A balanced portfolio with a strong focus on US equities and tech sector exposure

Report created on Feb 2, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily weighted towards US equities, with 70% in the Vanguard Total Stock Market Index Fund ETF, 20% in the Vanguard Total International Stock Index Fund ETF, and 10% in the Invesco NASDAQ 100 ETF. This composition indicates a strong tilt towards domestic stocks, particularly within the technology sector. While the portfolio is broadly diversified across sectors, the heavy US focus might limit exposure to international growth opportunities. Balancing domestic and international allocations could enhance diversification and potentially improve long-term returns.

Growth Info

Historically, this portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 13.49%. This indicates a robust growth trajectory compared to many benchmarks. However, the portfolio also experienced a maximum drawdown of -26.65%, highlighting potential vulnerabilities during market downturns. While past performance provides valuable insights, it's important to remember that it doesn't guarantee future results. Regularly reviewing performance against benchmarks can help ensure the portfolio remains aligned with investment goals.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes. With 1,000 simulations, the portfolio's annualized return is projected at 13.80%, with a 5th percentile outcome of 52.7% and a 67th percentile outcome of 564.0%. These simulations rely on historical data, which may not fully capture future market conditions. While the projections offer a glimpse into possible future performance, they should be used as one of many tools in decision-making. Regularly updating projections can help adapt to changing market conditions.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio is almost entirely composed of stocks, with 99% allocated to equities and a negligible 1% in cash. This heavy equity allocation suggests a focus on growth, but it may also increase volatility. Diversifying into other asset classes, such as bonds or real estate, could help mitigate risk and provide more stability during market fluctuations. Comparing the asset class distribution to common benchmarks can help identify areas for potential diversification.

Sectors Info

  • Technology
    30%
  • Financials
    14%
  • Consumer Discretionary
    12%
  • Health Care
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sector allocation shows a significant concentration in technology, comprising 30% of the portfolio. Other notable sectors include financial services (14%), consumer cyclicals (12%), and healthcare (10%). This tech-heavy exposure may lead to higher volatility, especially during periods of interest rate hikes or regulatory changes. Ensuring a balanced sector allocation can help manage risk and capture growth opportunities across different economic cycles. Regularly reviewing sector weights against benchmarks can maintain diversification.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly exposed to North America, with 81% of assets allocated there. This strong US focus may limit exposure to international growth prospects. While developed Europe and Asia are represented, emerging markets are underweighted, which could miss out on potential high-growth opportunities. Balancing geographic exposure can improve diversification and reduce region-specific risks. Comparing geographic allocation to global benchmarks can provide insights for potential adjustments.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization distribution leans heavily towards larger companies, with 43% in mega-cap stocks and 31% in big-cap stocks. Smaller companies, including medium (18%), small (5%), and micro-cap (2%), are underrepresented. While large-cap stocks offer stability, smaller companies can provide growth potential. Diversifying across market capitalizations can enhance risk-adjusted returns and capture opportunities across different company sizes. Regularly assessing market cap exposure against benchmarks can guide allocation adjustments.

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's current allocation could potentially be optimized using the Efficient Frontier, which seeks the best risk-return ratio based on existing assets. This optimization might involve adjusting the weights of the ETFs to achieve a more efficient balance between risk and return. While the portfolio is already well-diversified, exploring optimization can enhance performance further. Regularly revisiting asset allocations can ensure the portfolio remains aligned with risk preferences and market conditions.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.54%

The portfolio's dividend yield stands at 1.54%, with the Vanguard Total International Stock Index Fund ETF contributing the highest yield at 3.20%. Dividends can provide a steady income stream and contribute to overall returns, especially in volatile markets. While the current yield is moderate, focusing on dividend growth and reinvestment can enhance long-term returns. Ensuring a balance between growth and income-generating assets can align the portfolio with income objectives.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • 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) 0.05%

The portfolio's total expense ratio (TER) is impressively low at 0.05%, with individual fund costs ranging from 0.03% to 0.15%. Keeping costs low is crucial for maximizing long-term returns, as high fees can erode gains over time. This cost efficiency aligns well with best practices, ensuring more of the portfolio's returns are retained. Regularly reviewing and comparing fund expenses can help maintain cost-effectiveness and improve overall performance.

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