Balanced portfolio focused on dividend yield and growth through global equity ETFs
Report created on Aug 1, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
VO Vanguard S&P 500 ETF
VOO - US9229083632 50.00% -
VY Vanguard International High Dividend Yield Index Fund ETF Shares
VYMI - US9219467944 50.00%
This portfolio equally splits its allocation between the Vanguard S&P 500 ETF and the Vanguard International High Dividend Yield Index Fund ETF Shares, showcasing a strategic balance between US equity exposure and international high-dividend-yielding stocks. This composition reflects a broad diversification across geographic regions and sectors, aligning with a balanced risk profile. The emphasis on both growth (via the S&P 500) and income (via international dividends) caters to investors looking for a mix of capital appreciation and income generation.
Growth
Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.98%, with a significant drawdown of -35.12%. These figures suggest a resilient performance through various market cycles, although the drawdown indicates potential vulnerability during market downturns. The concentration in high-performing sectors like Financial Services and Technology likely contributed to the strong growth, while the diversified geographic exposure helped mitigate risks associated with any single market.
Projection
Monte Carlo simulations, employing thousands of random market scenarios to forecast future performance, suggest a wide range of outcomes for this portfolio. With 995 out of 1,000 simulations yielding positive returns and a median projected increase of 439.5%, the analysis underscores the portfolio's potential for substantial growth. However, investors should note that such projections, while informative, cannot guarantee future performance and should be viewed as one of many tools in decision-making.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's asset allocation is heavily skewed towards stocks (99%), with a minimal cash reserve (1%). This allocation underlines a growth-oriented strategy, leveraging equity investments for potential returns. The absence of bonds or alternative investments may limit the portfolio's ability to hedge against stock market volatility, suggesting an area for potential enhancement, especially for investors seeking a buffer during market downturns.
Sectors
- Financials 27%
- Technology 18%
- Consumer Discretionary 9%
- Industrials 8%
- Health Care 8%
- Telecommunications 7%
- Consumer Staples 7%
- Energy 6%
- Utilities 4%
- Basic Materials 4%
- Real Estate 2%
With Financial Services and Technology sectors making up 45% of the portfolio, there's a pronounced tilt towards industries known for robust growth and innovation. However, this concentration also introduces sector-specific risks, such as regulatory changes or technological disruptions. Diversifying into underrepresented sectors or increasing allocations to defensive sectors like Healthcare and Consumer Defensive could offer more stability.
Regions
- North America 54%
- Europe Developed 22%
- Japan 7%
- Asia Emerging 5%
- Asia Developed 4%
- Australasia 4%
- Africa/Middle East 2%
- Latin America 2%
The geographic allocation effectively balances North American equity with a substantial stake in developed and emerging markets worldwide. This global exposure diversifies risk and taps into growth opportunities outside the U.S. However, the relatively low allocation to emerging markets (7%) might limit exposure to high-growth economies, suggesting a potential area for adjustment depending on the investor's risk appetite and growth expectations.
Market capitalization
- Mega-cap 48%
- Large-cap 35%
- Mid-cap 15%
- Small-cap 1%
The focus on Mega and Big cap stocks (83% combined) aligns with the portfolio's balanced risk approach, leveraging the stability and lower volatility of large, established companies. However, the minimal exposure to Small and Micro cap stocks limits potential high-growth opportunities these segments can offer. Investors might consider a slight increase in smaller cap allocations to enhance growth potential without significantly altering the risk profile.
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, the portfolio appears well-positioned for a balanced risk-return profile, but there's always room for optimization. Adjusting the allocation between the two ETFs, or introducing new asset classes, could potentially enhance the risk-return ratio. However, any adjustments should be made in the context of the investor's risk tolerance, investment horizon, and financial goals.
Dividends
- Vanguard S&P 500 ETF 1.20%
- Vanguard International High Dividend Yield Index Fund ETF Shares 4.20%
- Weighted yield (per year) 2.70%
The dividend yield, averaging 2.70% across the portfolio, contributes a steady income stream, complementing the growth from equity appreciation. The International High Dividend Yield ETF's significant yield (4.20%) enhances the portfolio's attractiveness for income-focused investors. Regular dividend income can be particularly beneficial in market downturns, providing a passive income source and potential reinvestment opportunities.
Ongoing product costs
- Vanguard S&P 500 ETF 0.03%
- Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
- Weighted costs total (per year) 0.12%
With a Total Expense Ratio (TER) of 0.12%, the portfolio benefits from low costs, maximizing the potential for net returns. Low-cost ETFs like those chosen here are instrumental in building a cost-effective, efficient investment strategy, particularly important for long-term growth. Investors should maintain vigilance on cost management as a core principle of portfolio optimization.
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