Balanced and diversified global portfolio with a strong Canadian presence

Report created on Dec 21, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is composed of two ETFs: Vanguard FTSE Global All Cap ex Canada Index ETF (70%) and Vanguard FTSE Canada All Cap (30%). This structure offers a balanced exposure to global and Canadian markets. By holding a significant portion in a global ETF, the portfolio captures international growth opportunities, while the Canadian ETF provides stability and familiarity. Compared to a typical balanced portfolio, this one leans more towards equities, which may increase growth potential but also exposes it to higher volatility. Consider whether this equity-heavy allocation aligns with your risk tolerance and investment goals.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.06%, indicating robust performance. This growth rate is impressive, especially considering the max drawdown of -29.72%, which reflects the largest peak-to-trough decline. The portfolio's ability to recover from downturns is crucial for long-term investors. However, it's essential to remember that past performance doesn't guarantee future results. Comparing this performance to benchmarks can provide further insights into its relative success. Continue monitoring performance regularly to ensure it meets your expectations.

Projection Info

The Monte Carlo simulation, a method using historical data to project future outcomes, indicates a 50th percentile return of 282.21%, with 988 of 1,000 simulations showing positive returns. This suggests a strong likelihood of achieving substantial growth. However, simulations are based on historical data, which may not predict future market conditions accurately. Use these projections as a guide, but remain flexible to adapt your strategy as needed. Regularly review your portfolio's alignment with your financial goals to ensure it remains on track.

Asset classes Info

  • US Equity
    45%
  • Stocks
    30%

The portfolio's allocation is heavily skewed towards equities, with US Equity at 45.39% and other equities at 29.91%. This focus on equities suggests a growth-oriented approach, which is suitable for investors seeking capital appreciation. However, it also implies higher volatility, especially during market downturns. The minimal allocation to cash and other asset classes may limit liquidity and defensive positioning. To enhance diversification, consider incorporating more fixed-income assets or other asset classes that can provide stability and income.

Sectors Info

  • Financials
    21%
  • Technology
    20%
  • Industrials
    12%
  • Consumer Discretionary
    9%
  • Energy
    8%
  • Health Care
    8%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Utilities
    3%
  • Real Estate
    3%

The portfolio is well-diversified across sectors, with notable allocations in Financial Services (20.78%) and Technology (20.13%). This sectoral balance aligns with common benchmarks, indicating a well-rounded approach. However, the concentration in these sectors may lead to increased sensitivity to economic cycles and tech industry trends. Consider the potential impacts of economic shifts on these sectors. Regularly review sector performance and adjust allocations as necessary to maintain a balanced risk-return profile.

Regions Info

  • North America
    76%
  • Europe Developed
    10%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

With 75.71% exposure to North America, the portfolio is heavily weighted towards this region, which may limit geographic diversification. While this focus can benefit from the stability of developed markets, it also exposes the portfolio to regional risks. The limited exposure to emerging markets and other regions suggests potential missed opportunities for growth. To enhance geographic diversification, consider increasing allocations to underrepresented regions, which can provide exposure to different economic cycles and growth drivers.

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.

Portfolio optimization using the Efficient Frontier, which seeks the best risk-return ratio, suggests potential for improvement. This method focuses on reallocating current assets to achieve optimal efficiency, rather than adding new assets. While the portfolio is already well-diversified, minor adjustments could enhance its risk-return profile. Consider rebalancing periodically to ensure your portfolio remains on the Efficient Frontier, maximizing returns for a given level of risk.

Dividends Info

  • Vanguard FTSE Canada All Cap 2.00%
  • Vanguard FTSE Global All Cap ex Canada Index ETF 1.10%
  • Weighted yield (per year) 1.37%

The portfolio's overall dividend yield is 1.37%, with the Vanguard FTSE Canada All Cap ETF contributing a higher yield of 2.0%. Dividends provide a steady income stream, which can be especially beneficial during market downturns. However, the relatively low overall yield may not be sufficient for income-focused investors. If generating income is a priority, consider increasing allocations to higher-yielding assets or funds. Regularly review dividend policies and yields to ensure they align with your income needs.

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