Balanced and diversified portfolio with equal weight in US and emerging markets

Report created on Jul 20, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio strikes a balance between growth and stability by equally dividing its investments between the Vanguard S&P 500 ETF and the Vanguard FTSE Emerging Markets Index Fund ETF Shares. This structure ensures a broad exposure to both developed and emerging markets, aligning with a balanced risk profile. The portfolio's diversification is further highlighted by its spread across various sectors and geographies, with a notable lean towards technology and financial services.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 10.97%, with a significant drawdown of -33.05%. The performance is reflective of its balanced approach, capturing growth in both US and emerging markets. The days contributing most to returns indicate concentrated periods of high returns, emphasizing the importance of staying invested through market cycles.

Projection Info

Using Monte Carlo simulations, the portfolio's future performance is projected with 1,000 scenarios. These projections suggest a wide range of outcomes, with a median annualized return of 11.41%. While simulations offer valuable insights, it's crucial to remember they are based on historical data and assumptions, meaning actual future performance can vary.

Asset classes Info

  • Stocks
    98%
  • Cash
    2%

The portfolio is heavily weighted towards stocks, with a minor cash holding for liquidity. This asset class allocation is typical for balanced portfolios seeking growth while maintaining some flexibility. The predominance of equities is a driving factor behind the portfolio's growth potential and risk profile.

Sectors Info

  • Technology
    26%
  • Financials
    18%
  • Consumer Discretionary
    12%
  • Telecommunications
    9%
  • Industrials
    8%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    3%
  • Real Estate
    2%

The sector allocation reveals a significant emphasis on technology and financial services, followed by consumer cyclicals and communication services. This sector spread is indicative of a growth-oriented strategy but also introduces sector-specific risks, particularly in the volatile tech sector.

Regions Info

  • North America
    50%
  • Asia Emerging
    29%
  • Asia Developed
    10%
  • Africa/Middle East
    5%
  • Latin America
    4%
  • Europe Emerging
    1%
  • Europe Developed
    1%

Geographically, the portfolio is well-diversified, with half of its exposure in North America and significant allocations in Asia Emerging and Developed markets. This global spread helps mitigate risks associated with any single region while capturing growth across different economic cycles.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's emphasis on mega and big-cap stocks provides stability and reduces volatility, which is suitable for balanced investors. However, the relatively small allocation to small and micro-caps limits exposure to high-growth potential sectors, which could enhance 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.

The portfolio's current expected return is below the optimal level suggested by the Efficient Frontier analysis, which indicates a potential for achieving a higher return at the same risk level. This suggests room for optimization, possibly by adjusting asset allocation or diversifying further within asset classes.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.95%

The dividend yields from both ETFs contribute to the portfolio's total yield of 1.95%, providing a steady income stream. This yield is a significant component of total returns, especially in volatile or flat market conditions, and supports the portfolio's balanced profile.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.06%

With a total expense ratio (TER) of 0.06%, the portfolio is cost-efficient, enhancing long-term returns. Keeping costs low is crucial for maximizing investment growth, especially in a balanced portfolio where the objective is to achieve steady, risk-adjusted returns over time.

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