A secure investment strategy with a heavy tilt towards cash and minimal stock exposure
Report created on Oct 22, 2025Risk profile
1/7
Diversification profile
1/5
Positions
-
SG iShares® 0-3 Month Treasury Bond ETF
SGOV - US46436E7186 80.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 20.00%
Your portfolio is heavily weighted towards ultra-short-term treasury bonds with 80% of the allocation, while the remaining 20% is invested in a broad stock market ETF. This composition is indicative of a very conservative investment approach, prioritizing capital preservation over growth. The heavy allocation in cash equivalents significantly reduces volatility but also limits potential returns. Comparatively, this is a less common strategy for those with a long investment horizon or those seeking higher growth.
Growth
Historically, your portfolio has shown a Compound Annual Growth Rate (CAGR) of 5.73%, with a maximum drawdown of -6.93%. These figures suggest a stable performance with minimal fluctuations, aligning with the conservative risk profile. It's important to note, however, that past performance is not indicative of future results, and the low-risk approach inherently caps potential higher returns.
Projection
Monte Carlo simulations, which forecast potential future outcomes based on historical data, suggest a wide range of possible portfolio values. While the majority of simulations indicate positive returns, the conservative nature of your portfolio means potential growth is limited compared to more aggressive strategies. This method helps visualize risk but cannot predict unforeseen market shifts.
Asset classes
- Cash 80%
- Stocks 20%
The portfolio's allocation is split between cash (80%) and stocks (20%), offering a simple, straightforward approach to asset diversification. While this asset class distribution supports stability, it may not adequately capture growth opportunities during bullish market periods. Diversifying across more asset classes could enhance returns without significantly increasing risk.
Sectors
- Technology 7%
- Financials 3%
- Consumer Discretionary 2%
- Telecommunications 2%
- Health Care 2%
- Industrials 2%
- Consumer Staples 1%
- Energy 1%
Sector exposure within the stock component is diversified across technology, financial services, and consumer cyclicals, among others. This sector allocation suggests a balanced approach within the equity portion of your portfolio. However, the overall impact of these sectors on portfolio performance is limited due to the small proportion of stocks in the portfolio.
Regions
- North America 20%
Geographic exposure is concentrated in North America, specifically the United States, reflecting a home country bias. This geographic concentration could expose the portfolio to regional economic downturns. Expanding into international markets could offer improved diversification benefits and potential for higher growth.
Market capitalization
- Mega-cap 8%
- Large-cap 6%
- Mid-cap 4%
- Small-cap 1%
The equity portion of your portfolio spans mega to small-cap stocks, with a lean towards larger companies. This market cap distribution is generally seen as a conservative approach within the equity allocation, as larger companies tend to be more stable than their smaller counterparts. However, including more mid to small-cap stocks could offer higher growth potential.
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.
Considering the Efficient Frontier, your portfolio could potentially be optimized for a better risk-return ratio by diversifying across more asset classes and possibly adjusting the equity-to-cash ratio. While your current allocation minimizes risk, there may be room to slightly increase exposure to equities or other asset classes without significantly compromising the portfolio's conservative stance.
Dividends
- iShares® 0-3 Month Treasury Bond ETF 4.30%
- Vanguard Total Stock Market Index Fund ETF Shares 1.10%
- Weighted yield (per year) 3.66%
The portfolio yields a combined dividend of 3.66%, with the bond ETF contributing a higher yield due to its focus on short-term treasury bonds. While dividends contribute to total returns, the heavy weighting towards low-yielding cash equivalents dilutes the overall impact of these payments on portfolio growth.
Ongoing product costs
- iShares® 0-3 Month Treasury Bond ETF 0.07%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.06%
With a total expense ratio (TER) of 0.06%, your portfolio benefits from low costs, which is commendable. Lower costs contribute to higher net returns over time, especially important in a conservative portfolio where gross returns are naturally lower. This cost efficiency is a positive aspect of your investment strategy.
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