Cautious portfolio with highly diversified global exposure and low costs

Report created on Jan 2, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed of 46% U.S. stocks, 24% U.S. bonds, 20% international stocks, and 10% international bonds. This allocation provides a balanced mix of equities and fixed income, aligning well with a cautious risk profile. Compared to common benchmarks, this portfolio is well-diversified across asset classes. Such a composition is ideal for investors seeking moderate growth while maintaining a lower risk level. It is advisable to periodically review the allocation to ensure it continues to align with personal risk tolerance and market conditions.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.13%, which is a solid performance for a cautious investment strategy. The maximum drawdown of -25.96% indicates the worst peak-to-trough decline, which is moderate compared to more aggressive portfolios. This past performance suggests a reasonable balance between risk and reward. However, remember that historical performance does not guarantee future results. It's important to maintain realistic expectations and consider the potential for similar volatility in the future.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a median growth of 115.97% over the investment horizon. With 941 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for potential growth. However, the 5th percentile projection of -5.35% highlights the potential downside risk. While these projections offer valuable insights, they are not definitive predictions. Consider these results as one of many tools to guide your investment decisions.

Asset classes Info

  • Stocks
    65%
  • Bonds
    33%
  • Cash
    1%

The portfolio's allocation is 65.5% in stocks and 33.4% in bonds, with a small cash component. This allocation aligns with a cautious investment approach, providing exposure to growth through equities while maintaining stability with bonds. Compared to typical benchmarks, this mix is balanced and supports diversification. It's crucial to monitor the ratio between stocks and bonds to ensure it aligns with your risk tolerance, especially as market conditions change. Consider rebalancing if the allocation drifts significantly from your target.

Sectors Info

  • Technology
    17%
  • Financials
    10%
  • Health Care
    7%
  • Industrials
    7%
  • Consumer Discretionary
    7%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is diversified across multiple sectors, with significant exposure to technology (16.8%), financial services (10.4%), and healthcare (7.1%). This distribution aligns well with common benchmarks, indicating a balanced sector allocation. However, the technology sector's weight may lead to increased volatility during market fluctuations. It's important to consider sector trends and their potential impact on your portfolio. Regularly reviewing sector allocations can help maintain diversification and mitigate sector-specific risks.

Regions Info

  • North America
    47%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The geographic allocation is heavily weighted towards North America (47.4%), with smaller exposures to Europe, Asia, and other regions. This distribution provides a solid foundation in developed markets, which can offer stability. However, there is limited exposure to emerging markets, which may limit growth potential. Consider whether this geographic mix aligns with your investment goals. Increasing exposure to underrepresented regions could enhance diversification and capture growth opportunities in emerging markets.

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 is currently optimized for its cautious risk profile, balancing risk and return effectively. Using the Efficient Frontier, this allocation offers the best possible risk-return ratio with the current assets. While further optimization might not be necessary, it's crucial to periodically reassess the portfolio to ensure it aligns with changing goals and market conditions. Staying informed about new investment opportunities can also provide ways to enhance the portfolio's efficiency.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Vanguard Total International Bond Index Fund ETF Shares 4.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 2.59%

The portfolio's overall dividend yield is 2.59%, with bonds providing higher yields compared to stocks. Dividends can contribute significantly to total returns, especially in a cautious portfolio. This yield aligns well with the portfolio's risk profile, offering a steady income stream. However, it's important to remember that dividend yields can fluctuate based on market conditions. Regularly reviewing the yield and its contribution to your overall returns can help ensure your income goals are met.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Bond Index Fund ETF Shares 0.07%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, which is beneficial for long-term performance. Lower costs mean more of your returns are retained, enhancing compounding effects. Vanguard funds are known for their low fees, which is a positive aspect of this portfolio. It's important to regularly review the costs associated with your investments to ensure they remain competitive. Consider whether there are opportunities to further reduce costs without sacrificing diversification or performance.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey