A balanced portfolio with strong tech focus and moderate geographic diversification

Report created on Dec 29, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is comprised of 60% large-cap U.S. equities, 10% small-cap U.S. equities, 10% bonds, 10% dividend-focused equities, and 10% international equities. This structure offers a good balance between growth and income, aligning with a balanced risk profile. The portfolio's allocation is similar to common benchmarks, with a significant emphasis on U.S. equities. This allocation is well-suited for those seeking moderate growth while maintaining some income stability through dividends and fixed income.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.65%, which is impressive. This indicates strong historical performance compared to typical market benchmarks. However, it also experienced a maximum drawdown of -24.67%, highlighting potential volatility. While past performance is no guarantee of future results, these figures suggest that the portfolio has balanced growth potential with notable risk during downturns. Monitoring market conditions and being prepared for fluctuations is advisable.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, projects a median portfolio growth of 367.63%. This suggests a strong probability of achieving substantial returns, with 992 out of 1,000 simulations showing positive outcomes. However, it's important to note that simulations are not foolproof and depend on historical trends, which may not always repeat. Regularly reviewing and adjusting the portfolio in response to changing market conditions can help optimize future performance.

Asset classes Info

  • Stocks
    90%
  • Bonds
    10%

The portfolio's asset allocation includes approximately 90% in stocks and 10% in bonds, with minimal cash holdings. This allocation is typical for a balanced portfolio, providing a mix of growth and stability. The high stock allocation aligns with the goal of capital appreciation, while the bond component offers some risk mitigation. Compared to benchmarks, this allocation is well-balanced, though increasing bond exposure could further reduce volatility for more conservative investors.

Sectors Info

  • Technology
    28%
  • Consumer Discretionary
    11%
  • Financials
    11%
  • Telecommunications
    9%
  • Industrials
    8%
  • Health Care
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    1%
  • Real Estate
    1%

The portfolio has a significant concentration in technology (28.19%), followed by consumer cyclicals and financial services. This tech-heavy allocation aligns with current growth trends but may lead to higher volatility, especially during interest rate hikes. The sectoral balance is generally in line with market benchmarks, providing a diversified exposure across various industries. However, monitoring sector performance and considering adjustments if significant imbalances occur could enhance diversification and stability.

Regions Info

  • North America
    80%
  • Europe Developed
    4%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

Geographic exposure is heavily weighted towards North America (79.68%), with limited exposure to other regions. This concentration offers stability but may miss opportunities in emerging markets. Diversifying further into Europe, Asia, and other regions could enhance growth potential and reduce regional risk. Comparing this to global benchmarks, the portfolio is under-diversified geographically, suggesting room for improvement in capturing international growth opportunities.

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 can be optimized using the Efficient Frontier, which suggests the best risk-return trade-off based on current assets. This optimization focuses on reallocating existing assets to achieve the most efficient balance, rather than seeking new investments. By adjusting the weights between stocks and bonds, the portfolio could potentially achieve a better risk-adjusted return. Regularly revisiting this optimization can ensure alignment with changing market dynamics and personal investment goals.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.30%
  • Weighted yield (per year) 1.76%

The portfolio's total dividend yield is 1.76%, with notable contributions from bond and dividend-focused ETFs. Dividends provide a steady income stream, which is beneficial for income-focused investors. This yield aligns well with a balanced portfolio strategy, offering a mix of growth and income. Regularly reviewing dividend yields and considering reinvestment options can enhance long-term compounding benefits, especially in a low-interest-rate environment.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.10%

The total expense ratio (TER) of the portfolio is 0.1%, which is impressively low. This cost efficiency supports better long-term returns, as lower fees mean more of your money remains invested. Compared to industry averages, this TER is competitive, making it a cost-effective choice for investors. Continuously evaluating and minimizing costs where possible can further enhance net returns, contributing to overall portfolio efficiency.

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