A balanced portfolio focusing on US equities with minimal diversification across other asset classes

Report created on Jan 1, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

The portfolio is heavily weighted towards the Vanguard Total Stock Market Index Fund ETF Shares, making up 80% of the holdings. This significant allocation to a single ETF suggests a strong focus on US equities. The remaining 20% is distributed among the Direxion Auspice Broad Commodity Strategy ETF, iShares® 0-3 Month Treasury Bond ETF, and WisdomTree Bloomberg U.S. Dollar Bullish Fund. This composition indicates a preference for growth through equity exposure, with some diversification into commodities, short-term bonds, and currency. A more balanced allocation across different asset classes could enhance diversification and risk management.

Growth Info

Historically, the portfolio has performed well, achieving a compound annual growth rate (CAGR) of 15.1%. This impressive return suggests that the portfolio has benefited from favorable market conditions, particularly in the US stock market. However, the maximum drawdown of -20.18% highlights potential volatility and risk, especially during market downturns. Comparing this performance to a diversified benchmark could provide insights into whether the high returns justify the associated risks. Maintaining awareness of market cycles and adjusting allocations accordingly may help mitigate future drawdowns.

Projection Info

The Monte Carlo simulation, which uses historical data to project potential future outcomes, shows a wide range of possible returns. With a 50th percentile return of 243.75% and an annualized return of 9.55%, the projections suggest a favorable outlook. However, it's important to note that these simulations are based on past data and assumptions, which may not hold true in the future. While the projections are optimistic, considering potential changes in market conditions and adjusting the portfolio as needed can help align with future goals.

Asset classes Info

  • Stocks
    80%
  • Cash
    15%
  • Bonds
    5%

The portfolio's asset class distribution shows a dominant allocation to stocks at nearly 80%, with smaller portions in cash and bonds. This allocation aligns with a growth-oriented strategy but may lack the diversification benefits of a more balanced mix of asset classes. By incorporating additional asset classes, such as international equities or alternative investments, the portfolio could potentially reduce risk and enhance returns. Aligning asset class weights with broader benchmarks could provide a more diversified approach.

Sectors Info

  • Technology
    25%
  • Financials
    11%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Industrials
    7%
  • Telecommunications
    7%
  • Consumer Staples
    4%
  • Energy
    3%
  • Real Estate
    2%
  • Utilities
    2%
  • Basic Materials
    2%

Sector allocation reveals a concentration in technology at 24.62%, followed by financial services and healthcare. This tech-heavy focus could lead to increased volatility, especially during periods of regulatory changes or economic shifts affecting the sector. While these sectors have driven growth, a more balanced sector allocation could mitigate risks associated with overexposure. Exploring opportunities in underrepresented sectors may provide additional stability and growth potential, aligning the portfolio with broader market trends.

Regions Info

  • North America
    80%

The portfolio is overwhelmingly exposed to North American markets, with 79.62% of assets allocated there. This geographic concentration may limit the benefits of global diversification, which can help mitigate region-specific risks and capture opportunities in other markets. By increasing exposure to international markets, such as Europe, Asia, and emerging markets, the portfolio could achieve greater diversification and potentially enhance returns. A more balanced geographic allocation could also align with global economic growth trends.

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 may not be fully optimized along the Efficient Frontier, which seeks the best risk-return ratio. While the focus on US equities has driven growth, adjusting allocations among existing assets could enhance efficiency. Exploring alternative allocations that balance risk and return more effectively can help achieve investment goals. Utilizing tools like the Efficient Frontier can guide these adjustments, ensuring the portfolio is well-positioned for future market conditions.

Dividends Info

  • Direxion Auspice Broad Commodity Strategy ETF 3.30%
  • iShares® 0-3 Month Treasury Bond ETF 5.10%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.62%

The portfolio's dividend yield stands at 1.62%, with contributions from the Direxion Auspice Broad Commodity Strategy ETF, iShares® 0-3 Month Treasury Bond ETF, and Vanguard Total Stock Market Index Fund ETF Shares. While dividends provide a steady income stream, the current yield is relatively modest. For investors seeking higher income, exploring additional dividend-paying assets or funds could enhance yield. Balancing growth and income objectives is crucial to meet long-term financial goals.

Ongoing product costs Info

  • Direxion Auspice Broad Commodity Strategy ETF 0.80%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • WisdomTree Bloomberg U.S. Dollar Bullish Fund 0.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is 0.13%, which is impressively low and supports better long-term performance by minimizing costs. The Vanguard Total Stock Market Index Fund ETF Shares, with a TER of 0.03%, contributes significantly to this cost efficiency. Keeping costs low is beneficial for compounding returns over time. Continuously monitoring and comparing expense ratios across similar funds can ensure that the portfolio remains cost-effective and aligned with investment objectives.

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