Balanced and globally diversified portfolio with a strong focus on developed markets
Report created on Oct 14, 2025Risk profile
4/7
Diversification profile
4/5
Positions
-
SP SPDR® Portfolio S&P 500 ETF
SPLG - US78464A8541 60.00% -
IE iShares Core MSCI EAFE ETF
IEFA - US46432F8427 40.00%
This portfolio is characterized by its simplicity and focus on developed markets, comprising 60% in a U.S.-based ETF and 40% in an international ETF excluding the U.S. The allocation between these two ETFs demonstrates a strategic balance between domestic and international exposure, aiming to capture growth across major developed markets. This approach is in line with the portfolio's balanced risk classification, designed to offer a blend of growth and stability.
Growth
Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.72%, with a maximum drawdown of -33.77%. This performance suggests a resilient growth trajectory over time, despite periods of significant market volatility. The days contributing most to returns highlight the impact of short-term market movements on overall performance. Comparing this to benchmark indices could provide further context on its relative performance.
Projection
Monte Carlo simulations, using 1,000 iterations, forecast a wide range of potential outcomes for this portfolio. The key percentiles indicate a lower-end growth of 43.7% and a median growth of 357.6%, with the majority of simulations (982 out of 1,000) showing positive returns. This suggests a high probability of future gains, though it's crucial to remember that these projections are based on past data and cannot guarantee future results.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, with no exposure to other asset classes such as bonds or commodities. This full equity allocation aligns with its balanced risk profile but leans towards a higher risk and return potential. Diversifying across different asset classes could further mitigate risk and smooth out returns over time.
Sectors
- Technology 26%
- Financials 17%
- Industrials 12%
- Consumer Discretionary 10%
- Health Care 10%
- Telecommunications 8%
- Consumer Staples 6%
- Basic Materials 3%
- Energy 3%
- Utilities 3%
- Real Estate 2%
Sector allocation within the portfolio covers a broad spectrum, with significant weightings in technology, financial services, and industrials. This sectoral distribution reflects a growth-oriented strategy, albeit with concentrated exposure to sectors that may exhibit higher volatility. Balancing sector exposure can help manage risk and capitalize on opportunities across the entire market.
Regions
- North America 60%
- Europe Developed 25%
- Japan 10%
- Australasia 3%
- Asia Developed 2%
The geographic distribution emphasizes North America and developed European markets, alongside notable allocations to Japan and Australasia. This developed market focus is prudent for investors seeking stability and growth, though the lack of emerging markets exposure might limit potential high-growth opportunities. Incorporating emerging markets could enhance diversification and growth prospects.
Market capitalization
- Mega-cap 47%
- Large-cap 33%
- Mid-cap 17%
- Small-cap 2%
With 47% in mega-cap, 33% in big-cap, and 17% in mid-cap stocks, the portfolio is skewed towards larger, more established companies. This aligns with its balanced risk approach, as larger companies often provide stability. However, increasing exposure to small and micro-cap stocks could offer higher growth potential, albeit with increased risk.
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 demonstrates a well-thought-out balance between risk and return, potentially situated near the Efficient Frontier. This suggests the portfolio is optimized for the highest possible return at its given level of risk. However, continuous review and adjustment are essential to maintain this optimization, especially as market conditions change.
Dividends
- iShares Core MSCI EAFE ETF 3.00%
- SPDR® Portfolio S&P 500 ETF 1.20%
- Weighted yield (per year) 1.92%
The dividend yield of the portfolio averages 1.92%, with the international ETF contributing a higher yield than its U.S. counterpart. This yield contributes to the portfolio's total return, offering a steady income stream in addition to potential capital gains. Investors should consider the role of dividends in their overall return expectations and income needs.
Ongoing product costs
- iShares Core MSCI EAFE ETF 0.07%
- SPDR® Portfolio S&P 500 ETF 0.02%
- Weighted costs total (per year) 0.04%
The portfolio benefits from low total expense ratios (TER), averaging 0.04%, which is favorable for long-term growth. Lower costs directly translate to higher net returns for investors, making this an efficient portfolio from a cost perspective. Maintaining a focus on cost efficiency is vital for enhancing long-term investment outcomes.
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