A balanced portfolio with strong US exposure and low-cost diversified ETFs

Report created on Jan 6, 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 composed of three Vanguard ETFs, with a significant allocation to the Vanguard Total Stock Market Index Fund ETF Shares at 70%. The Vanguard Total International Stock Index Fund ETF Shares make up 20%, while the Vanguard Total Bond Market Index Fund ETF Shares account for 10%. Compared to common benchmarks, this composition leans heavily on equities, which is typical for a balanced portfolio aiming for growth. The inclusion of international equities and bonds adds diversification, reducing risk. To further optimize, consider reviewing the balance between domestic and international equities to ensure alignment with your investment goals.

Growth Info

Historically, the portfolio has shown a strong Compound Annual Growth Rate (CAGR) of 11%, which indicates robust growth over time. The maximum drawdown of -32.38% highlights potential volatility, reflecting the inherent risk of equity-heavy portfolios. This performance aligns well with balanced benchmarks, providing confidence in its historical resilience. However, it's essential to remember that past performance doesn't guarantee future results. Monitoring market conditions and adjusting asset allocations accordingly can help in maintaining desired performance levels.

Projection Info

Forward projections using Monte Carlo simulations provide insights into potential future outcomes. With 1,000 simulations, the portfolio shows an annualized return of 7.26% and a 67th percentile projection of 200.66% growth. This suggests a favorable outlook, though it's important to note that simulations rely on historical data and assumptions. They can't predict exact future performance but offer a range of possibilities. Regularly reassessing the portfolio based on changing economic conditions and personal goals is advisable to stay on track.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The portfolio is primarily composed of stocks (89.45%), with a smaller allocation to bonds (9.85%) and minimal cash holdings. This allocation provides a strong growth potential due to the high equity exposure, which is typical for balanced portfolios seeking moderate risk and return. Compared to benchmark norms, the bond allocation is slightly lower, which might increase volatility but also potential returns. To enhance diversification, consider slightly increasing bond exposure or exploring alternative asset classes that align with your risk tolerance.

Sectors Info

  • Technology
    24%
  • Financials
    14%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Industrials
    9%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    2%

The sector allocation is well-diversified, with technology taking the lead at 24.17%, followed by financial services and healthcare. This distribution closely matches common benchmarks, indicating a balanced approach across sectors. A technology-heavy allocation can lead to higher volatility, especially during market shifts like interest rate changes. It's beneficial to regularly review sector weights and adjust as necessary to maintain diversification and align with economic trends and personal investment goals.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

The portfolio has a strong geographic bias towards North America, with 71.27% exposure, followed by smaller allocations to Europe and Asia. This concentration aligns with benchmarks but might limit exposure to growth opportunities in emerging markets. While North American dominance provides stability, diversifying geographically could enhance returns and reduce risk. Consider increasing exposure to underrepresented regions to take advantage of global growth trends and further diversify the portfolio.

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 is well-positioned on the Efficient Frontier, indicating an optimal risk-return balance given the current assets. This means the portfolio is using its resources effectively to achieve the best possible returns for its level of risk. While diversification is strong, periodically reassessing asset weights can further enhance efficiency. Consider minor adjustments to the allocation to maintain or improve this balance as market conditions and personal goals evolve.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.40%
  • Weighted yield (per year) 1.96%

The portfolio's overall dividend yield is 1.96%, primarily driven by the bond ETF with a 3.7% yield. Dividends can provide a steady income stream, which is beneficial for balanced portfolios. While the stock ETFs offer lower yields, they contribute to growth. Depending on your income needs, consider adjusting the weight towards higher dividend-paying assets or reinvesting dividends to enhance long-term growth. This approach can help achieve a balance between income and capital appreciation.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.04%

The portfolio benefits from impressively low costs, with a total expense ratio (TER) of 0.04%. Low costs are a significant advantage, as they enhance long-term returns by reducing the drag on performance. Vanguard's reputation for low-cost investing supports this portfolio's efficiency. Continue monitoring for any changes in fund fees and consider switching to similar lower-cost options if available. Keeping costs low is crucial for maximizing net returns over time.

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