A balanced portfolio prioritizing international diversification with a strong foundation in US equities

Report created on Jun 17, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards international stocks, with an 80% allocation to the Vanguard Total International Stock Index Fund ETF Shares, complemented by a 20% stake in the Vanguard S&P 500 ETF. This composition underscores a strategic emphasis on global diversification while maintaining a foundational exposure to the US equity market. The balance between US and international equities suggests a deliberate approach to capturing growth across developed and emerging markets, leveraging the broad exposure of these ETFs.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.68%, with a maximum drawdown of -34.34%. These figures highlight the portfolio's resilience and potential for recovery following market downturns. The days contributing most significantly to returns indicate that a small number of high-performing days drive a substantial portion of the portfolio's overall growth. This underscores the importance of maintaining a long-term perspective and staying invested through market cycles to capture these critical periods of gain.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of potential outcomes. The median simulation suggests a 259.3% return, with a notable 96% of simulations yielding positive results. However, it's important to remember that these projections are speculative and depend heavily on past market conditions, which may not predict future performance accurately.

Asset classes Info

  • Stocks
    98%
  • Cash
    2%

The portfolio's asset allocation is predominantly in stocks (98%), with a minimal cash holding (2%). This high equity exposure aligns with a balanced risk profile, aiming for growth while accepting moderate volatility. The absence of bonds or alternative investments might limit diversification benefits, particularly in market downturns when non-equity assets could provide a cushion.

Sectors Info

  • Financials
    21%
  • Technology
    17%
  • Industrials
    14%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Basic Materials
    6%
  • Energy
    5%
  • Utilities
    3%
  • Real Estate
    3%

The sectoral allocation covers a broad spectrum, with financial services, technology, and industrials leading. This diversified sector exposure is beneficial, as it spreads risk and potential for return across various economic sectors. However, the significant weighting in technology and financial services, sectors known for their volatility, could influence the portfolio's overall risk profile.

Regions Info

  • Europe Developed
    31%
  • North America
    26%
  • Asia Emerging
    13%
  • Japan
    12%
  • Asia Developed
    8%
  • Australasia
    4%
  • Africa/Middle East
    3%
  • Latin America
    2%
  • Europe Emerging
    1%

Geographic allocation underscores a strong emphasis on developed European markets and a notable presence in North America and emerging Asian markets. This diversified global exposure enhances the portfolio's growth potential by tapping into various economic cycles and market dynamics. However, the relatively lower allocation to emerging markets might limit exposure to high-growth regions.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    31%
  • Mid-cap
    17%
  • Small-cap
    3%

The portfolio's market capitalization breakdown, with a focus on mega and big-cap stocks, suggests a preference for stability and lower volatility associated with larger, established companies. While this can offer a degree of safety during market fluctuations, the underrepresentation of small and micro-cap stocks could mean missing out on higher growth potential these segments may offer.

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 current portfolio's expected return is below the optimal level suggested by Efficient Frontier analysis, which indicates a potential return of 14.01% at a similar risk level. This suggests room for optimization, possibly by adjusting the asset allocation or diversifying further within asset classes to improve the risk-return profile without significantly increasing volatility.

Dividends Info

  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.50%

The dividend yield of the portfolio, averaging 2.50%, contributes to the total return, offering a steady income stream in addition to potential capital gains. This yield, particularly from the international ETF, enhances the portfolio's attractiveness for investors seeking both growth and income.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.05%

With a total expense ratio (TER) of 0.05%, the portfolio benefits from low costs, which is critical for enhancing long-term returns. Lower costs mean more of the portfolio's gross return is retained by the investor, a key factor in compounding growth over time.

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