Growth-Oriented Portfolio with High Diversification and Balanced Risk for Long-Term Investors

Report created on Jul 14, 2024

Risk profile Info

5/7
Growth
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Diversification profile Info

5/5
Highly Diversified
← Less diversification More diversification →

Positions

The portfolio is composed of various ETFs and a single common stock, with a focus on equities. Vanguard Total Stock Market Index Fund ETF Shares holds the largest allocation at 45%, followed by Vanguard Total International Stock Index Fund ETF Shares at 20%. This structure indicates a strong preference for broad market exposure, both domestically and internationally. The inclusion of Avantis U.S. Small Cap Value ETF and Vanguard Real Estate Index Fund ETF Shares adds a layer of diversification across different market segments. The portfolio also includes a small allocation to bonds and gold, which can provide some stability during market volatility.

Growth Info

Historically, the portfolio has performed well, boasting a compound annual growth rate (CAGR) of 12.78%. This suggests that the portfolio has been quite successful in capturing market gains over time. However, it's important to note the maximum drawdown of -33.82%, which indicates the potential for significant losses during market downturns. The concentration of returns in just 14 days highlights the importance of staying invested to capture these gains. Overall, the historical performance suggests a robust growth trajectory, albeit with some volatility.

Projection Info

Using a Monte Carlo simulation with 1,000 iterations, the future projection of the portfolio shows a median return of 194.4% and an annualized return of 10.31%. This simulation provides a range of possible outcomes based on historical data, offering insight into potential future performance. The 5th percentile result of -29.58% highlights the risk of loss, while the 67th percentile shows substantial growth potential. With 894 simulations yielding positive returns, the portfolio demonstrates a favorable outlook, though it remains important to consider the inherent uncertainties in market predictions.

Asset classes Info

  • Stocks
    80%
  • Real Estate
    10%
  • Other
    5%
  • Bonds
    5%

The portfolio is diversified across four main asset classes: stocks, real estate, bonds, and gold. Stocks dominate the allocation at approximately 79.6%, reflecting a growth-oriented strategy. Real estate and bonds provide additional diversification, with 10% and 5% allocations, respectively. Gold, at 5%, serves as a hedge against inflation and market volatility. This mix of asset classes suggests a balanced approach aimed at achieving growth while managing risk. Investors should periodically review the allocation to ensure it aligns with their risk tolerance and financial goals.

Sectors Info

  • Technology
    17%
  • Real Estate
    17%
  • Financials
    13%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%

The sector allocation is well-diversified, with technology leading at 17.08%, followed closely by real estate at 16.9% and financial services at 13.08%. This spread across various sectors suggests a comprehensive exposure to different economic segments, reducing reliance on any single industry. The presence of sectors like healthcare, consumer cyclicals, and industrials further enhances diversification. Such a diverse sector allocation can help mitigate risks associated with sector-specific downturns, providing a more stable performance over time. Regularly reviewing sector exposure can ensure alignment with market conditions and personal preferences.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio has a strong focus on North America, making up 71.13% of the allocation. This is complemented by smaller allocations to Europe Developed, Asia Emerging, and Japan, among others. Such a geographic spread offers exposure to various economic environments and growth opportunities. However, the heavy weighting towards North America may increase vulnerability to regional economic downturns. Balancing geographic exposure can help cushion against local market fluctuations and capitalize on global growth trends. Investors should consider their comfort with this concentration and adjust as needed.

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 is well-diversified, suggesting limited immediate optimization opportunities. However, investors can explore the efficient frontier to adjust risk levels. Moving towards a riskier portfolio could involve increasing equity exposure, while a more conservative approach might focus on bonds and other stable assets. While the current allocation aligns with a growth strategy, investors should periodically review their risk appetite and financial goals. Adjustments along the efficient frontier can help tailor the portfolio to evolving personal circumstances, ensuring it remains aligned with long-term objectives.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.50%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.60%
  • Realty Income Corp 5.40%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Weighted yield (per year) 2.16%

The portfolio offers an average dividend yield of 2.16%, providing a modest income stream. Realty Income Corp stands out with a yield of 5.4%, contributing significantly to the overall income. The inclusion of dividend-paying ETFs like Vanguard Total Bond Market Index Fund and Vanguard Real Estate Index Fund further boosts income potential. This yield can be attractive for those seeking regular cash flow, though it remains secondary to the portfolio's growth focus. Investors may choose to reinvest dividends to enhance compound growth or use them as a source of passive income.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • SPDR® Gold Shares 0.40%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is 0.09%, reflecting a cost-efficient structure. Vanguard funds, known for their low fees, dominate the portfolio, ensuring minimal drag on returns. The Avantis U.S. Small Cap Value ETF and SPDR Gold Shares have higher expense ratios, but their small allocations limit their impact on overall costs. Keeping investment costs low is crucial for maximizing long-term returns, and this portfolio achieves that effectively. Investors should continue to monitor fees and consider cost-efficient options to maintain this advantage.

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