Balanced and broadly diversified portfolio leaning heavily on US equities with low costs

Report created on Jun 8, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is structured around three Vanguard ETFs, focusing predominantly on US equities, which constitute 80% of the total investment. The remaining 20% is allocated to international stocks, offering a degree of global exposure. This composition reflects a strategic balance between the pursuit of growth through the S&P 500 and Total Stock Market Index Funds and diversification via the Total International Stock Index Fund. The exclusive selection of ETFs simplifies the portfolio, making it accessible and relatively easy to manage.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.43%, with a maximum drawdown of -34.23%. This performance suggests a resilient strategy during bullish markets, while also highlighting potential vulnerability during market downturns. The days contributing to 90% of returns are notably few, indicating that a handful of strong market days significantly impact overall performance. Comparing these figures to benchmarks would offer further insight into relative performance.

Projection Info

Monte Carlo simulations, which run numerous potential scenarios to forecast future performance, suggest a wide range of outcomes for this portfolio. With the majority of simulations predicting positive returns, there's an implied optimism about future growth. However, the significant spread between the 5th and 67th percentiles underscores the inherent uncertainty in these projections. It's crucial to remember that such simulations are based on historical data, and future market behavior is unpredictable.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks, with a 99% investment in equities and a minimal cash reserve. This composition underlines a growth-oriented strategy but also entails higher volatility and risk compared to portfolios with a more significant allocation to bonds or other asset classes. Diversifying across different asset classes could provide a buffer against market fluctuations.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    3%

Sector allocation is concentrated in technology, financial services, and healthcare, which together make up over half of the portfolio. This concentration in high-growth sectors may enhance returns but also increases susceptibility to sector-specific risks. A more balanced sector distribution could mitigate risk and stabilize returns across various market conditions.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic allocation is heavily weighted towards North America, with modest exposure to developed Europe and emerging markets in Asia. This geographic distribution underscores a focus on the stability and growth potential of developed markets but may limit opportunities in faster-growing emerging markets. Increasing exposure to underrepresented regions could enhance diversification and potential for growth.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    32%
  • Mid-cap
    18%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown shows a preference for mega and big-cap stocks, which account for 77% of the allocation. This focus suggests a strategy aimed at investing in established, lower-risk companies. However, incorporating more medium, small, or micro-cap stocks could offer higher growth potential, albeit with increased risk.

Redundant positions Info

  • Vanguard Total Stock Market Index Fund ETF Shares
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Vanguard Total Stock Market Index Fund ETF indicates overlapping investments, which could limit the portfolio's diversification benefits. Diversifying into assets with lower correlations might reduce risk without significantly sacrificing potential returns.

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, the portfolio could be optimized by addressing the high correlation between certain assets. By reallocating funds from overlapping investments to underrepresented sectors, regions, or asset classes, the portfolio could achieve a more favorable risk-return profile without necessarily increasing the overall risk level.

Dividends Info

  • Vanguard S&P 500 ETF 1.30%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Total International Stock Index Fund ETF Shares 2.90%
  • Weighted yield (per year) 1.62%

The portfolio's dividend yield stands at 1.62%, with the international fund contributing a higher yield. While dividends provide a steady income stream and can contribute to total returns, the focus should remain on overall portfolio growth and diversification. Reinvesting dividends could compound growth over time.

Ongoing product costs Info

  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.03%

The portfolio benefits from exceptionally low costs, with a Total Expense Ratio (TER) of 0.03%. Low costs are crucial for enhancing long-term returns, as they minimize the drag on performance. This cost efficiency is a significant strength of the portfolio.

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