A balanced portfolio with strong U.S. focus and moderate diversification potential
Report created on Apr 10, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
SW Schwab S&P 500 Index Fund
SWPPX - US8085098551 44.00% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 22.00% -
AV Avantis® U.S. Equity ETF
AVUS - US0250728856 17.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 17.00%
The portfolio consists of four main equity funds with a significant allocation to the Schwab S&P 500 Index Fund at 44%. The Invesco NASDAQ 100 ETF and Avantis U.S. Equity ETF together make up 39%, while the Vanguard Total International Stock Index Fund ETF Shares adds international exposure at 17%. This composition leans heavily towards U.S. equities, with a minor allocation to international markets. A more balanced allocation could be achieved by increasing the international component, potentially enhancing diversification and reducing U.S.-centric risk.
Growth
Historically, the portfolio has performed well, achieving a Compound Annual Growth Rate (CAGR) of 9.86%. This is a solid return, especially when considering the maximum drawdown of -26.46%, which reflects the largest peak-to-trough decline. Although past performance is no guarantee of future results, this history suggests resilience during market fluctuations. To maintain such performance, consider reviewing asset allocations regularly to ensure alignment with market conditions and investment goals.
Projection
The forward projection using Monte Carlo simulations, which model potential future performance based on historical data, suggests an annualized return of 9.64%. The simulations indicate a 5th percentile end value of -3.5% and a median of 198.3%. While these projections provide a range of possible outcomes, they are not predictions. It's important to remember that these simulations rely on historical data, which may not always reflect future market conditions. Regularly revisiting projections can help align expectations with evolving market realities.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio is heavily weighted towards stocks, comprising 99% of the total assets, with a negligible 1% in cash. This allocation is typical for growth-focused strategies, but it may expose the portfolio to higher volatility during downturns. Diversification across different asset classes, such as bonds or real estate, could stabilize returns by offsetting stock market risks. Consider evaluating the benefits of introducing new asset classes to achieve a more balanced risk-reward profile.
Sectors
- Technology 31%
- Financials 13%
- Telecommunications 10%
- Health Care 9%
- Industrials 8%
- Consumer Discretionary 7%
- Consumer Staples 6%
- Consumer Discretionary 5%
- Energy 4%
- Basic Materials 3%
- Utilities 2%
- Real Estate 2%
The sector allocation shows a significant concentration in technology at 31%, followed by financial services at 13%. While technology has driven strong returns recently, it can be volatile, especially during interest rate hikes. The presence of 11 sectors indicates broad exposure, but consider whether the sector weighting aligns with your risk tolerance and market outlook. Adjusting sector allocations could mitigate risk and enhance performance, particularly if certain sectors are expected to outperform.
Regions
- North America 83%
- Europe Developed 7%
- Asia Emerging 3%
- Japan 3%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
With 83% of the portfolio allocated to North America, there is a strong U.S. focus. The remaining 17% is spread across Europe, Asia, and other regions. While this reflects a common home-country bias, it may limit exposure to growth opportunities in emerging markets. Increasing geographic diversification could reduce reliance on U.S. market performance and capture global growth trends. Assess whether a shift towards more international exposure aligns with your investment objectives.
Market capitalization
- Mega-cap 46%
- Large-cap 32%
- Mid-cap 18%
- Small-cap 3%
- Micro-cap 1%
The portfolio's market capitalization is skewed towards mega-cap stocks at 46%, with big and medium caps making up 32% and 18%, respectively. This concentration in large companies may provide stability but could limit exposure to high-growth opportunities in smaller firms. Balancing market capitalization exposure can enhance diversification and potentially improve returns. Consider whether increasing allocations to small or micro-cap stocks aligns with your risk tolerance and growth objectives.
Redundant positions
-
High correlationAvantis® U.S. Equity ETFSchwab S&P 500 Index Fund
The Schwab S&P 500 Index Fund and Avantis U.S. Equity ETF are highly correlated, meaning they tend to move together. This correlation limits diversification benefits, as both assets may react similarly during market downturns. Reducing exposure to highly correlated assets can improve diversification and risk management. Consider replacing one of these funds with an asset that has a lower correlation to the rest of the portfolio for better balance.
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 portfolio's current configuration can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio for the given assets. This optimization does not mean adding new assets but adjusting current allocations for maximum efficiency. While the portfolio is broadly diversified, fine-tuning the balance between risk and return could enhance performance. Regularly revisiting this optimization process ensures the portfolio remains aligned with evolving market conditions and investment goals.
Dividends
- Avantis® U.S. Equity ETF 1.10%
- Invesco NASDAQ 100 ETF 0.70%
- Schwab S&P 500 Index Fund 1.40%
- Vanguard Total International Stock Index Fund ETF Shares 3.50%
- Weighted yield (per year) 1.55%
The portfolio's dividend yield stands at 1.55%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the highest yield at 3.50%. While dividends can provide steady income, they are a smaller component of the portfolio's total return. For income-focused investors, increasing allocations to higher-yielding assets might be beneficial. Conversely, if growth is the priority, maintaining the current yield may suffice. Evaluate whether dividend income aligns with your investment goals.
Ongoing product costs
- Avantis® U.S. Equity ETF 0.15%
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.07%
With a Total Expense Ratio (TER) of 0.07%, the portfolio is cost-effective, supporting better long-term returns. Low costs are crucial as they compound over time, reducing the drag on performance. This efficient cost structure aligns well with best practices for maximizing net returns. Continue monitoring expense ratios to ensure they remain competitive, as lower costs can significantly enhance portfolio growth over the long term.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey