A cautious yet growth-oriented portfolio with a strong focus on US equities and low costs

Report created on Jul 22, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is characterized by a significant allocation to US equity ETFs, complemented by a sizeable position in short-term Treasury bonds. The dominance of Vanguard Total Stock Market and S&P 500 ETFs indicates a strong tilt towards US equities, while the iShares® 0-3 Month Treasury Bond ETF provides liquidity and stability. The inclusion of Vanguard Total International Stock Index Fund ETF introduces international exposure, albeit limited. This composition suggests a strategy aimed at capturing the growth potential of the US market, with a conservative balance provided by short-term bonds.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 12.69% and a maximum drawdown of -20.31%, the portfolio has demonstrated resilience and an ability to recover from downturns. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing this to benchmark indices would provide further context, but these figures suggest a well-managed risk-return profile suitable for cautious investors seeking growth.

Projection Info

Monte Carlo simulations, using historical data to forecast potential future outcomes, show a wide range of possible performances, with a median increase suggesting substantial growth potential. It's important to remember, however, that these projections are hypothetical and cannot guarantee future results. They are useful for understanding potential volatility and assessing risk but should be one of many tools used in decision-making.

Asset classes Info

  • Stocks
    72%
  • Cash
    27%
  • Bonds
    1%

The allocation across asset classes with 72% in stocks, 27% in cash equivalents, and a minimal bond presence reflects a cautious yet growth-oriented strategy. This mix supports the pursuit of capital appreciation through equities while maintaining a significant liquidity reserve for stability and potential reinvestment. Adjusting this balance could further align the portfolio with the investor's risk tolerance and return expectations.

Sectors Info

  • Technology
    22%
  • Financials
    11%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Industrials
    7%
  • Telecommunications
    6%
  • Consumer Staples
    4%
  • Energy
    2%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The sector allocation shows a strong emphasis on technology and financial services, followed by consumer cyclicals and healthcare. This concentration in sectors known for innovation and growth potential aligns with the portfolio's overall strategy. However, it also introduces sector-specific risks, such as volatility in tech stocks. Diversifying into additional sectors could mitigate these risks while still allowing for significant growth opportunities.

Regions Info

  • North America
    65%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

The geographic allocation is heavily weighted towards North America, with minimal exposure to developed Europe, Asia, and other regions. This concentration enhances the portfolio's potential for growth, given the historical performance of US markets, but also increases its vulnerability to regional economic and political events. Broadening geographic diversity could reduce this risk and tap into growth opportunities in emerging and developed markets outside the US.

Market capitalization Info

  • Mega-cap
    31%
  • Large-cap
    23%
  • Mid-cap
    14%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization breakdown, with a focus on mega and big-cap stocks, suggests a preference for established, less volatile companies. This approach is consistent with the portfolio's cautious profile, as these companies typically offer more stability during market downturns. Considering a modest increase in medium to small-cap allocations could introduce higher growth potential, albeit with increased risk.

Redundant positions Info

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

The high correlation between the Vanguard Total Stock Market Index Fund ETF Shares and the Vanguard S&P 500 ETF indicates overlapping exposure, reducing the portfolio's diversification benefits. Diversification is key to managing risk, and reducing redundancy in holdings can help achieve a more efficient risk-return 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.

Optimizing the portfolio using the Efficient Frontier suggests that an adjustment could yield a slightly higher expected return with the same level of risk. This optimization process identifies the most efficient allocation of the current assets, aiming to maximize returns for a given risk level. Removing redundant assets and rebalancing towards a more diverse set of holdings could achieve this improved efficiency.

Dividends Info

  • iShares® 0-3 Month Treasury Bond ETF 4.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.23%

The portfolio's dividend yield contributes positively to its total return, with an overall yield of 2.23%. This income stream, particularly from the higher-yielding iShares® 0-3 Month Treasury Bond ETF, enhances returns in various market conditions. For investors seeking both growth and income, maintaining or slightly increasing exposure to assets with higher dividend yields could be beneficial.

Ongoing product costs Info

  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's overall low cost, with a Total Expense Ratio (TER) of 0.04%, is a notable strength. Lower costs directly translate to higher net returns over time, making this an efficient allocation from a cost perspective. This efficiency is especially important in a cautious strategy, where every basis point in savings can contribute to achieving long-term investment goals.

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