A balanced portfolio with high dividend yield and strong North American focus

Report created on Dec 14, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of ETFs, with the Vanguard Total World Stock Index Fund ETF making up 40%. The rest is divided among dividend-focused ETFs, emphasizing income. This structure suggests a focus on both global exposure and dividend income. ETFs provide diversification by pooling various securities, allowing investors to access a broad market segment. It's crucial to regularly review and rebalance the portfolio to maintain the desired allocation and risk level, especially given the high concentration in specific ETFs.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 11.51% with a maximum drawdown of -14.6%. This indicates solid growth with moderate risk over time. However, past performance does not guarantee future results, as market conditions can change. Investors should consider this historical data as a reference point but remain adaptable to shifts in the market. Regularly reviewing performance and adjusting strategies can help align the portfolio with long-term financial goals.

Projection Info

The Monte Carlo simulation, running 1,000 scenarios, projects potential future returns using historical data. It shows a median scenario with a 362.37% return, but it's important to note that simulations are based on past data and assumptions, which may not hold true. The simulation provides a range of possible outcomes, helping investors understand potential risks and rewards. Investors should use these projections as a guide but remain flexible, preparing for a variety of market conditions.

Asset classes Info

  • Stocks
    94%
  • No data
    4%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with 94% allocation, leaving minimal exposure to other asset classes. This concentration can lead to higher volatility, as stocks are generally more susceptible to market swings. Diversifying across different asset classes, such as bonds or real estate, can help mitigate risk and provide more stable returns. Investors should consider adjusting the allocation to include other asset classes, enhancing diversification and reducing potential volatility.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Health Care
    12%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Consumer Staples
    8%
  • Telecommunications
    8%
  • Energy
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is diversified across several sectors, with a significant focus on technology (23.9%) and financial services (14.9%). This concentration may lead to sector-specific risks, especially if these sectors face downturns. Diversifying across more sectors can reduce this risk, providing a buffer against sector-specific volatility. It's advisable to monitor sector allocations regularly and consider rebalancing if any sector becomes overly dominant, ensuring a balanced exposure.

Regions Info

  • North America
    85%
  • Europe Developed
    7%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

With 85% of assets in North America, the portfolio has limited geographic diversification. This concentration can expose investors to regional economic risks, such as policy changes or economic downturns. Expanding geographic exposure can enhance diversification, providing access to different economic cycles and growth opportunities. Investors should consider increasing allocations to underrepresented regions, such as emerging markets, to capture potential growth and reduce regional 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 could be optimized using the Efficient Frontier to achieve a better risk-return ratio. The current portfolio could potentially be adjusted to achieve a higher expected return of 16.54% with the same risk level. This involves reallocating assets to achieve the most efficient balance between risk and return. Investors should consider consulting with a financial advisor to explore optimization strategies, ensuring the portfolio aligns with their risk tolerance and financial goals.

Dividends Info

  • Amplify CWP Enhanced Dividend Income ETF 4.50%
  • JPMorgan Equity Premium Income ETF 7.10%
  • JPMorgan Nasdaq Equity Premium Income ETF 9.30%
  • Schwab U.S. Dividend Equity ETF 2.60%
  • Vanguard Total World Stock Index Fund ETF Shares 1.80%
  • Weighted yield (per year) 4.15%

The portfolio offers a strong dividend yield of 4.15%, primarily from dividend-focused ETFs. This can provide a steady income stream, which is beneficial for income-focused investors. However, high dividend yields can sometimes indicate higher risk. It's important to assess the sustainability of these dividends, ensuring they are supported by strong fundamentals. Regularly reviewing dividend policies and company performance can help maintain a reliable income stream.

Ongoing product costs Info

  • Amplify CWP Enhanced Dividend Income ETF 0.56%
  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.20%

The total expense ratio (TER) of the portfolio is 0.2%, which is relatively low. Lower costs can enhance long-term returns by reducing the drag on performance. However, it's crucial to ensure that low costs do not come at the expense of quality or diversification. Regularly reviewing and comparing costs with similar investment options can help investors ensure they are getting value for their money while keeping expenses in check.

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