A balanced and broadly diversified portfolio with a strong focus on global and US equities

Report created on Jul 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is split evenly between the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares, demonstrating a strategic balance between US and global equities. This composition leverages the growth potential of the US market while also tapping into international diversification. The equal weighting suggests a deliberate choice to balance exposure to both domestic and international markets, aligning well with a balanced risk profile.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 12.96% and a maximum drawdown of -34.07%, the portfolio has shown strong performance with significant volatility. The days contributing most to the returns highlight the impact of short-term gains on overall performance. Comparing this to benchmarks, the portfolio's resilience and growth potential become evident, especially given its balanced approach to US and global equities.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential portfolio values. The key percentiles indicate a substantial upside potential, with a median increase of 417.6%. However, the simulations also underscore the inherent uncertainty in investing, with a 5th percentile outcome of 58.3% growth, highlighting the importance of maintaining a long-term perspective.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (99%), with a minimal cash holding (1%). This allocation is consistent with a growth-oriented strategy but may increase volatility. Diversifying across more asset classes could provide smoother returns over time, especially during stock market downturns.

Sectors Info

  • Technology
    29%
  • Financials
    16%
  • Consumer Discretionary
    11%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector allocation shows a heavy emphasis on technology, financial services, and consumer cyclicals. This concentration in high-growth sectors can drive performance but also increases susceptibility to sector-specific risks. Diversifying more evenly across sectors could reduce risk without significantly compromising potential returns.

Regions Info

  • North America
    82%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic allocation is predominantly in North America (82%), with smaller exposures to developed Europe, Asia, and other regions. This heavy North American focus aligns with the portfolio's emphasis on the US market but limits exposure to emerging market growth and diversification benefits. Increasing allocations to underrepresented regions could enhance global diversification.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    3%

The portfolio's market capitalization breakdown shows a preference for mega and big-cap stocks, which tend to be more stable and less risky than smaller companies. However, this focus might limit exposure to the higher growth potential of mid and small-cap stocks. A more balanced allocation across market caps could offer a better risk-reward profile.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Total World Stock Index Fund ETF Shares
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total World Stock Index Fund ETF Shares indicates overlapping exposures, particularly to US equities. This redundancy reduces the portfolio's diversification benefits. Reducing overlap by reallocating assets could enhance diversification and potentially improve risk-adjusted 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.

The portfolio's current asset allocation, while broadly diversified, could be optimized by addressing the high correlation between its two holdings. By reallocating some assets to reduce overlap, the portfolio could achieve a more efficient risk-return profile, potentially moving closer to the Efficient Frontier, where the highest possible returns are achieved for a given level of risk.

Dividends Info

  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 1.45%

The portfolio's dividend yield of 1.45% contributes to its total return, providing a steady income stream in addition to capital appreciation. This yield is in line with a balanced strategy that seeks growth while also valuing income generation, especially important during market downturns or for investors relying on their portfolio for income.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.05%

With a total expense ratio (TER) of 0.05%, the portfolio benefits from low costs, which is crucial for enhancing long-term returns. Vanguard's reputation for low-cost funds aligns well with the portfolio's cost-efficient approach, ensuring more of the investment returns are retained by the investor.

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