A balanced portfolio with strong U.S. focus and limited international diversification

Report created on Mar 22, 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 consists primarily of equity ETFs, with a 90% allocation to stocks and 10% to gold. This structure leans heavily on equities, providing growth potential but also exposure to market volatility. Compared to a typical balanced portfolio, which might include more bonds, this portfolio is more aggressive. Consider diversifying further by adding fixed-income assets to stabilize returns during market downturns.

Growth Info

Historically, the portfolio has performed well, with a CAGR of 12.59%, indicating strong growth. However, it also experienced a maximum drawdown of -23.72%, reflecting significant volatility. Compared to common benchmarks, the growth is impressive, but the risk is higher. To mitigate potential downturns, consider holding a cash reserve or diversifying into less volatile assets.

Projection Info

The Monte Carlo simulation projects a wide range of potential outcomes, with a median growth of 399.6%. This tool uses historical data to estimate future performance but has limitations, as past performance doesn't guarantee future results. The high median suggests robust growth potential, but diversification into other asset classes could reduce uncertainty and improve risk-adjusted returns.

Asset classes Info

  • Stocks
    90%
  • Other
    10%

The allocation is heavily skewed towards stocks, with 90% in equities and 10% in gold. While equities offer growth, the lack of fixed-income assets can increase volatility. Compared to balanced benchmarks, this portfolio is less diversified. To improve stability, consider adding bonds or other fixed-income assets to balance equity exposure and enhance diversification.

Sectors Info

  • Technology
    29%
  • Financials
    12%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Industrials
    7%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Energy
    3%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The portfolio is tech-heavy, with 29% in technology, which can lead to higher volatility, especially during interest rate fluctuations. Other sectors like financial services and healthcare provide some balance, but the concentration in tech is notable. Diversifying into underrepresented sectors like utilities or real estate might reduce sector-specific risks and improve resilience.

Regions Info

  • North America
    89%
  • Europe Developed
    1%

With 89% in North America, the portfolio is concentrated geographically, limiting exposure to international markets. This focus can be a strength in a strong U.S. market but poses risks if the U.S. underperforms. Consider increasing exposure to developed and emerging markets to benefit from global growth opportunities and reduce reliance on the U.S. economy.

Market capitalization Info

  • Large-cap
    35%
  • Mega-cap
    34%
  • Mid-cap
    16%
  • No data
    10%
  • Small-cap
    4%
  • Micro-cap
    1%

The portfolio is well-diversified across market capitalizations, with a focus on big and mega caps, which are typically more stable. However, small and micro caps, which offer potential for higher returns, are underrepresented. To enhance growth potential, consider increasing exposure to smaller companies while balancing the risk with larger, more stable firms.

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 using the Efficient Frontier, focusing on the best risk-return ratio. This involves adjusting current asset allocations to achieve maximum returns for a given risk level. It's important to note that optimization is based on existing assets and doesn't consider adding new ones, so explore potential reallocations within the current holdings.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Schwab U.S. Dividend Equity ETF 2.80%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.70%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Weighted yield (per year) 1.24%

The portfolio's dividend yield is 1.24%, with contributions from various funds. Dividends provide a steady income stream, beneficial for income-focused investors. However, the yield is modest compared to income-focused portfolios. To increase income, consider reallocating to higher-yielding assets or funds without sacrificing growth potential.

Ongoing product costs Info

  • SPDR® Gold Shares 0.40%
  • Invesco NASDAQ 100 ETF 0.15%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.10%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.10%. This cost efficiency supports long-term performance by minimizing fees. Compared to typical portfolios, this is a strong advantage. Continue monitoring expense ratios to ensure they remain competitive, as higher costs can erode returns over time.

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