A growth tilted balanced portfolio with strong North American focus and moderate diversification

Report created on Aug 23, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is built around three broad stock ETFs, with 50% in a large US index fund, 40% in a global core equity fund, and 10% in a NASDAQ 100 fund hedged to Canadian dollars. That heavy use of broad indexes is a big positive and lines up well with common benchmark-style portfolios. It leans heavily toward equities relative to what many “balanced” models would hold, which often include more bonds. Someone wanting smoother ups and downs might consider adding a clear slice of defensive assets like high‑quality bonds or cash equivalents, while someone comfortable with equity risk can keep the structure but be mindful that big market drops will hit this mix fairly hard.

Growth Info

Historically, this mix has delivered a very strong compound annual growth rate (CAGR) of 16.48%. CAGR is just the “average speed” your money grew per year, smoothing out the bumps. Against most blended benchmarks, that’s excellent, but it comes with a max drawdown of –28.43%, meaning at one point it was down almost 30% from a peak. That sort of drop is normal for equity‑heavy portfolios. The fact that just 24 days made up 90% of total returns shows how a handful of big up days drive long‑term results. Staying invested through volatility is crucial because missing a few strong days can dramatically reduce long‑run growth.

Projection Info

The Monte Carlo simulation ran 1,000 “what if” paths based on historical patterns and produced a wide range of outcomes. Monte Carlo is basically a way of rolling the dice many times using past return and volatility data to see possible future portfolio values. The median (50th percentile) result at 819.8% suggests strong potential growth if markets behave similarly to the past, while the 5th percentile at 172.5% shows that weaker but still positive outcomes are also plausible. An average simulated annualized return near 19% is very optimistic and shouldn’t be taken as a promise. These simulations are helpful for framing expectations, but they depend heavily on historical data and can’t fully capture future shocks or regime changes.

Asset classes Info

  • US Equity
    76%
  • Stocks
    11%
  • Cash
    1%

The portfolio is overwhelmingly in equities, with about 87% in stocks (76% tagged as US equity and 11% as general equity), plus a small 1% cash allocation. That stock‑heavy stance is the main driver of both the strong historic growth and the larger drawdowns. Compared with many “balanced” benchmarks that often include 30–50% in fixed income, this mix is more aggressive. For someone who values capital preservation or has shorter‑term spending needs, layering in more conservative assets could help soften volatility. For a long‑term growth focus, the current structure is well‑aligned with equity‑driven strategies, but it’s important to accept that this comes with more frequent and deeper swings during market stress.

Sectors Info

  • Technology
    32%
  • Financials
    15%
  • Consumer Discretionary
    10%
  • Telecommunications
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is nicely spread across all major areas, with technology at 32% being the largest tilt, followed by financials, consumer cyclicals, communication services, and industrials. This looks broadly similar to common large‑cap indices, which is a strong sign of healthy diversification. The tech and growth tilt means the portfolio can benefit when innovation and growth stories lead markets, but it may wobble more when interest rates rise or when investors rotate toward more defensive areas. Maintaining this broad sector spread is a real strength. If the tech tilt ever became uncomfortably large versus broad benchmarks, trimming slightly toward more balanced exposure could help keep risk in check without changing the core philosophy.

Regions Info

  • North America
    88%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

Geographically, about 88% is in North America, with smaller slices in developed Europe, Japan, and other developed and emerging regions. This North America tilt, particularly to the US, has been a big tailwind over the last decade because US markets have outperformed many others. It also lines up with how many global benchmarks are naturally US‑heavy. The trade‑off is higher sensitivity to North American economic and policy cycles. Adding a bit more non‑North American equity could smooth regional risk and tap into different growth drivers, but staying US‑tilted is a valid choice as long as the concentration is intentional and you’re comfortable with its impact on volatility and currency‑related effects.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    3%

Market‑cap exposure is dominated by mega and big companies (45% and 33%), with 17% in mid caps and a small 3% in small caps. This large‑cap bias is very typical of index‑based strategies and aligns closely with major benchmarks, which is a positive sign for stability and liquidity. Big, established companies tend to be more resilient and easier to trade than tiny firms, though they may sometimes grow more slowly. The modest mid‑cap and small‑cap exposure adds some extra growth potential and diversification without making the portfolio overly volatile. If someone wanted even more long‑run growth (and could stomach extra bumps), slightly increasing smaller‑company exposure could be an option, but the current balance is very sensible.

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.

From a risk‑return perspective, this portfolio sits on the growthier side for a “balanced” risk score of 4 out of 7. Efficient Frontier analysis—basically plotting all mixes of your current assets to find the best risk‑return trade‑off—might suggest small shifts among the three ETFs to slightly reduce volatility without giving up much return, or vice versa. Efficiency here simply means getting the most expected return for each unit of risk, not maximizing diversification or income. Because all holdings are equity index funds, major shifts in efficiency will mostly come from tweaking the overall stock exposure versus adding truly defensive assets. Still, even within this trio, minor allocation changes could better align the mix with comfort level and time horizon.

Dividends Info

  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core Equity Portfolio 0.90%
  • iShares NASDAQ 100 (CAD Hedged) 0.10%
  • Weighted yield (per year) 0.62%

The overall dividend yield is about 0.62%, with each ETF paying relatively modest income. That low yield is typical for growth‑oriented, large‑cap US‑tilted portfolios, where companies often reinvest cash rather than paying high dividends. For investors focused mainly on long‑term growth rather than immediate income, this is perfectly fine and can be quite efficient. The total return still comes from both price gains and dividends. However, someone relying on their portfolio for regular cash flow might find this payout level a bit lean. In that case, introducing a small allocation to higher‑yielding, income‑oriented holdings—without overdoing it—could create a better match with income needs while keeping growth potential in play.

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