Balanced portfolio with strong US focus and low costs offering solid historical returns

Report created on Aug 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards US equities, with an 80% allocation to the SPDR® Portfolio S&P 1500 Composite Stock Market ETF and a 20% allocation to the SPDR S&P World ex US ETF. This composition indicates a strong domestic bias with moderate international exposure. The diversification is considered moderate, focusing on a single asset class (stocks) across various sectors and geographies. The portfolio's structure is simple yet effective for investors seeking growth through a predominantly US-centric approach.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.77%, with a maximum drawdown of -34.51%. Such performance suggests resilience and the potential for robust growth over time, albeit with significant volatility. The days contributing most to returns highlight the impact of short-term gains within a long-term investment strategy. Comparing these figures to benchmark indices could further contextualize the portfolio's performance, suggesting it has navigated market cycles effectively.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential future outcomes, show a median increase of 297.3% in portfolio value. These projections, while not guarantees, suggest a strong likelihood of positive returns. However, investors should remember that such simulations are hypothetical and cannot predict future market conditions with certainty. The broad range of outcomes underscores the importance of maintaining a long-term perspective and being prepared for volatility.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no diversification into other asset classes like bonds or real estate. This allocation strategy maximizes growth potential but also increases volatility and risk. Diversifying across different asset classes can help mitigate risk and smooth out returns over time, especially during stock market downturns. Investors might consider whether introducing bonds or alternative investments could align with their risk tolerance and investment goals.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is broadly diversified, with technology, financial services, and industrials leading. This sector spread is reflective of the broader market composition, especially within the US. However, the heavy weighting towards technology could introduce higher volatility, given the sector's sensitivity to market shifts and interest rate changes. Balancing sector exposure can help manage risk, especially if certain sectors are expected to underperform in changing economic conditions.

Regions Info

  • North America
    82%
  • Europe Developed
    11%
  • Japan
    4%
  • Asia Developed
    2%
  • Australasia
    1%

Geographic exposure is predominantly in North America (82%), with limited exposure to developed and emerging markets outside the US. This concentration enhances the portfolio's exposure to the US economy's growth potential but may limit diversification benefits and exposure to global growth opportunities. Increasing allocations to international markets could offer broader diversification and potential for higher returns, albeit with additional risk from currency fluctuations and geopolitical events.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    32%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's market capitalization spread, with a focus on mega and big-cap stocks (76% combined), suggests a bias towards stability and lower volatility relative to smaller companies. However, this could also limit potential high-growth opportunities found in smaller cap stocks. Considering a more balanced approach to include medium, small, and micro-cap stocks could enhance growth potential and diversification.

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 allocation appears well-positioned on the Efficient Frontier, suggesting an optimal risk-return balance based on historical data. However, optimizing for the Efficient Frontier solely with existing assets may overlook potential benefits from broader diversification. Regularly reviewing and potentially adjusting the asset allocation can help maintain this balance as market conditions and investment goals evolve.

Dividends Info

  • SPDR S&P World ex US 2.90%
  • SPDR® Portfolio S&P 1500 Composite Stock Market ETF 1.20%
  • Weighted yield (per year) 1.54%

The portfolio's dividend yield of 1.54% contributes to total returns, providing a steady income stream alongside capital appreciation. The yield difference between the two ETFs highlights the higher income potential from international stocks. For investors seeking income, focusing on assets with higher dividend yields or considering dividend growth strategies could enhance the portfolio's income component without significantly increasing risk.

Ongoing product costs Info

  • SPDR S&P World ex US 0.03%
  • SPDR® Portfolio S&P 1500 Composite Stock Market ETF 0.03%
  • Weighted costs total (per year) 0.03%

With a total expense ratio (TER) of 0.03%, the portfolio benefits from exceptionally low costs, which supports better long-term performance by minimizing the drag on returns. This cost efficiency is particularly advantageous in a growth-focused strategy, where every percentage point saved on costs can compound significantly over time. Investors should continue to monitor costs, especially if considering adding new assets or rebalancing the portfolio.

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