A balanced portfolio with strong U.S. focus and moderate risk aiming for efficient growth

Report created on Jan 5, 2025

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 heavily invested in U.S. large-cap and value ETFs, with a significant portion in growth ETFs. This composition aligns with a balanced investment strategy, offering a mix of stability and growth potential. Compared to common benchmarks, the portfolio has a higher emphasis on large-cap equities, which can provide consistent returns but may limit exposure to high-growth opportunities. To enhance diversification, consider incorporating more international or alternative asset classes, which could offer different growth dynamics and risk profiles.

Growth Info

Historically, the portfolio has delivered a solid Compound Annual Growth Rate (CAGR) of 9.3%, indicating robust performance over time. This is comparable to broad market indices, suggesting effective asset selection and management. However, with a maximum drawdown of -23.72%, the portfolio has experienced significant volatility. While past performance is not indicative of future results, understanding these trends can help manage expectations. To mitigate potential downturns, consider strategies like dollar-cost averaging or increasing defensive asset allocations.

Projection Info

Using a Monte Carlo simulation, which models potential future outcomes based on historical data, the portfolio shows a median projected return of 138.23%. This suggests a strong potential for growth, though outcomes vary widely, with some simulations indicating negative returns. It's important to note that such simulations are not predictive but provide a range of possibilities. To better align with your goals, periodically review the portfolio to ensure it remains on track, adjusting for any significant market changes or personal circumstances.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is overwhelmingly concentrated in equities, with stocks comprising nearly 100% of the holdings. This high equity exposure can drive growth but also increases vulnerability to market volatility. Compared to typical balanced portfolios, which often include a mix of bonds and cash, this allocation may lack the stability provided by fixed-income assets. To achieve a more diversified risk profile, consider adding bonds or other asset classes, which can help cushion against stock market fluctuations and provide steady income.

Sectors Info

  • Technology
    19%
  • Financials
    16%
  • Industrials
    14%
  • Consumer Discretionary
    13%
  • Health Care
    9%
  • Energy
    7%
  • Telecommunications
    6%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is well-diversified across sectors, though it leans towards technology, financial services, and industrials. This sectoral spread aligns closely with market benchmarks, offering balanced exposure to different economic segments. However, the tech-heavy allocation may introduce higher volatility, especially during periods of regulatory changes or interest rate hikes. To maintain stability, regularly assess sector performance and consider rebalancing to ensure alignment with long-term goals, potentially increasing exposure to defensive sectors like healthcare or utilities.

Regions Info

  • North America
    80%
  • Europe Developed
    11%
  • Japan
    6%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Asia Developed
    1%

Geographic exposure is predominantly in North America, accounting for 80% of the portfolio. This concentration aligns with the strong performance of U.S. markets but may limit diversification benefits. Compared to global benchmarks, the portfolio has underexposure to emerging markets, which can offer high growth potential albeit with higher risk. To enhance geographic diversification, consider increasing allocations to regions like Asia or Latin America, which could provide opportunities for growth and help mitigate regional economic risks.

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 could be optimized for better risk-return efficiency, potentially increasing expected returns to 11.46% without raising risk levels. The Efficient Frontier concept suggests that portfolios can be adjusted for maximum returns given a certain risk. However, this optimization is based on current holdings and may not account for other goals like diversification. Regularly review and adjust allocations to ensure the portfolio remains efficient, considering both risk and return objectives, and aligning with personal investment strategies.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.30%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.10%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • iShares MSCI EAFE Growth ETF 0.90%
  • iShares Morningstar Mid-Cap Growth ETF 0.60%
  • iShares Morningstar Mid-Cap Value ETF 1.70%
  • Vanguard Mega Cap Value Index Fund ETF Shares 2.30%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • SPDR® S&P 600 Small Cap Growth ETF 0.80%
  • Weighted yield (per year) 1.58%

The portfolio's dividend yield stands at 1.58%, providing a modest income stream. This yield is relatively low compared to income-focused portfolios, reflecting a greater emphasis on growth rather than income generation. Dividends can offer a steady return, particularly in volatile markets, and reinvesting them can enhance long-term growth. If income is a priority, consider increasing allocations to higher-yielding assets or dividend-focused ETFs, which can supplement returns and provide a buffer against capital market fluctuations.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iShares MSCI EAFE Growth ETF 0.36%
  • iShares Morningstar Mid-Cap Growth ETF 0.06%
  • iShares Morningstar Mid-Cap Value ETF 0.06%
  • Vanguard Mega Cap Value Index Fund ETF Shares 0.07%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • SPDR® S&P 600 Small Cap Growth ETF 0.15%
  • Weighted costs total (per year) 0.15%

The portfolio's total expense ratio (TER) is 0.15%, which is impressively low and supports long-term performance by minimizing cost drag. This aligns well with best practices for cost-efficient investing, ensuring more of the portfolio's returns are retained. Low costs are a significant advantage, particularly in compounding returns over time. While the current cost structure is optimal, periodically review fees to ensure they remain competitive, and consider replacing any higher-cost funds with similar, lower-cost alternatives if available.

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