A conservative portfolio with a heavy tilt towards emerging markets bonds and moderate diversification

Report created on Jul 28, 2025

Risk profile Info

2/7
Conservative
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio leans significantly towards fixed income, with a substantial 70.76% in emerging markets bonds, complemented by a 14.43% allocation in a broad US equity index and smaller positions in international small-cap value stocks and emerging markets stocks. This composition suggests a conservative risk profile, aiming to balance income generation with growth potential. However, the heavy concentration in emerging markets bonds introduces country and currency risks not typically associated with conservative strategies.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.76%, with a maximum drawdown of -17.09%. These figures indicate a relatively stable performance with periods of volatility, likely due to the emerging markets exposure. The days contributing to 90% of returns being limited to 18 suggests that a few significant positive market movements have driven most of the portfolio's gains, highlighting the impact of timing in investment returns.

Projection Info

Monte Carlo simulations, using 1,000 iterations, project a wide range of outcomes for this portfolio. The median (50th percentile) scenario suggests a potential 280.7% growth, while the 5th percentile indicates a more modest 48.8% growth. With 988 out of 1,000 simulations showing positive returns, the analysis forecasts a generally optimistic outlook. However, the reliance on past data means these projections cannot guarantee future performance and should be viewed as one of many tools in decision-making.

Asset classes Info

  • Bonds
    67%
  • Stocks
    29%
  • Cash
    4%

The asset class distribution shows a dominant 67% in bonds, 29% in stocks, and a 4% cash holding, aligning with the portfolio's conservative profile. The heavy bond weighting provides income and stability, while the equity components offer growth potential. This balance supports a risk-averse strategy but may limit upside during bull markets.

Sectors Info

  • Technology
    6%
  • Financials
    5%
  • Industrials
    4%
  • Basic Materials
    3%
  • Telecommunications
    2%
  • Consumer Discretionary
    2%
  • Health Care
    2%
  • Consumer Discretionary
    2%
  • Consumer Staples
    1%
  • Energy
    1%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocations are broadly diversified across technology, financial services, and industrials, among others, with no single sector dominating. This sector spread can mitigate specific industry risks but the relatively small equity portion limits the impact of this diversification on overall portfolio performance.

Regions Info

  • No data
    71%
  • North America
    16%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    1%
  • Australasia
    1%
  • Asia Developed
    1%

Geographic exposure is heavily skewed towards unknown regions (71%), presumably due to the large allocation in emerging markets bonds. North America and developed Europe represent smaller portions. This geographic distribution enhances the portfolio's global reach but also increases exposure to geopolitical and currency risks inherent in emerging markets.

Market capitalization Info

  • Mid-cap
    10%
  • Mega-cap
    8%
  • Large-cap
    6%
  • Small-cap
    5%
  • Micro-cap
    1%

The market capitalization breakdown indicates a mix across medium, mega, big, small, and micro-cap stocks. This diversification can help manage risk and capture growth across different company sizes, though the overall impact is diluted by the portfolio's significant bond allocation.

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 may not be fully optimized for the best risk-return ratio due to its heavy bias towards emerging markets bonds. Adjusting the allocation to include a broader mix of asset classes and geographies could potentially enhance returns for the same level of risk or reduce volatility without significantly sacrificing returns.

Dividends Info

  • Dimensional ETF Trust - Dimensional International Small Cap Value ETF 2.60%
  • VANGUARD EMERGING MARKETS BOND FUND INVESTOR SHARES 5.90%
  • VANGUARD EMERGING MARKETS STOCK INDEX FUND INSTITUTIONAL PLUS SHARES 2.50%
  • VANGUARD 500 INDEX FUND INSTITUTIONAL SELECT SHARES 0.90%
  • Weighted yield (per year) 4.69%

The portfolio's dividend yield stands at 4.69%, driven mainly by the high yield from the emerging markets bond fund. This yield contributes to the portfolio's income generation, supporting its conservative nature by providing regular cash flow, which is crucial for investors prioritizing income over capital growth.

Ongoing product costs Info

  • Dimensional ETF Trust - Dimensional International Small Cap Value ETF 0.42%
  • VANGUARD EMERGING MARKETS BOND FUND INVESTOR SHARES 0.50%
  • VANGUARD EMERGING MARKETS STOCK INDEX FUND INSTITUTIONAL PLUS SHARES 0.07%
  • VANGUARD 500 INDEX FUND INSTITUTIONAL SELECT SHARES 0.01%
  • Weighted costs total (per year) 0.41%

With a total expense ratio (TER) of 0.41%, the portfolio is cost-efficient, enhancing net returns. The exceptionally low cost of the Vanguard 500 Index Fund at 0.01% is a highlight, demonstrating the benefits of index fund investing for keeping expenses minimal.

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