Balanced Portfolio with Strong Historical Performance and Moderate Diversification Across Sectors and Geographies

Report created on Dec 4, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio is mainly composed of three ETFs, with iShares Core Equity Portfolio and Vanguard S&P 500 Index ETF making up over 95% of the allocation. This indicates a strong concentration in these funds, which can provide robust exposure to a broad market index. However, such concentration may limit the benefits of diversification. It's vital to understand that while ETFs offer diversification within themselves, heavily relying on a few can expose the portfolio to specific market risks. Consider diversifying with additional asset classes or funds to spread risk more effectively.

Growth Info

Historically, the portfolio has performed well, achieving a compound annual growth rate (CAGR) of 14.41%. This impressive performance highlights the potential for substantial returns, but it's essential to remember past performance doesn't guarantee future results. The portfolio's maximum drawdown of -21.4% suggests moderate risk exposure, which aligns with its balanced risk classification. Investors should weigh the potential for high returns against the possibility of significant losses. Maintaining a diversified approach can help manage risk while aiming for continued growth.

Projection Info

Using a Monte Carlo simulation, which predicts future performance by modeling a range of outcomes, the portfolio shows promising potential. With a hypothetical initial investment, the median projection suggests a 746.93% increase, while even the lower end at the 5th percentile shows positive returns. This indicates a high likelihood of growth over time. However, the variability in outcomes underscores the importance of considering risk tolerance and investment horizon. Regularly reviewing and adjusting the portfolio can help align with changing market conditions and personal goals.

Asset classes Info

  • US Equity
    74%
  • Stocks
    12%

The portfolio is predominantly invested in US equity, making up 74% of the allocation, with a smaller portion in general equity. This concentration in equities can drive growth but also increases exposure to market volatility. A small allocation in cash and other asset classes provides some stability, though it's minimal. Balancing equity exposure with other asset classes like bonds could reduce volatility and enhance stability. This approach can help achieve a more consistent performance, especially during market downturns.

Sectors Info

  • Technology
    28%
  • Financials
    16%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    5%
  • Basic Materials
    4%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio's sector allocation is heavily weighted towards technology, financial services, and consumer cyclicals. While this can capitalize on growth in these areas, it also exposes the portfolio to sector-specific risks. A more balanced sector allocation can help mitigate these risks and provide a steadier performance across varying economic conditions. Consider diversifying into underrepresented sectors to achieve a more even distribution, which can help protect against downturns in any single sector.

Regions Info

  • North America
    86%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Emerging
    1%
  • Asia Developed
    1%
  • Australasia
    1%

Geographically, the portfolio is significantly concentrated in North America, accounting for over 86% of its allocation. While this provides exposure to stable markets, it limits the benefits of international diversification. Including more geographic regions can reduce reliance on North American markets and potentially capture growth in emerging markets. Diversifying geographically can also hedge against region-specific economic downturns, offering a more balanced global exposure.

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 optimization chart suggests potential for improvement by adjusting the asset allocation along the efficient frontier. This involves finding the optimal balance between risk and return, which can be achieved by diversifying into more asset classes or sectors. For those seeking a riskier portfolio, increasing equity exposure might be considered, while a more conservative approach could involve adding bonds. It's important to align any changes with personal risk tolerance and financial goals, ensuring the portfolio remains on track for desired outcomes.

Dividends Info

  • Invesco NASDAQ 100 Index ETF CAD Units 0.40%
  • Vanguard S&P 500 Index ETF 0.70%
  • iShares Core Equity Portfolio 1.50%
  • Weighted yield (per year) 1.07%

The portfolio's dividend yield stands at 1.07%, with the iShares Core Equity Portfolio contributing the most. While dividends provide a steady income stream, the overall yield is relatively modest. Investors seeking higher income might consider increasing exposure to dividend-focused investments. However, it's crucial to balance income needs with growth objectives. Diversifying into higher-yielding assets can enhance income but may also introduce additional risk. Evaluate the trade-offs to align with long-term financial goals.

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