A balanced and broadly diversified portfolio with a focus on large-cap and international equities

Report created on Jul 19, 2025

Risk profile Info

4/7
Balanced
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Diversification profile Info

4/5
Broadly Diversified
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Positions

This portfolio is primarily composed of equities, with a significant emphasis on U.S. large-cap stocks (45%) and international equities (30%). The inclusion of a U.S. dividend equity ETF (20%) suggests a focus on income generation alongside growth, while the smaller allocation to U.S. mid-cap stocks (5%) adds a touch of diversification within the equity space. The absence of bonds, cash, or alternative investments indicates a purely equity-driven strategy, aiming for growth over income or preservation.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.79%, with a maximum drawdown of -34.28%. This performance is indicative of a balanced approach, blending growth with a degree of resilience. However, the days contributing to 90% of returns being limited to 26 suggests volatility and the importance of being invested during key market movements. Comparing this to benchmarks would help contextualize its resilience and growth potential.

Projection Info

A Monte Carlo simulation, running 1,000 scenarios, forecasts a wide range of outcomes, with a median increase of 301.7%. This method, while not predictive, uses historical data to estimate future possibilities, emphasizing the portfolio's potential for substantial growth but also underscoring the inherent uncertainties in stock investments. The high number of simulations with positive returns (984) further supports the portfolio's robustness.

Asset classes Info

  • Stocks
    100%

With 100% of the portfolio allocated to stocks, diversification across asset classes is minimal. This allocation strategy is typical for investors with a higher risk tolerance, focusing on capital appreciation over risk mitigation through asset class diversification. While stocks historically offer higher returns, they also come with increased volatility, making this approach more suitable for those with a longer investment horizon.

Sectors Info

  • Technology
    21%
  • Financials
    16%
  • Industrials
    12%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Consumer Staples
    9%
  • Energy
    7%
  • Telecommunications
    7%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral allocation is well-diversified, covering technology (21%), financial services (16%), and industrials (12%) as the top three sectors. This broad coverage helps mitigate sector-specific risks, although the significant weight in technology could introduce volatility. The inclusion of defensive sectors like healthcare and consumer staples adds a layer of stability, balancing the portfolio's overall risk profile.

Regions Info

  • North America
    73%
  • Europe Developed
    16%
  • Japan
    6%
  • Asia Developed
    2%
  • Australasia
    2%

Geographically, the portfolio is heavily weighted towards North America (73%), with notable allocations to developed Europe (16%) and Japan (6%). This distribution reflects a strong home bias, potentially limiting exposure to emerging markets and their growth opportunities. While this may reduce volatility, diversifying more into emerging markets could offer higher growth prospects and further risk mitigation through geographic spread.

Market capitalization Info

  • Large-cap
    37%
  • Mega-cap
    35%
  • Mid-cap
    22%
  • Small-cap
    5%

The market capitalization breakdown shows a balanced approach, with allocations to big (37%), mega (35%), and medium (22%) cap stocks, complemented by a small exposure to small caps (5%). This suggests a preference for the stability and lower volatility of larger companies, while still capturing the growth potential of mid and small caps. The absence of micro-caps is consistent with the portfolio's balanced risk profile.

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.

Considering the Efficient Frontier, this portfolio appears to be optimized for a balance between risk and return, given its current assets and allocation. However, the absence of non-equity investments suggests there might be room for improvement in achieving the best possible risk-return ratio. Exploring diversification into other asset classes could potentially offer similar returns with reduced volatility, aligning closer to the Efficient Frontier.

Dividends Info

  • Schwab U.S. Dividend Equity ETF 3.80%
  • Schwab International Equity ETF 2.60%
  • Schwab U.S. Mid-Cap ETF 1.40%
  • Schwab U.S. Large-Cap ETF 1.20%
  • Weighted yield (per year) 2.15%

The dividend yields across the ETFs, with a total yield of 2.15%, contribute to the portfolio's income generation, complementing capital appreciation as a source of total return. This is particularly relevant for investors seeking a mix of growth and income. The yields vary significantly, from 3.80% for the U.S. Dividend Equity ETF to 1.20% for the U.S. Large-Cap ETF, highlighting the income-generating potential of different equity classes.

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Equity ETF 0.06%
  • Schwab U.S. Mid-Cap ETF 0.04%
  • Schwab U.S. Large-Cap ETF 0.03%
  • Weighted costs total (per year) 0.05%

The portfolio benefits from low costs, with a total expense ratio (TER) of 0.05%. Low costs are crucial for long-term investment success, as they directly enhance net returns. This portfolio's focus on low-cost ETFs is a strategic advantage, ensuring more of the investment's return is retained by the investor.

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