A balanced portfolio with strong US exposure and a focus on technology and dividends

Report created on Jan 7, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is predominantly composed of US large-cap stocks through the Fidelity 500 Index Fund, which makes up 60% of the portfolio. It also includes the Invesco NASDAQ 100 ETF and Schwab U.S. Dividend Equity ETF, each at 20%. This composition reflects a strong focus on equities, with minimal cash holdings. Compared to typical balanced portfolios, which often include bonds, this portfolio is heavily weighted towards stocks. This approach can lead to higher potential returns but also increases exposure to market volatility. Consider diversifying into other asset classes to balance risk and return.

Growth Info

The portfolio has demonstrated a commendable historical performance with a CAGR of 15.17%, indicating robust growth over time. However, it experienced a maximum drawdown of -24.41%, highlighting vulnerability during market downturns. This performance surpasses typical balanced portfolio benchmarks, which often aim for lower volatility. While past performance is not indicative of future results, it offers insight into how the portfolio has weathered different market conditions. To mitigate potential future drawdowns, consider strategies that include diversifying asset classes or incorporating defensive assets.

Projection Info

The Monte Carlo simulation, which uses historical data to model potential future outcomes, projects a wide range of possible returns. With 1,000 simulations, the median projection is a 586.16% growth, while the worst-case scenario still shows a positive return of 113.98%. While these results are encouraging, it's important to note that simulations are based on past data and cannot predict future market conditions with certainty. To prepare for various market scenarios, regularly review and adjust the portfolio based on changing economic conditions and personal goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily concentrated in equities, accounting for nearly 100% of the asset allocation, with a negligible cash component. This lack of diversification across asset classes can lead to increased risk, particularly during periods of market volatility. Balanced portfolios typically include a mix of stocks, bonds, and other asset classes to spread risk. Consider incorporating fixed income or alternative investments to enhance diversification and potentially reduce overall portfolio risk, aligning with the balanced risk classification.

Sectors Info

  • Technology
    32%
  • Financials
    12%
  • Health Care
    11%
  • Telecommunications
    10%
  • Industrials
    7%
  • Consumer Staples
    7%
  • Consumer Discretionary
    6%
  • Consumer Discretionary
    5%
  • Energy
    5%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

The portfolio's sector allocation is notably concentrated in technology, which constitutes over 32% of the total weight. This concentration can lead to higher volatility, especially when interest rates rise or tech stocks face challenges. Other sectors like financial services and healthcare provide some balance but are significantly less represented. A more diversified sector allocation can help mitigate risks associated with sector-specific downturns. Consider reassessing sector weights and potentially increasing exposure to underrepresented areas to achieve a more balanced sector distribution.

Regions Info

  • North America
    99%
  • Europe Developed
    1%

The portfolio is overwhelmingly focused on North America, with 99% of assets allocated there, leaving minimal exposure to other regions. This geographic concentration can limit diversification benefits and expose the portfolio to regional risks. While the US market has historically performed well, global diversification can provide a buffer against local economic downturns. Compare this allocation to global benchmarks and consider increasing exposure to international markets to enhance diversification and capture potential growth opportunities abroad.

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.

The portfolio's current allocation may not be fully optimized on the Efficient Frontier, which represents the best possible risk-return trade-off. By adjusting the weights within the existing assets, it may be possible to achieve a more efficient portfolio. This involves finding the right balance between risk and potential return, without necessarily adding new assets. Consider using financial tools or consulting with a professional to explore these optimization opportunities, ensuring the portfolio aligns with personal risk tolerance and investment goals while maximizing efficiency.

Dividends Info

  • Fidelity 500 Index Fund 1.20%
  • Invesco NASDAQ 100 ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Weighted yield (per year) 1.56%

The portfolio's overall dividend yield is 1.56%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.6%. Dividends can provide a steady income stream and help cushion against market volatility. This yield aligns with a balanced portfolio approach, offering some income while focusing on growth. Given the importance of dividends in this portfolio, regularly review dividend policies of the holdings to ensure they meet income needs and adjust as necessary to maintain a balance between growth and income objectives.

Ongoing product costs Info

  • Fidelity 500 Index Fund 0.02%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Weighted costs total (per year) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, which is beneficial for long-term performance. Low costs mean more of your returns stay invested, compounding over time. This cost efficiency aligns with best practices for portfolio management, as high fees can erode returns. Continue to monitor and control costs by comparing with similar funds and considering lower-cost alternatives where possible. Maintaining low fees will support better net returns over the long term, enhancing the portfolio's overall effectiveness.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey