A balanced portfolio with a strong focus on US equities and low-cost index funds

Report created on Apr 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is composed of two Vanguard ETFs: the Total Stock Market Index Fund (70%) and the Total International Stock Index Fund (30%). This structure leans heavily on US equities, offering broad exposure to the domestic market. Compared to a typical balanced portfolio, the allocation is concentrated in equities, which may slightly increase risk. However, the inclusion of international stocks provides some diversification. A more diversified asset mix could potentially enhance stability, especially during volatile periods. Consider exploring other asset classes, like bonds or real estate, to further balance the risk-return profile.

Growth Info

Historically, the portfolio has delivered a solid CAGR of 10.62%, indicating strong growth over the years. The maximum drawdown of -34.64% highlights potential volatility during market downturns. Compared to benchmarks, these figures suggest the portfolio has performed well. However, the concentration in equities may lead to significant fluctuations. It's crucial to consider how these historical trends align with your risk tolerance. While past performance is encouraging, it doesn't guarantee future results. Regularly reviewing the portfolio's performance against benchmarks can help ensure it remains aligned with your goals.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest an annualized return of 9.73%. The simulations show a wide range of potential end values, with a 5th percentile return of 0.5% and a 67th percentile return of 290.1%. This variability underscores the inherent uncertainty in market predictions. While Monte Carlo analysis provides a useful glimpse into possible future performance, it's important to remember that these are hypothetical scenarios. Consider using these projections as a guide to assess whether the portfolio aligns with your long-term objectives and risk tolerance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is heavily weighted towards stocks, with a 99% allocation. This focus on equities suggests a growth-oriented approach, which may be suitable for investors with a higher risk tolerance. However, the lack of diversity across asset classes could expose the portfolio to greater volatility. By comparison, balanced portfolios typically include bonds or other fixed-income assets to mitigate risk. Consider diversifying into other asset classes to enhance stability and reduce the impact of market downturns. This could involve introducing a modest allocation to bonds or alternative investments.

Sectors Info

  • Technology
    25%
  • Financials
    17%
  • Consumer Discretionary
    11%
  • Industrials
    11%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is led by Technology (25%), followed by Financial Services (17%), and Consumer Cyclicals (11%). This composition aligns closely with common benchmarks but shows a significant tilt towards tech stocks. While this can drive growth, it may also increase volatility, especially during periods of interest rate hikes or tech sector corrections. A well-diversified sector allocation can help manage risk and capture opportunities across different economic conditions. Consider periodically reviewing sector exposures to ensure they align with your risk appetite and market outlook.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is concentrated in North America (72%), with limited exposure to other regions. This allocation reflects a strong home-country bias, typical of many US-focused portfolios. While this has historically been beneficial due to US market strength, it may limit diversification benefits. A more balanced geographic distribution could help mitigate risks associated with regional economic downturns. Consider increasing exposure to emerging markets or other developed regions to enhance diversification and potentially capture growth opportunities outside the US.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    6%
  • Micro-cap
    2%

The portfolio's market capitalization is skewed towards Mega (42%) and Big (30%) companies, with smaller allocations to Medium (19%), Small (6%), and Micro (2%) caps. This distribution aligns with many broad market indices, providing stability through large-cap stocks. However, small and mid-cap stocks can offer higher growth potential, albeit with increased volatility. Balancing exposure across market capitalizations can enhance diversification and capture growth opportunities. Consider periodically adjusting the allocation to ensure it aligns with your investment goals and risk tolerance.

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 can be optimized using the Efficient Frontier, which seeks the best possible risk-return ratio by adjusting asset allocations. This approach focuses on maximizing returns for a given level of risk. While the current allocation is well-balanced, exploring optimization strategies could further enhance performance. Consider periodically reviewing the portfolio's positioning on the Efficient Frontier to ensure it remains aligned with your risk tolerance and investment goals. This proactive approach can help maintain an optimal balance between risk and return.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.40%
  • Vanguard Total International Stock Index Fund ETF Shares 3.10%
  • Weighted yield (per year) 1.91%

The portfolio's dividend yield stands at 1.91%, with the Total Stock Market Index Fund yielding 1.40% and the Total International Stock Index Fund yielding 3.10%. This yield provides a modest income stream, which can be beneficial for reinvestment or income generation. Dividends can play an important role in total returns, especially during periods of market volatility. Consider the role of dividends in your investment strategy and whether increasing exposure to higher-yielding assets aligns with your financial goals.

Ongoing product costs Info

  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, reflecting the cost-efficient nature of Vanguard index funds. Low costs are crucial for enhancing long-term returns, as they reduce the drag on performance. This cost efficiency aligns well with best practices for portfolio management. Continue to monitor expense ratios to ensure they remain competitive. While the current costs are low, it's important to periodically review them against industry standards to maintain cost-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