Balanced portfolio with a strategic mix of index funds ETFs and bonds for long-term growth

Report created on Nov 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is structured to provide a balanced mix of growth and income, with a significant emphasis on stock-based funds (82%) and a moderate allocation to bonds (15%) and cash (2%). This composition supports a diversified approach, leveraging the Vanguard Target Retirement 2040 Fund for broad-based exposure, complemented by targeted investments in U.S. and international equities and bonds. The inclusion of small-cap value ETFs from Avantis® adds a tilt towards value investing, potentially offering higher returns associated with smaller companies' growth prospects.

Growth Info

Historically, the portfolio has demonstrated robust performance with a Compound Annual Growth Rate (CAGR) of 10.71%. This performance, however, comes with its share of volatility, as indicated by a maximum drawdown of -31.36%. It's crucial to remember that a few days have disproportionately contributed to the overall returns, which underscores the importance of staying invested over the long term to capture these pivotal moments.

Projection Info

Monte Carlo simulations, which project future performance based on historical data, suggest a wide range of outcomes. The median projection indicates a potential increase of 206.8% in portfolio value, with a 94.6% chance of positive returns. While encouraging, it's important to note that these simulations are not guarantees but rather a tool to gauge potential risk and return profiles.

Asset classes Info

  • Stocks
    82%
  • Bonds
    15%
  • Cash
    2%

The portfolio's asset class distribution aligns with a balanced-risk profile, leaning towards equities for growth while maintaining a bond presence for income and stability. This blend is suitable for medium to long-term investment horizons, offering a mix of capital appreciation and protection against market volatility. Adjusting this balance could further align the portfolio with specific risk tolerance and investment goals.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    12%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    5%
  • Basic Materials
    5%
  • Consumer Discretionary
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sectoral allocation shows a strong preference for technology and financial services, which are sectors known for their growth potential but also for their volatility. Industrials, consumer cyclicals, and healthcare follow, creating a diversified exposure that can mitigate sector-specific risks. This sector spread is beneficial, though monitoring sector performance and rebalancing as needed would ensure continued alignment with investment objectives.

Regions Info

  • North America
    64%
  • Europe Developed
    14%
  • Japan
    7%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • No data
    2%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (64%), with meaningful allocations to developed Europe and Japan. Emerging markets are underrepresented, which may limit exposure to high-growth regions. Considering the global economic shifts, increasing diversification into emerging markets could enhance growth prospects and reduce geographic concentration risk.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    22%
  • Mid-cap
    16%
  • Small-cap
    8%
  • Micro-cap
    5%

The market capitalization breakdown reveals a balanced approach, with a tilt towards mega and large-cap stocks. This bias towards larger companies may contribute to stability but could also limit potential gains from smaller, more agile firms. Increasing exposure to small and micro-cap stocks, particularly in sectors with high growth potential, could offer a higher risk-reward ratio.

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.

Regarding risk vs. return optimization, the portfolio appears well-positioned on the Efficient Frontier, indicating an efficient allocation of resources for the desired risk level. While current allocations are effective, ongoing review and rebalancing in response to market changes can ensure the portfolio remains optimized for the best possible risk-return ratio.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.40%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Schwab US Aggregate Bond Index Fund 3.60%
  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 2.60%
  • Schwab S&P 500 Index Fund 1.10%
  • VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES 2.30%
  • Weighted yield (per year) 2.09%

Dividend yields across the portfolio contribute to its income generation, with an overall yield of 2.09%. This income can provide a cushion during market downturns and contribute to total returns over time. Reinvesting these dividends can further compound growth, a strategy particularly beneficial in tax-advantaged accounts.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Fidelity Govt Cash Rsrvs 0.26%
  • Schwab US Aggregate Bond Index Fund 0.04%
  • SCHWAB INTERNATIONAL INDEX FUND SELECT SHARES 0.06%
  • Schwab S&P 500 Index Fund 0.02%
  • VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES 0.08%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) of 0.10% is impressively low, maximizing the potential for net returns. Keeping costs low is a critical component of long-term investment success, as even small differences in fees can significantly impact compounded returns over time.

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