Balanced portfolio leaning heavily on US equities with a strong focus on large-cap stocks

Report created on Aug 3, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is predominantly invested in equities, with a significant 70% allocation to the Vanguard S&P 500 ETF, 25% in the Vanguard Total International Stock Index Fund ETF, and a modest 5% in the Vanguard Total Bond Market Index Fund ETF. This composition suggests a strong bias towards US equities, given the heavy weighting of the S&P 500 ETF. The international exposure provided by the Vanguard Total International Stock Index Fund ETF adds a layer of global diversification, though the portfolio remains largely tilted towards the US market.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.05%, with a maximum drawdown of -32.69%. This performance is indicative of the portfolio's resilience and growth potential, though the significant drawdown highlights the inherent risks associated with a heavy equity focus. The days contributing to 90% of returns being so few indicates that timing the market plays a crucial role in achieving these returns, which is a strategy fraught with risk for the average investor.

Projection Info

Utilizing a Monte Carlo simulation, which projects future performance based on historical data, this portfolio shows a wide range of outcomes. The median projection suggests a 167.6% return, with a 5th percentile at a low 7.6% return, indicating potential underperformance in adverse market conditions. It's crucial to remember that these simulations are based on past data and cannot predict future market movements with certainty.

Asset classes Info

  • Stocks
    94%
  • Bonds
    5%
  • Cash
    1%

The allocation across asset classes showcases a strong preference for stocks (94%) over bonds (5%), with a negligible cash holding. This aggressive allocation towards equities is typical for investors seeking higher returns, albeit with a higher risk profile. The minimal bond holding offers some level of income and portfolio stability, though its impact is limited given the overall portfolio composition.

Sectors Info

  • Technology
    26%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

The sectoral allocation within this portfolio is well-diversified across 11 sectors, with technology (26%) and financial services (15%) as the dominant sectors. This sectoral spread is reflective of the broader market composition, especially within the S&P 500, and suggests a balanced approach to sector exposure. However, the heavy weighting in technology could lead to increased volatility, given the sector's sensitivity to market changes.

Regions Info

  • North America
    72%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily skewed towards North America (72%), with diversified but smaller allocations across developed Europe (10%), Asia Emerging (4%), and other regions. This geographic distribution emphasizes the portfolio's reliance on the performance of the US market, potentially limiting the benefits of global diversification in mitigating region-specific risks.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    32%
  • Mid-cap
    17%
  • Small-cap
    2%

The portfolio's exposure by market capitalization leans significantly towards mega (44%) and big (32%) cap stocks, with medium, small, and micro caps making up the remainder. This indicates a preference for the stability and lower volatility often associated with larger companies, though it may also limit the potential for higher returns from smaller, high-growth companies.

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, this portfolio appears to be positioned towards the higher end of the risk-return spectrum, given its heavy equity allocation and sectoral concentration. While it may not be fully optimized for every investor's risk tolerance, adjustments in the bond allocation or diversifying further internationally could potentially move the portfolio closer to an optimal risk-return balance.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.74%

The dividend yields from the individual ETFs contribute to the portfolio's total yield of 1.74%, with the bond ETF offering the highest yield at 3.50%. This income component is a valuable aspect of the portfolio's total return, providing a steady income stream and potentially offsetting some of the volatility inherent in equity investments.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from low total expense ratios (TER) across its holdings, averaging 0.04%. This cost efficiency is critical in maximizing long-term returns, as lower costs directly translate to higher net returns for investors. The Vanguard ETFs selected are known for their low costs, aligning with best practices in portfolio management.

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