A balanced and highly diversified portfolio with a strong focus on stocks and global exposure

Report created on Aug 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is predominantly composed of ETFs, focusing 90% on stocks and 10% on bonds. This allocation suggests a strategy leaning towards growth while maintaining a cushion with fixed-income assets for stability. The significant weight in the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares indicates a strong bias towards U.S. equities, complemented by international exposure through the iShares Core MSCI Emerging Markets ETF and the Schwab International Equity ETF. This blend provides a well-rounded exposure to both developed and emerging markets.

Growth Info

The portfolio has shown a Compound Annual Growth Rate (CAGR) of 11.30%, with a maximum drawdown of -31.42%. These figures highlight a robust performance, albeit with notable volatility. The days contributing to 90% of returns being limited to 28 suggests that the portfolio's gains are concentrated in specific periods, underlining the importance of staying invested during market highs and lows. Comparing this to benchmark indices could further contextualize its performance, especially during downturns.

Projection Info

Monte Carlo simulations, with 1,000 iterations, project a median annualized return of 10.05%, with a wide range of outcomes indicating potential volatility. The 5th percentile at 13.1% and the 67th at 335.3% showcase the variability in potential future returns. While these simulations provide insight, it's crucial to remember they are based on historical data, which is not a guaranteed predictor of future performance. This underscores the importance of regular portfolio reviews to adjust to changing market conditions.

Asset classes Info

  • Stocks
    90%
  • Bonds
    10%

The asset class distribution, with a heavy tilt towards stocks, suits a growth-oriented investment strategy but carries higher volatility. The 10% allocation to bonds offers some income and reduces portfolio volatility, albeit modestly. This mix aligns with a balanced investor profile that can tolerate short-term market fluctuations for long-term gains. Comparing this allocation to traditional balanced portfolios might suggest a slightly aggressive stance, given the high stock concentration.

Sectors Info

  • Technology
    25%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is broad, with technology, financial services, and consumer cyclicals leading. This sector spread is reflective of the current global economic drivers but may expose the portfolio to sector-specific risks, such as regulatory changes in technology or economic cycles affecting consumer spending. Diversifying across a wider range of sectors could mitigate such risks, ensuring more stable returns across various market conditions.

Regions Info

  • North America
    61%
  • Europe Developed
    8%
  • Asia Emerging
    7%
  • Asia Developed
    6%
  • Japan
    3%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Australasia
    1%

Geographically, the portfolio is well-diversified, with a significant allocation to North America and balanced exposure to both developed and emerging markets. This global diversification helps mitigate risks associated with any single region's economic or political instability. However, the slight underrepresentation in regions like Latin America and Africa/Middle East could be an opportunity to further diversify and tap into emerging market growth.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    15%
  • Small-cap
    2%

The market capitalization exposure leans heavily towards mega and big-cap stocks, which are typically less volatile than smaller companies and provide stable returns. However, this focus may limit the portfolio's growth potential, as small and micro-cap stocks often offer higher growth rates. Introducing a modest allocation to smaller caps could enhance growth prospects while adding to overall volatility.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares suggests redundancy, limiting the diversification benefits. Diversification aims to spread risk across uncorrelated assets, and having highly correlated investments doesn't fully capitalize on this principle. Rebalancing to include less correlated assets could enhance portfolio efficiency by reducing risk without significantly sacrificing returns.

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.

Optimizing the portfolio using the Efficient Frontier could further improve the risk-return ratio, particularly by addressing the overlap between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF Shares. This process could identify a more efficient allocation that maximizes returns for a given level of risk, enhancing the portfolio's overall performance.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • iShares Core MSCI Emerging Markets ETF 3.00%
  • Schwab International Equity ETF 2.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.92%

The portfolio's dividend yield stands at 1.92%, with the Vanguard Total Bond Market Index Fund ETF Shares offering the highest yield. While dividends contribute to total returns, the portfolio's focus seems to be more on capital appreciation given the low overall yield. Investors seeking income might consider increasing allocations to higher-yielding assets, though this could alter the portfolio's risk-return profile.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • iShares Core MSCI Emerging Markets ETF 0.09%
  • Schwab International Equity ETF 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) of 0.04% is impressively low, enhancing long-term returns by minimizing cost drag. This efficiency is crucial for maximizing compounding returns over time, especially in a low-yield environment. Keeping costs low is a best practice in portfolio management, and this portfolio exemplifies this principle well.

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