Balanced Portfolio with Strong Dividend Focus and Moderate Geographic Diversification

Report created on Nov 25, 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 composed of a mix of ETFs and a single stock, with a strong focus on U.S. equities. This balance of asset types suggests a moderately diversified approach, with a slightly higher allocation in stocks. The inclusion of various dividend-focused ETFs indicates a preference for income generation. This composition aligns with a balanced risk profile, offering potential growth while aiming to mitigate volatility. To improve diversification, consider increasing exposure to non-U.S. markets and other asset classes, such as bonds or real estate, to balance the equity-heavy focus.

Growth Info

Historically, the portfolio has demonstrated a solid performance with a CAGR of 10.83%, indicating consistent growth over time. However, it also experienced a significant max drawdown of -34.8%, highlighting potential vulnerability during market downturns. The concentration of returns in just 26 days suggests periods of high volatility. To enhance stability, consider diversifying into less volatile asset classes. Balancing growth and risk can be achieved by maintaining a diversified mix, ensuring that the portfolio can withstand market fluctuations and sustain long-term growth.

Projection Info

Using a Monte-Carlo simulation with 1,000 iterations, the portfolio shows a promising future with an annualized return of 11.17%. The simulation projects a range of outcomes, with a 5th percentile return of 21.59% and a 67th percentile return of 397.15%, indicating potential for significant growth. With 984 simulations showing positive returns, the portfolio appears well-positioned for the future. While these projections are encouraging, maintaining diversification and periodically reviewing asset allocation can help manage risk and capitalize on growth opportunities.

Asset classes Info

  • Stocks
    86%
  • Real Estate
    7%
  • Bonds
    7%

The portfolio is predominantly invested in stocks, making up 85.71% of the total allocation. Real estate and bonds also have a presence, but to a lesser extent. This allocation reflects a growth-oriented strategy with some diversification. The limited bond exposure suggests a focus on capital appreciation rather than income stability. Consider increasing bond allocation to provide a buffer during market downturns. A more balanced mix of asset classes can help achieve a smoother return profile and reduce overall portfolio risk.

Sectors Info

  • Technology
    15%
  • Real Estate
    15%
  • Financials
    13%
  • Health Care
    9%
  • Industrials
    9%
  • Consumer Staples
    8%
  • Consumer Discretionary
    7%
  • Energy
    6%
  • Telecommunications
    4%
  • Utilities
    4%
  • Basic Materials
    3%

The portfolio covers a wide range of sectors, with significant allocations in technology, real estate, and financial services. This sector diversity helps mitigate sector-specific risks and provides exposure to different economic drivers. However, there is a noticeable concentration in technology and real estate, which may increase vulnerability to sector-specific downturns. To improve resilience, consider balancing the sector allocations by increasing exposure to underrepresented sectors. A well-rounded sector allocation can enhance the portfolio's ability to adapt to changing market conditions.

Regions Info

  • North America
    87%
  • Europe Developed
    3%
  • Asia Emerging
    1%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, with 86.73% of the allocation. This concentration in U.S. assets suggests a strong home bias, potentially limiting exposure to international growth opportunities. While the U.S. market offers stability and growth, diversifying into other regions can provide access to emerging markets and reduce geopolitical risks. Consider increasing exposure to Europe, Asia, and other regions to enhance diversification and capture global economic growth potential.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Vanguard Small-Cap Value Index Fund ETF Shares
    Vanguard Russell 1000 Growth Index Fund ETF Shares
    Vanguard Mid-Cap Value Index Fund ETF Shares
    iShares Core High Dividend ETF
    Schwab U.S. Dividend Equity ETF
    Vanguard Dividend Appreciation Index Fund ETF Shares
    Vanguard High Dividend Yield Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    iShares Core Dividend Growth ETF
    ProShares S&P 500 Dividend Aristocrats ETF
    High correlation

The portfolio contains several highly correlated assets, particularly among U.S. equity ETFs. This correlation indicates that these assets tend to move in the same direction, which can limit diversification benefits. Reducing overlap by selecting complementary assets with lower correlations can enhance diversification and reduce overall portfolio risk. Consider incorporating assets with different market behaviors or those that are less correlated with the current holdings. This approach can help create a more resilient portfolio capable of weathering diverse market conditions.

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.

Before optimizing, focus on reducing overlapping assets that offer no diversification benefits due to high correlations. Adjusting the portfolio along the efficient frontier can help achieve a riskier or more conservative profile. For a riskier portfolio, consider increasing equity exposure while maintaining diversification. For a more conservative approach, increase bond allocation to reduce volatility. Prioritize diversification and alignment with financial goals before making significant changes to the portfolio's composition. This strategic approach can enhance performance and stability over the long term.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.60%
  • iShares Core Dividend Growth ETF 2.10%
  • iShares Core High Dividend ETF 3.30%
  • ProShares S&P 500 Dividend Aristocrats ETF 2.00%
  • Realty Income Corp 5.40%
  • Schwab U.S. Dividend Equity ETF 3.40%
  • Vanguard Small-Cap Value Index Fund ETF Shares 1.90%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard Real Estate Index Fund ETF Shares 3.80%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 2.00%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.60%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 3.00%
  • Vanguard High Dividend Yield Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 2.51%

The portfolio has a strong dividend focus, with a total yield of 2.51%. This income-generating aspect is supported by various dividend-focused ETFs and the inclusion of Realty Income Corp, which offers a high yield of 5.4%. This strategy provides a steady income stream, appealing to investors seeking regular cash flow. However, it's important to balance dividend yield with growth potential. Consider periodically reviewing the dividend strategy to ensure alignment with overall financial goals and to maintain a balance between income and capital appreciation.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • iShares Core Dividend Growth ETF 0.08%
  • iShares Core High Dividend ETF 0.08%
  • ProShares S&P 500 Dividend Aristocrats ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Small-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard Mid-Cap Value Index Fund ETF Shares 0.07%
  • Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
  • Weighted costs total (per year) 0.08%

The portfolio maintains a low cost structure, with a total expense ratio of 0.08%. This low-cost approach maximizes returns by minimizing fees, a crucial factor in long-term investment success. The selection of cost-effective ETFs supports this strategy, allowing for efficient portfolio management. While keeping costs low is beneficial, it's also important to ensure that the chosen assets align with investment goals and risk tolerance. Regularly reviewing the portfolio's cost structure and performance can help maintain cost efficiency and optimize returns.

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