A conservative portfolio with a strong focus on bonds and minimal sector diversification

Report created on Aug 7, 2025

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

Positions

This portfolio is predominantly composed of bonds (55%) and stocks (38%), with a small allocation to gold (7%). The heavy weighting towards Vanguard Long-Term Treasury and Intermediate-Term U.S. Treasury ETFs indicates a conservative stance, aiming to mitigate risk through government securities. However, the portfolio's diversification is limited, focusing mainly on a few asset classes and sectors, which could expose it to specific market risks.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 6.78%, with a maximum drawdown of -23.89%. These figures suggest a relatively stable performance, with the bonds providing a cushion against market volatility. However, the significant drawdown indicates potential vulnerability during market downturns, emphasizing the importance of understanding the balance between risk and return.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario suggesting an 180.2% increase. While 972 out of 1,000 simulations resulted in positive returns, indicating a high likelihood of profit, the reliance on historical data means these projections cannot guarantee future performance. Investors should consider this uncertainty in their long-term planning.

Asset classes Info

  • Bonds
    55%
  • Stocks
    38%
  • Other
    7%
  • Cash
    1%

The allocation across asset classes with a heavy emphasis on bonds suggests a conservative approach, aiming for steady returns with reduced volatility. However, the limited exposure to stocks and other asset classes might limit growth potential, especially in bull markets. Diversifying across more asset classes could enhance returns while managing risk.

Sectors Info

  • Technology
    9%
  • Utilities
    9%
  • Financials
    4%
  • Consumer Discretionary
    3%
  • Health Care
    3%
  • Industrials
    3%
  • Telecommunications
    3%
  • Consumer Staples
    2%
  • Energy
    1%
  • Real Estate
    1%
  • Basic Materials
    1%

Sectoral allocation is concentrated, with a notable presence in technology and utilities but minimal exposure to other sectors. This concentration could lead to higher volatility if these sectors underperform. Diversifying across a broader range of sectors could reduce risk and tap into growth opportunities in different areas of the economy.

Regions Info

  • North America
    38%

The portfolio's geographic allocation is heavily skewed towards North America (38%), with no exposure to international markets. This concentration increases vulnerability to regional economic downturns and misses out on potential gains from global diversification. Expanding into international markets could provide a buffer against local market fluctuations and offer access to growth in emerging economies.

Market capitalization Info

  • Mega-cap
    12%
  • Large-cap
    12%
  • Mid-cap
    11%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization distribution shows a balanced exposure across mega, big, and medium-sized companies, with limited investments in small and micro-cap stocks. This balance is suitable for conservative investors seeking stability, though incorporating more small and micro-cap stocks could offer higher growth potential at the cost of increased volatility.

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 current allocation appears to be on the conservative side of the Efficient Frontier, prioritizing risk reduction over potential returns. While this is suitable for a conservative investment strategy, there may be room to optimize the risk-return profile without significantly increasing volatility, such as by adjusting the asset class and sector allocations.

Dividends Info

  • Fidelity® MSCI Utilities Index ETF 2.60%
  • Schwab Intermediate-Term U.S. Treasury ETF 3.80%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 4.40%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 2.90%

The portfolio's dividend yield of 2.90% contributes to its total return, offering a steady income stream. This yield is particularly appealing for conservative investors seeking regular income. However, focusing solely on yield could overlook growth opportunities; balancing high-yield investments with growth-oriented assets might optimize returns.

Ongoing product costs Info

  • Fidelity® MSCI Utilities Index ETF 0.08%
  • SPDR Gold Mini Shares 0.10%
  • Schwab Intermediate-Term U.S. Treasury ETF 0.03%
  • Vanguard Long-Term Treasury Index Fund ETF Shares 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.04%

With an overall portfolio cost (Total Expense Ratio, TER) of 0.04%, the portfolio is efficiently managed in terms of expenses. Low costs are crucial for long-term growth, as they directly enhance net returns. This portfolio exemplifies cost-effective management, a practice that should be maintained or improved upon when possible.

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