Balanced portfolio with a strong focus on US equities and minimal bond exposure

Report created on Aug 18, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards US equities, with a significant 75.06% allocation in the Vanguard 500 Index Fund Admiral Shares, indicating a strong focus on large-cap US stocks. The remaining equity allocation is spread across developed markets, small-cap, and mid-cap funds, providing a moderate level of diversification. The minimal bond allocation suggests a tilt towards growth over income or stability, which is consistent with the portfolio's balanced risk classification.

Growth Info

The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 13.98%, is impressive, reflecting the strong performance of US equities in recent years. However, the maximum drawdown of -34.21% indicates potential volatility, which investors should be prepared for. The days contributing to 90% of returns highlight the impact of significant market movements on performance.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with a median increase of 246.3%, suggesting potential for substantial growth. However, the broad spread between the 5th and 67th percentiles underscores the inherent uncertainty in these projections. It's important to remember that while Monte Carlo simulations can offer valuable insights, they are based on historical data and cannot predict future market conditions with certainty.

Asset classes Info

  • Stocks
    97%
  • Bonds
    2%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (97%), with a minimal bond presence (2%). This allocation aligns with a growth-oriented investment strategy but may expose the portfolio to higher volatility. Investors should consider whether the current asset mix aligns with their risk tolerance and investment horizon.

Sectors Info

  • Technology
    28%
  • Financials
    14%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Real Estate
    3%
  • Utilities
    3%
  • Basic Materials
    2%

The sectoral distribution is well-diversified within the equity allocation, with a notable emphasis on technology, financial services, and consumer cyclicals. This sectoral mix reflects the composition of the broader market but may also expose the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting technology and financial stocks.

Regions Info

  • North America
    89%
  • Europe Developed
    5%
  • No data
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

The geographic allocation is heavily concentrated in North America (89%), with limited exposure to developed markets outside the US. This concentration benefits from the historical strength of the US market but may limit potential gains from diversification into emerging markets or other developed economies.

Market capitalization Info

  • Mega-cap
    39%
  • Large-cap
    29%
  • Mid-cap
    22%
  • Small-cap
    6%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for larger companies, with 39% in mega-cap stocks. This bias towards larger companies may provide stability but could also limit growth potential compared to more aggressive allocations that include a higher proportion of small and mid-cap stocks.

Redundant positions Info

  • VANGUARD MID-CAP INDEX FUND ADMIRAL SHARES
    VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES
    VANGUARD 500 INDEX FUND ADMIRAL SHARES
    High correlation

The high correlation among the US equity funds (Vanguard 500, Mid-Cap, and Small-Cap Index Funds) suggests redundancy that may not contribute significantly to diversification. Reducing overlap in highly correlated assets can enhance the portfolio's efficiency by diversifying risk without sacrificing expected returns.

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 for risk vs. return could involve reducing the overlap in highly correlated US equity funds and considering a more diverse allocation across asset classes, sectors, and geographies. This process, guided by the Efficient Frontier concept, aims to achieve the best possible risk-return ratio by adjusting asset allocations, potentially enhancing the portfolio's performance.

Dividends Info

  • Vanguard Total Bond Market Index Fund Admiral Shares 3.20%
  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 0.90%
  • VANGUARD MID-CAP INDEX FUND ADMIRAL SHARES 1.10%
  • VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES 1.00%
  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 1.90%
  • Weighted yield (per year) 1.06%

The portfolio's dividend yield is modest, reflecting the growth-oriented nature of the equity funds. While dividends contribute to total returns, the primary focus here appears to be on capital appreciation. Investors seeking income in addition to growth might consider increasing the allocation to higher-yielding assets.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund Admiral Shares 0.04%
  • VANGUARD 500 INDEX FUND ADMIRAL SHARES 0.04%
  • VANGUARD MID-CAP INDEX FUND ADMIRAL SHARES 0.05%
  • VANGUARD SMALL-CAP INDEX FUND ADMIRAL SHARES 0.05%
  • VANGUARD DEVELOPED MARKETS INDEX FUND ADMIRAL SHARES 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low costs, with total expense ratios (TERs) ranging from 0.04% to 0.05%, which is excellent for long-term growth. Lower costs directly translate into higher net returns for investors, making this an attractive feature of the portfolio.

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