Balanced portfolio with a strong focus on US equities and diversified income streams

Report created on Aug 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

Your portfolio is heavily weighted towards US equities, particularly with a significant allocation in the Schwab S&P 500 Index Fund. This suggests a strategy focused on capturing the growth of large-cap US companies. The presence of both dividend-focused ETFs and target date funds indicates a balanced approach to growth and income, aiming for long-term capital appreciation while also generating current income. This composition aligns with a balanced risk profile but leans towards a domestic bias, limiting international exposure.

Growth Info

The historical performance, with a Compound Annual Growth Rate (CAGR) of 18.74%, demonstrates strong past returns, albeit with a notable max drawdown. This suggests that while the portfolio has been successful in capturing upward market movements, it's also susceptible to significant declines during market downturns. The days contributing most to returns highlight the impact of short-term volatility. Comparing this to benchmarks, it's essential to consider the balance between risk and reward.

Projection Info

Monte Carlo simulations project a wide range of outcomes, with the median scenario significantly outperforming the initial investment. This forward-looking analysis, while based on historical data, underscores the portfolio's potential for substantial growth. However, it's crucial to remember that such simulations are hypothetical and do not guarantee future results. They are useful for understanding potential volatility and assessing risk tolerance.

Asset classes Info

  • Stocks
    90%
  • Cash
    7%
  • No data
    2%
  • Bonds
    1%

Your portfolio's heavy allocation to stocks, with minimal positions in bonds and cash, underscores a growth-oriented strategy. While this aligns with a balanced to moderately aggressive risk profile, it's important to evaluate the minimal bond and cash holdings' role in providing stability during market volatility. Adjusting these allocations could enhance risk management without significantly detracting from growth potential.

Sectors Info

  • Technology
    29%
  • Financials
    12%
  • Health Care
    9%
  • Industrials
    8%
  • Telecommunications
    7%
  • Consumer Staples
    7%
  • Consumer Discretionary
    7%
  • Energy
    4%
  • Real Estate
    3%
  • Consumer Discretionary
    2%
  • Utilities
    2%
  • Basic Materials
    2%

The sector allocation shows a strong emphasis on technology, which, while offering high growth potential, also introduces higher volatility. The balanced presence across financial services, healthcare, and industrials suggests an attempt at diversification. However, the heavy tech weighting may increase sensitivity to sector-specific risks. Balancing sector exposures can mitigate these risks while still capturing growth opportunities.

Regions Info

  • North America
    87%
  • Europe Developed
    3%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    1%

The geographic allocation heavily favors North America, particularly the US, with minimal exposure to international markets. This concentration enhances exposure to US market growth but also increases susceptibility to domestic market downturns. Expanding into developed European markets or emerging markets could offer diversification benefits and exposure to global growth trends.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    33%
  • Mid-cap
    17%
  • Small-cap
    2%
  • Micro-cap
    1%

The focus on mega and big-cap stocks supports the portfolio's balanced risk profile by investing in established, stable companies. However, the limited exposure to medium, small, and micro-cap stocks restricts potential for high growth rates these segments can offer. Incrementally increasing exposure to smaller caps could enhance growth potential while introducing manageable risk.

Redundant positions Info

  • Vanguard Total World Stock Index Fund ETF Shares
    SCHWAB TARGET 2050 INDEX FUND INSTITUTIONAL SHARES
    SCHWAB TARGET 2060 INDEX FUND INSTITUTIONAL SHARES
    High correlation

The high correlation among the Vanguard Total World Stock Index Fund ETF Shares and both SCHWAB TARGET index funds suggests redundancy, which may not contribute to diversification. Identifying and reducing overlapping investments can streamline the portfolio, ensuring each holding contributes uniquely to its risk and return profile.

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 current portfolio shows room for optimization, especially by addressing the overlap in highly correlated assets. Removing or reducing these redundancies can improve diversification without compromising the desired risk-return profile. The suggested optimal portfolio, with an expected return slightly above the current portfolio's, indicates that minor adjustments could yield efficiency gains while maintaining the same level of risk.

Dividends Info

  • Apple Inc 0.40%
  • JPMorgan Equity Premium Income ETF 8.50%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • iShares® 0-3 Month Treasury Bond ETF 4.40%
  • SPDR Portfolio High Yield Bond 7.50%
  • Schwab S&P 500 Index Fund 6.70%
  • SCHWAB TARGET 2050 INDEX FUND INSTITUTIONAL SHARES 1.80%
  • SCHWAB TARGET 2060 INDEX FUND INSTITUTIONAL SHARES 1.70%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 5.35%

The diversified dividend yields across the portfolio contribute to its income generation, complementing capital growth. This strategy is well-suited for balanced investors seeking both income and appreciation. However, it's worth reviewing the allocation to high-dividend assets in the context of overall portfolio yield and growth objectives, ensuring a balanced approach to income and capital appreciation.

Ongoing product costs Info

  • JPMorgan Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • SPDR Portfolio High Yield Bond 0.05%
  • Schwab S&P 500 Index Fund 0.02%
  • SCHWAB TARGET 2050 INDEX FUND INSTITUTIONAL SHARES 0.08%
  • SCHWAB TARGET 2060 INDEX FUND INSTITUTIONAL SHARES 0.08%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.08%

The overall low cost of the portfolio, with a Total Expense Ratio (TER) of 0.08%, is commendable. Keeping costs low is crucial for enhancing long-term returns, especially in a balanced portfolio where the objective is to achieve steady growth without eroding gains through high fees. This cost efficiency is a strong aspect of your portfolio's construction.

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