Balanced portfolio with strong U.S. focus and moderate dividend yield

Report created on Apr 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio consists of three ETFs and two individual stocks, with a heavy emphasis on U.S. equities. Schwab U.S. Dividend Equity ETF and Vanguard Total World Stock Index Fund each hold 40%, while Invesco NASDAQ 100 ETF accounts for 10%. Berkshire Hathaway and JPMorgan Chase each make up 5%. This composition provides broad diversification across sectors but is heavily weighted towards large-cap U.S. stocks. Balancing these allocations could improve global exposure, especially in emerging markets.

Growth Info

Historically, the portfolio has shown a strong CAGR of 10.28% with a maximum drawdown of -22.72%. This performance suggests a robust return potential but also highlights some vulnerability during downturns. Comparing to benchmarks, this is relatively strong, indicating that the portfolio has effectively captured growth opportunities. However, past performance does not guarantee future results, and maintaining a balance between growth and risk is crucial.

Projection Info

Monte Carlo simulations provide a range of potential future outcomes, utilizing historical data to predict performance. With a 50th percentile projection of 514.5% growth and a 67th percentile of 767.3%, the portfolio shows promising potential. However, it's important to note that these projections are not guarantees. The simulations indicate a high probability of positive returns, but investors should remain aware of the inherent uncertainties in market forecasts.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 99% in equities and 1% in cash. This allocation suggests a strong focus on growth, which can be beneficial for long-term wealth building. However, the lack of fixed income or alternative assets may limit diversification benefits and expose the portfolio to equity market volatility. Considering a small allocation to bonds or other asset classes could help mitigate risk and provide more stability.

Sectors Info

  • Financials
    24%
  • Technology
    19%
  • Health Care
    12%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Consumer Staples
    9%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    2%
  • Utilities
    1%
  • Real Estate
    1%

Sector allocation is diverse, with significant exposure to financial services (24%) and technology (19%). This sector mix aligns with common benchmarks, providing a balanced approach to capturing growth opportunities. However, the concentration in financials and tech could lead to higher volatility, especially during economic shifts or interest rate changes. A more even distribution across sectors may help reduce sector-specific risks and enhance resilience.

Regions Info

  • North America
    86%
  • Europe Developed
    6%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic allocation is predominantly North American at 86%, with limited exposure to other regions. This concentration may limit the portfolio's ability to benefit from global growth opportunities, particularly in emerging markets. Diversifying geographically could reduce regional risks and enhance potential returns. Increasing allocations to Europe, Asia, and other regions may provide better global balance and reduce reliance on U.S. market performance.

Market capitalization Info

  • Large-cap
    43%
  • Mega-cap
    32%
  • Mid-cap
    19%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio is primarily invested in large-cap stocks, with 43% in big caps and 32% in mega caps. This focus on large, established companies offers stability and lower volatility. However, small and mid-cap stocks, which make up only 4% and 19%, respectively, could offer higher growth potential. Increasing exposure to smaller companies might enhance returns, although it may also increase risk.

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 risk-return profile could be optimized using the Efficient Frontier, potentially increasing expected returns to 20.74% with a risk level of 17.70%. This optimization suggests reallocating existing assets to achieve a better balance of risk and return. However, it's essential to recognize that optimization is based on current assets and doesn't guarantee diversification or other specific goals.

Dividends Info

  • JPMorgan Chase & Co 1.70%
  • Invesco NASDAQ 100 ETF 0.70%
  • Schwab U.S. Dividend Equity ETF 4.20%
  • Vanguard Total World Stock Index Fund ETF Shares 2.20%
  • Weighted yield (per year) 2.72%

The portfolio's dividend yield stands at 2.72%, with Schwab U.S. Dividend Equity ETF contributing significantly at 4.20%. Dividends provide a steady income stream, which can be particularly appealing during market downturns. This yield is attractive for investors seeking income alongside capital appreciation. Maintaining a balance between high-yield and growth-oriented assets can optimize income without sacrificing potential growth.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.07%

The portfolio's total expense ratio (TER) is impressively low at 0.07%, which supports better long-term returns by minimizing costs. Low fees are crucial for maximizing net returns over time, as high costs can erode gains. Keeping expenses down is a positive aspect of this portfolio, and continuing to prioritize low-cost investments will enhance overall performance.

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