A growth tilted balanced portfolio with strong North American focus and notable tech concentration

Report created on Aug 21, 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 almost entirely with broad equity ETFs, led by a large S&P 500 position and a sizeable all‑equity core holding, plus a smaller EAFE fund and a tech leaders tilt. This structure leans clearly toward growth while still being labeled “balanced,” which usually implies meaningful fixed income exposure; here, cash and bonds are effectively absent. That matters because in sharp downturns, there is little natural cushion. Aligning the core with a more typical balanced mix could involve gradually adding more stabilizing assets over time, rather than shifting all at once, so the risk level matches the stated profile more closely while preserving the strong equity growth engine.

Growth Info

Historically, this mix has delivered a very strong compound annual growth rate (CAGR) of 16.35%. CAGR is just the “average yearly speed” of growth, as if the portfolio grew at a steady rate each year. For context, that’s well above long‑run returns of broad equity benchmarks, but it came with a max drawdown of about –27.7%, meaning a past peak‑to‑trough fall of more than a quarter of the portfolio’s value. This pattern—high returns with sizeable drops—is exactly what you’d expect from an equity‑heavy portfolio. It’s helpful to remember that past returns came from a mostly favorable decade; they’re not a promise of similar gains ahead.

Projection Info

The Monte Carlo analysis, which runs 1,000 simulated futures by shuffling and re‑using historical return patterns, shows a very wide range of outcomes. The median (50th percentile) scenario ends around 763% of the starting value, while the 5th percentile still ends at about 168.5%. That suggests good odds of positive long‑term growth, consistent with the portfolio’s strong equity tilt. However, Monte Carlo simply remixs past data; it assumes the future behaves statistically like history, which may not hold if regimes change. Treat these simulations as “what‑if” ranges, not predictions, and use them mainly to gauge whether you’re emotionally and financially prepared for the downside paths as well as the upside.

Asset classes Info

  • US Equity
    75%
  • Stocks
    7%

Asset‑class exposure is dominated by equities: roughly 75% in US equity plus around 7% additional equity elsewhere, with essentially no bonds and no meaningful cash buffer. That puts this portfolio closer to a growth or aggressive growth profile than many “balanced” templates, which often hold 30–50% in fixed income to dampen volatility. The upside of this tilt is higher expected long‑term growth, especially over multi‑decade horizons. The trade‑off is deeper and more frequent drawdowns. Gradually layering in a modest allocation to more defensive assets could smooth the ride, especially if the investment horizon is shorter or there’s a need to withdraw funds during market stress.

Sectors Info

  • Technology
    31%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Telecommunications
    9%
  • Industrials
    9%
  • Health Care
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is nicely spread across 11 sectors, but with a clear tilt: about 31% in technology and solid weights in financials, consumer cyclicals, communication services, and industrials. This is quite similar to many major equity benchmarks today, which are also tech‑heavy. That tech emphasis has boosted returns in recent years but can mean sharper swings when interest rates rise or growth expectations cool. On the positive side, the presence of healthcare, consumer defensive, utilities, energy, and real estate adds some balance. If the tech overweight ever feels uncomfortable, it can be dialed back incrementally by shifting a slice into more defensive or income‑oriented segments rather than making abrupt, all‑or‑nothing changes.

Regions Info

  • North America
    83%
  • Europe Developed
    10%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%
  • Asia Emerging
    1%

Geographically, the portfolio is strongly tilted to North America at 83%, with about 10% in developed Europe and small allocations to Japan and other developed and emerging Asia. This closely mirrors many global equity benchmarks that are dominated by the US, and that tilt has been very rewarding over the last decade. The flip side is that returns are heavily tied to the fortunes of North American markets and currencies, particularly the US. Expanding the share of international holdings over time could increase diversification, especially if other regions have different economic cycles. Any shift can be gradual—adding a bit more non‑North‑American exposure with new contributions rather than reshuffling existing holdings in one move.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%

Market cap exposure is focused on the largest companies, with about 46% in mega caps and 33% in big caps, 17% in mid caps, and only 2% in small caps. This closely reflects common index benchmarks and provides stability, because larger firms tend to be more diversified and less fragile than small companies. The trade‑off is less exposure to the higher‑risk, potentially higher‑return small‑cap segment that can shine in certain economic phases. For someone seeking a bit more growth and diversification, a small increase in mid‑ and small‑cap exposure—implemented through broad, low‑cost vehicles—can diversify the drivers of returns without abandoning the solid large‑cap core.

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.

On a risk‑return chart, called the Efficient Frontier, each mix of these existing ETFs would have a certain expected volatility and return. “Efficiency” here means getting the best possible return for a given level of risk, using only these current ingredients. Given the strong equity bias and overlap, there may be slightly more efficient mixes—perhaps with a touch less concentration in any single region or style—that deliver similar expected return with a bit lower volatility. However, even now the portfolio sits in a reasonably efficient zone for a growth‑oriented approach. Fine‑tuning would be about small allocation tweaks, not wholesale changes, and should always be weighed against simplicity and ease of maintenance.

Dividends Info

  • TD Global Technology Leaders Index ETF 0.10%
  • Vanguard S&P 500 Index ETF 0.50%
  • iShares Core MSCI EAFE IMI 0.90%
  • iShares Core Equity Portfolio 0.90%
  • Weighted yield (per year) 0.62%

The portfolio’s total yield sits around 0.62%, which is quite low compared with income‑oriented portfolios but typical for growth‑focused equity strategies, especially with a tech tilt. Dividends are the cash payments companies make to shareholders; they can provide a steady income stream and help cushion returns when prices are flat or falling. Here, most of the expected return is coming from price growth, not cash payouts. That aligns well with long‑term capital growth goals rather than current income needs. If at some point steady cash flow becomes more important—say, approaching retirement—shifting a portion toward higher‑yielding equities or income‑focused assets could help balance growth with ongoing payouts.

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