A comprehensive analysis of a single-ETF portfolio with a balanced risk profile

Report created on Aug 4, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is entirely invested in the Vanguard All-Equity ETF Portfolio, indicating a simplified, yet highly diversified investment approach. The ETF encompasses a wide range of sectors and geographic regions, with a notable emphasis on North American equities. The asset allocation shows a significant tilt towards financial services and technology sectors, which could influence the portfolio's volatility and growth potential. The diversification across both asset classes and sectors aligns with best practices for reducing unsystematic risk, although the single-ETF strategy places considerable reliance on the performance of this specific fund.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.73%, with a maximum drawdown of -30.46%. These figures suggest a resilient performance through various market conditions, albeit with significant short-term volatility. The days contributing to 90% of returns being limited to 19 indicates that a few exceptional periods drove the majority of gains, a common characteristic in equity markets. This performance, while impressive, underscores the importance of understanding the volatility and the periods of negative returns that accompany such growth.

Projection Info

Using Monte Carlo simulations, the forward projection offers a wide range of outcomes, with the median scenario suggesting a substantial increase in value. However, it's crucial to remember that these projections, based on historical data, cannot guarantee future performance. The simulations help in understanding potential volatility and the range of outcomes but should be viewed as one of many tools in assessing portfolio resilience against market uncertainties.

Asset classes Info

  • US Equity
    44%
  • Stocks
    30%

The portfolio's asset class distribution, predominantly in US and other equities, provides a solid foundation for growth. This allocation supports a balanced risk profile by leveraging the growth potential of equities while being mindful of the associated volatility. The absence of fixed-income assets may increase the portfolio's sensitivity to market fluctuations, suggesting a review of risk tolerance and investment horizon might be warranted to ensure alignment with the investor's objectives.

Sectors Info

  • Financials
    22%
  • Technology
    19%
  • Industrials
    12%
  • Consumer Discretionary
    9%
  • Energy
    7%
  • Health Care
    7%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    6%
  • Utilities
    3%
  • Real Estate
    3%

The sectoral allocation leans heavily towards financial services and technology, sectors known for their volatility but also for significant growth opportunities. This concentration enhances the portfolio's growth prospects but may also increase its susceptibility to sector-specific risks. Diversification across other sectors, such as healthcare and consumer goods, provides some balance, mitigating the impact of sectoral downturns. However, investors should be aware of the potential for increased volatility due to this concentration.

Regions Info

  • North America
    75%
  • Europe Developed
    11%
  • Japan
    4%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic allocation is heavily skewed towards North America, with smaller exposures to developed Europe, Japan, and emerging Asian markets. This distribution reflects a focus on more stable, developed markets, which may offer lower risk but also potentially lower growth opportunities compared to emerging markets. The minimal exposure to high-growth emerging markets could be a missed opportunity for diversification and enhanced returns, depending on the investor's risk tolerance and investment horizon.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    32%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for mega and large-cap stocks, which typically offer stability and lower volatility compared to their smaller counterparts. This allocation supports the portfolio's balanced risk classification, as larger companies are generally more resilient during market downturns. However, the limited exposure to small and micro-cap stocks might constrain potential high-growth opportunities, which could be particularly relevant for investors with a longer time horizon and higher risk tolerance.

Dividends Info

  • Vanguard All-Equity ETF Portfolio 1.50%
  • Weighted yield (per year) 1.50%

With a dividend yield of 1.50%, the portfolio provides a modest income stream, supplementing growth with passive income. This yield is relatively low, reflecting the growth-oriented nature of the portfolio and its focus on capital appreciation over income generation. Investors prioritizing income, especially those nearing retirement, may need to adjust their allocation to include higher-yielding assets, though this could also alter the portfolio's risk profile.

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