Moderately diversified cautious portfolio with strong historical performance and moderate costs

Report created on Mar 28, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio consists of 60% stocks, 39% bonds, and 5% other assets, reflecting a balanced approach. This mix is generally well-aligned with a cautious investment profile, offering a blend of growth and stability. The portfolio's structure is moderately diversified, with a variety of ETFs and mutual funds spread across multiple asset classes. Compared to a typical benchmark, the portfolio leans slightly more toward bonds, which is consistent with a lower-risk strategy. To enhance diversification, consider increasing exposure to underrepresented asset classes or adjusting allocations to achieve a more balanced risk-return profile.

Growth Info

The portfolio has demonstrated a solid historical performance with a CAGR of 9.78%. This growth rate suggests a strong return over time, assuming a hypothetical initial investment. However, the max drawdown of -26.36% indicates potential vulnerability during market downturns. Overall, the portfolio's performance compares favorably to typical benchmarks, showcasing resilience and growth potential. While historical performance can guide future expectations, it's important to remember that past results do not guarantee future outcomes. Regularly reviewing and adjusting the portfolio can help maintain its performance.

Projection Info

The Monte Carlo simulation used for forward projection suggests a wide range of potential outcomes, with 947 of 1,000 simulations showing positive returns. The median expected return is 231.8%, with an annualized return of 10.62%. Monte Carlo analysis uses historical data to simulate future scenarios, but it's crucial to note that these projections are not predictions. They provide a probabilistic view of potential outcomes, emphasizing the inherent uncertainty in investing. Regularly reviewing projections and considering adjustments can help align the portfolio with evolving financial goals.

Asset classes Info

  • Stocks
    60%
  • Bonds
    39%
  • Other
    5%

The portfolio's allocation across asset classes includes 60% in stocks, 39% in bonds, and 5% in other assets. This distribution offers a balanced approach, aligning with a cautious investment strategy. Compared to common benchmarks, the portfolio has a higher bond allocation, which can reduce volatility and provide stability. However, the limited exposure to other asset classes may restrict potential growth opportunities. To enhance diversification, consider exploring additional asset classes or adjusting current allocations to better balance risk and return.

Sectors Info

  • Technology
    15%
  • Financials
    8%
  • Energy
    6%
  • Consumer Discretionary
    6%
  • Health Care
    6%
  • Industrials
    5%
  • Telecommunications
    5%
  • Consumer Staples
    3%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Utilities
    1%

The portfolio's sector allocation is led by technology at 15%, followed by financial services and energy. This composition aligns with common benchmarks, offering a diversified sector exposure. However, the tech-heavy allocation may lead to higher volatility during interest rate hikes. Balancing sector weights can help mitigate risks associated with sector-specific downturns. Consider monitoring sector trends and adjusting allocations to maintain diversification and align with market conditions, ensuring the portfolio remains resilient to sector-specific risks.

Regions Info

  • North America
    54%
  • No data
    10%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is concentrated in North America, representing 54% of the allocation. This focus can limit exposure to international markets, potentially missing out on global growth opportunities. While the U.S. market has historically performed well, diversifying geographically can reduce regional risks and enhance returns. Consider increasing exposure to underrepresented regions, such as emerging markets, to achieve a more balanced geographic distribution and capture potential growth in diverse economies.

Market capitalization Info

  • Mega-cap
    20%
  • Large-cap
    18%
  • Mid-cap
    13%
  • Small-cap
    6%
  • No data
    5%
  • Micro-cap
    2%

The portfolio's market capitalization is predominantly in mega and big caps, comprising 38% of the allocation. This focus on larger companies provides stability but may limit growth potential compared to smaller-cap stocks. While large-cap stocks are generally less volatile, incorporating more small and mid-cap stocks can enhance diversification and offer higher growth prospects. Consider adjusting the market cap allocation to better balance risk and return, ensuring a comprehensive exposure across different company sizes.

Redundant positions Info

  • iShares Russell 1000 Value ETF
    Vanguard Value Index Fund ETF Shares
    High correlation
  • iShares Russell 1000 Growth ETF
    Invesco QQQ Trust
    High correlation
  • iShares Russell 2000 Value ETF
    Vanguard Small-Cap Value Index Fund ETF Shares
    High correlation
  • iShares Russell 2000 Growth ETF
    Vanguard Small-Cap Growth Index Fund ETF Shares
    High correlation

The portfolio contains several highly correlated asset groups, such as the iShares Russell 1000 Value ETF and Vanguard Value Index Fund ETF Shares. High correlation means these assets tend to move together, limiting diversification benefits. In a market downturn, correlated assets may all decline simultaneously, increasing risk. To improve diversification, consider replacing some correlated assets with others that have lower correlation, thereby enhancing the portfolio's ability to withstand market volatility and 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 can be optimized using the Efficient Frontier, focusing on the best possible risk-return ratio. This involves adjusting the current asset allocation to maximize returns for a given level of risk. The Efficient Frontier is a concept that helps identify the optimal portfolio mix based on historical data. However, it's essential to note that this optimization is limited to the current assets and does not guarantee future performance. Regularly reviewing and adjusting allocations can help maintain an efficient portfolio.

Dividends Info

  • iShares Core U.S. Aggregate Bond ETF 3.70%
  • VanEck Fallen Angel High Yield Bond ETF 4.20%
  • DOUBLELINE TOTAL RETURN BOND FUND CLASS I 3.70%
  • iShares MSCI Emerging Markets ETF 0.70%
  • iShares 5-10 Year Investment Grade Corporate Bond ETF 4.40%
  • iShares Russell 1000 Value ETF 0.90%
  • iShares Russell 1000 Growth ETF 0.40%
  • iShares Russell 2000 Value ETF 1.50%
  • iShares Russell 2000 Growth ETF 0.70%
  • SPDR S&P® North American Natural Resources ETF 0.90%
  • Invesco QQQ Trust 0.50%
  • TORTOISE MLP & PIPELINE FUND INVESTOR CLASS SHARES 3.60%
  • Vanguard Small-Cap Growth Index Fund ETF Shares 0.30%
  • Vanguard Small-Cap Value Index Fund ETF Shares 1.00%
  • Vanguard Long-Term Corporate Bond Index Fund ETF Shares 5.20%
  • Vanguard Value Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 2.04%

The portfolio's dividend yield stands at 2.04%, offering a moderate income stream. Bond ETFs like the iShares 5-10 Year Investment Grade Corporate Bond ETF contribute significantly to this yield. For cautious investors, dividends can provide a steady income, enhancing overall returns. However, the focus on growth-oriented assets may limit dividend income. To increase yield, consider reallocating toward higher-dividend assets, balancing growth and income to align with financial goals and risk tolerance.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • VanEck Fallen Angel High Yield Bond ETF 0.25%
  • iShares MSCI Emerging Markets ETF 0.70%
  • SPDR® Gold Shares 0.40%
  • iShares 5-10 Year Investment Grade Corporate Bond ETF 0.04%
  • iShares Russell 1000 Value ETF 0.19%
  • iShares Russell 1000 Growth ETF 0.19%
  • iShares Russell 2000 Value ETF 0.24%
  • iShares Russell 2000 Growth ETF 0.24%
  • SPDR S&P® North American Natural Resources ETF 0.35%
  • Invesco QQQ Trust 0.20%
  • Vanguard Small-Cap Growth Index Fund ETF Shares 0.07%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Long-Term Corporate Bond Index Fund ETF Shares 0.04%
  • Vanguard Value Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.16%

The portfolio's total expense ratio (TER) is 0.16%, which is relatively low and supports better long-term performance. Keeping costs minimal is crucial, as high fees can erode returns over time. The portfolio includes several low-cost ETFs, which is commendable. However, some assets, like the iShares MSCI Emerging Markets ETF, have higher fees. Regularly reviewing and optimizing costs can further enhance net returns. Consider replacing higher-cost assets with similar, lower-cost alternatives to maintain a cost-efficient portfolio.

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