A conservative portfolio balancing high-interest savings and core equity for steady growth

Report created on Jan 16, 2025

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is evenly split between a high-interest savings ETF and a core equity portfolio ETF. Such a structure emphasizes stability by allocating half of the assets to a low-risk, interest-earning ETF. This conservative composition is ideal for those prioritizing capital preservation over aggressive growth. Compared to common benchmarks, this portfolio leans heavily towards safety, sacrificing some growth potential. To enhance potential returns, consider slightly increasing equity exposure while maintaining a conservative stance.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 7.78%, with a maximum drawdown of 15.79%. This means that while it has experienced some declines, the long-term growth has been steady. Compared to benchmarks, this performance aligns well with typical conservative portfolios, which prioritize stability. To maintain this performance, it's crucial to periodically review and adjust asset allocations based on current market conditions and personal financial goals.

Projection Info

Using Monte Carlo simulations, this portfolio's future outcomes were projected, showing a median return of 183.26%. This method uses historical data to estimate potential future performance, acknowledging that past performance doesn't guarantee future results. The simulations indicate a high likelihood of positive returns, supporting the portfolio's conservative nature. For future planning, consider these projections as a guide, but remain flexible to adjust strategies based on changing market dynamics and personal circumstances.

Asset classes Info

  • Cash
    50%
  • US Equity
    24%
  • Stocks
    12%

The portfolio's asset class allocation includes 50.38% in cash and significant holdings in US and global equities. This mix provides a solid foundation for both stability and growth. Compared to benchmarks, the high cash allocation reduces volatility, aligning with conservative investment goals. However, to enhance diversification, consider incorporating more varied asset classes, such as fixed income or alternative investments, which could improve risk-adjusted returns without compromising safety.

Sectors Info

  • Technology
    11%
  • Financials
    10%
  • Industrials
    6%
  • Consumer Discretionary
    5%
  • Health Care
    4%
  • Energy
    3%
  • Telecommunications
    3%
  • Basic Materials
    3%
  • Consumer Staples
    3%
  • Utilities
    1%
  • Real Estate
    1%

Sector-wise, the portfolio is diversified across technology, financial services, and several others, with no single sector dominating. This balance reduces the risk associated with sector-specific downturns. However, the relatively low exposure to certain sectors like utilities and real estate might limit defensive capabilities. To strengthen resilience, consider modestly increasing exposure to traditionally stable sectors, ensuring a well-rounded approach that can weather economic cycles.

Regions Info

  • North America
    36%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is primarily concentrated in North America, with limited exposure to other regions. While this focus can reduce currency risk and leverage familiar markets, it may miss opportunities in emerging markets. Compared to global benchmarks, this allocation is conservative. To enhance global diversification, consider gradually increasing exposure to non-North American markets, balancing potential growth opportunities with the inherent risks of international investments.

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 could benefit from Efficient Frontier optimization, which identifies the best risk-return balance. This involves adjusting the current asset allocation to maximize returns for a given level of risk. While the current setup is conservative, exploring slight adjustments within the existing asset classes could enhance efficiency. This approach doesn't require adding new assets, just optimizing the weights of existing ones to achieve better performance.

Dividends Info

  • CI High Interest Savings ETF 2.80%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 1.85%

The portfolio's dividend yield stands at 1.85%, with contributions from both ETFs. While dividends are not the primary focus here, they do provide a modest income stream, which can be beneficial for conservative investors. Compared to higher-yield portfolios, this yield is modest but aligns with the portfolio's low-risk nature. To enhance income, consider selectively increasing exposure to dividend-focused investments, balancing yield with the portfolio's overall risk profile.

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