This portfolio has only about 4.8 years of historical data, based on the youngest asset in the portfolio. Some metrics, projections, and AI insights may be less reliable and should be interpreted with caution.

Broadly Diversified Growth Portfolio with Strong Historic and Projected Performance

Report created on Jul 31, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed mainly of ETFs, with a significant allocation to the Vanguard S&P 500 ETF at 40%. Other key positions include the Schwab U.S. Dividend Equity ETF and Vanguard Total International Stock Index Fund, both at 15%. The portfolio has a broad diversification across multiple sectors and geographic regions. This composition is relevant as it spreads risk across various assets, reducing the impact of poor performance in any single investment. To enhance this portfolio, it might be beneficial to periodically review the allocations to ensure they align with long-term goals and risk tolerance.

Growth Info

Historically, this portfolio has shown a commendable performance with a CAGR of 13.16%. The maximum drawdown recorded was -34.92%, indicating the potential for significant short-term losses. However, the portfolio's strong long-term growth suggests resilience and a good recovery capability. This historical performance is crucial as it provides a benchmark for future expectations. To maintain this performance level, it’s important to stay invested through market fluctuations and avoid panic selling during downturns.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the forward projection of this portfolio shows promising results. The median (50th percentile) end portfolio value is projected to be 448.62%, with an annualized return of 15.51%. Monte Carlo simulations are useful for understanding potential future outcomes by modeling various scenarios. This projection indicates a high likelihood of positive returns. To capitalize on this, maintaining a disciplined investment strategy and avoiding emotional decisions is key.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted in stocks, accounting for 99.42% of the total allocation. This high equity exposure aligns with the growth objective but also introduces significant volatility. Understanding the asset class distribution is essential as it directly impacts the risk and return profile. To manage risk, consider gradually introducing more fixed-income assets or cash equivalents, especially as the investment horizon shortens or if risk tolerance decreases.

Sectors Info

  • Technology
    20%
  • Financials
    17%
  • Industrials
    12%
  • Health Care
    12%
  • Consumer Discretionary
    11%
  • Consumer Staples
    8%
  • Energy
    7%
  • Telecommunications
    6%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is diversified across several sectors, with the highest allocations in Technology (20.31%), Financial Services (16.57%), and Industrials (11.61%). Sector diversification helps mitigate the impact of sector-specific downturns. This broad sector allocation is beneficial for spreading risk. However, it’s crucial to monitor sector performance and economic trends regularly. Adjusting sector allocations in response to changing market conditions can help optimize returns.

Regions Info

  • North America
    85%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America (85.41%), with smaller allocations in Europe Developed (6.46%) and Japan (2.48%). Geographic diversification helps reduce the risk associated with economic and political instability in any single region. While the current allocation is heavily skewed towards North America, exploring opportunities in other regions could enhance diversification. Regularly reviewing geographic allocations ensures the portfolio remains well-balanced.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 2.10%

The portfolio includes several dividend-focused ETFs, such as the Schwab U.S. Dividend Equity ETF and Vanguard High Dividend Yield Index Fund. These positions contribute to a steady income stream through dividends. Dividend income can provide a cushion during market downturns and contribute to total returns. To maximize the benefits of dividends, consider reinvesting them to compound growth over time. Regularly reviewing dividend yields and payout ratios ensures the portfolio remains aligned with income goals.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.06%

The overall cost of the portfolio is relatively low, with a Total Expense Ratio (TER) of 0.06%. Low costs are advantageous as they enhance net returns over time. Keeping investment costs low is critical for maximizing returns. To maintain a cost-efficient portfolio, regularly review the expense ratios of existing holdings and consider low-cost alternatives if necessary. Avoiding high-cost investments ensures more of the returns are retained.

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