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A balanced and highly diversified portfolio with strong global exposure and moderate risk

Report created on Mar 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio is highly diversified, with a significant portion in equities (80%), complemented by bonds (10%), and other assets (12%). The Vanguard Total Stock Market Index Fund ETF holds the largest weight at 30%, reflecting a broad U.S. market exposure. Diversification is crucial as it helps mitigate risk by spreading investments across various asset classes. The portfolio aligns well with a balanced investment strategy, providing a mix of growth potential and stability. Consider maintaining this structure while periodically reviewing asset performance to ensure alignment with your financial goals.

Growth Info

Historically, this portfolio has shown a strong CAGR of 12.49%, indicating robust growth over time. However, the maximum drawdown of -32.75% highlights potential volatility during market downturns. Comparing this to a benchmark can provide context for performance expectations. While past performance is not indicative of future results, it provides valuable insights into how the portfolio might react under various market conditions. Regularly reviewing historical performance can help in making informed adjustments to the portfolio.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a 50th percentile return of 272.3% and a 67th percentile return of 427.5% over the investment horizon. These projections offer a range of potential future returns, illustrating the uncertainty inherent in investing. While simulations provide a helpful framework for understanding potential outcomes, they rely on historical data and assumptions that may not hold in the future. It's important to use these projections as one of many tools in decision-making, rather than as definitive predictions.

Asset classes Info

  • Stocks
    80%
  • Bonds
    10%
  • Other
    7%
  • Cash
    4%

The portfolio's asset class allocation is predominantly in stocks (80%), with smaller allocations to bonds (10%) and alternatives like commodities and gold (12%). This distribution supports diversification and aligns with a balanced risk profile. Stocks provide growth potential, while bonds and alternatives offer stability and inflation protection. Comparing this allocation to benchmarks can help ensure it meets your risk tolerance and investment goals. Regularly revisiting asset class weights can optimize the portfolio's risk-return balance.

Sectors Info

  • Financials
    17%
  • Technology
    13%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Energy
    6%
  • Basic Materials
    6%
  • Health Care
    5%
  • Telecommunications
    5%
  • Consumer Staples
    5%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocation is well-diversified, with significant exposure to financial services (17%), technology (13%), and industrials (11%). This balance helps mitigate sector-specific risks while capturing growth opportunities across various industries. A tech-heavy portfolio might experience volatility during interest rate hikes, while financials could benefit from economic recovery. Aligning sector weights with broader market trends can enhance performance. Periodically reviewing sector allocation ensures it remains aligned with market conditions and your investment strategy.

Regions Info

  • North America
    51%
  • Europe Developed
    14%
  • Asia Emerging
    6%
  • Japan
    3%
  • Asia
    2%
  • Latin America
    2%
  • Africa/Middle East
    1%
  • Australasia
    1%

Geographic allocation shows a strong focus on North America (51%), with notable exposure to Europe (14%) and emerging markets (9%). This distribution provides diversification benefits and reduces reliance on any single region. Comparing geographic exposure to benchmarks can highlight potential over- or under-exposures. While U.S. markets have performed well recently, global diversification can mitigate regional risks and capture growth in other economies. Regularly assessing geographic allocation can help maintain a balanced risk profile.

Market capitalization Info

  • Mega-cap
    24%
  • Small-cap
    16%
  • Large-cap
    15%
  • Mid-cap
    14%
  • Micro-cap
    11%

The portfolio's market capitalization is diverse, with significant exposure to mega (24%) and small (16%) caps. This mix offers a blend of stability and growth potential. Mega caps provide stability, while small caps can offer higher growth but with increased volatility. Comparing market cap exposure to benchmarks ensures alignment with your risk tolerance and investment goals. Periodic reviews of market cap distribution can optimize risk-return dynamics and capitalize on market opportunities.

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.

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The portfolio's risk-return profile can be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio. This involves adjusting asset weights to achieve maximum returns for a given level of risk. While optimization can improve efficiency, it relies on current assets and allocations. It's important to balance optimization with diversification goals and risk tolerance. Regularly reviewing and adjusting asset weights can enhance portfolio efficiency and support long-term objectives.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.90%
  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 4.40%
  • WisdomTree Europe Hedged Equity Fund 2.90%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.30%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 2.13%

With a total dividend yield of 2.13%, this portfolio provides a modest income stream. Dividends contribute to total returns and can offer stability during market fluctuations. High-yielding assets, like the Schwab Emerging Markets ETF (4.40%), enhance income potential. Comparing dividend yields to benchmarks can inform decisions on income versus growth priorities. Regularly reviewing dividend contributions ensures they align with your financial goals and risk tolerance, balancing income and growth needs.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • abrdn Bloomberg All Commodity Strategy K-1 Free ETF 0.26%
  • Schwab Fundamental Emerging Markets Large Company Index ETF 0.39%
  • SPDR Gold MiniShares 0.10%
  • WisdomTree Europe Hedged Equity Fund 0.58%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.21%

The portfolio's total expense ratio (TER) of 0.21% is impressively low, supporting better long-term performance by minimizing costs. Lower fees mean more of your investment returns remain in your portfolio. Comparing costs to industry averages ensures competitive pricing. While cost is an important factor, it should be balanced with other considerations like asset quality and diversification. Continuously monitoring and managing costs can enhance net returns and support financial goals.

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