would mainly juggle how much sits in each ETF, not add new products. Slightly shifting toward more diversified global exposure or adding a modest defensive layer could move the portfolio closer to an efficient balance between ups and downs. Efficiency in this sense is about the best trade‑off between risk and reward, not necessarily about maximizing diversification or minimizing volatility outright.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core MSCI EAFE IMI 0.90%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.66%

The overall dividend yield of about 0.66% is relatively low, which is typical for growth‑oriented equity portfolios focused on broad indexes. Dividend yield is like a “cash back” percentage paid out each year, but it’s only one piece of total return. Here, most of the return historically has come from price appreciation rather than income. This suits investors who prioritize long‑term growth over current cash flow and are comfortable reinvesting distributions. For anyone needing more regular income, relying solely on this yield might feel light, so they often pair such a growth core with a separate income‑oriented sleeve, or plan to sell a small, pre‑set portion each year as a “self‑made dividend.”

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