Balanced portfolio with a strong focus on stock ETFs and an innovative touch of Bitcoin

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Balanced Investors

This portfolio suits an investor with a moderate to high risk tolerance, seeking growth through a mix of traditional equity investments and alternative assets. The ideal investor is likely comfortable with market volatility, especially from the cryptocurrency allocation, and has a long-term investment horizon to ride out market fluctuations. This profile fits someone looking to diversify their holdings beyond traditional stocks and bonds, incorporating newer asset classes like digital currencies for potential higher returns.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    70.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%
  • iShares Bitcoin Trust
    IBIT - US46438F1012
    10.00%

This portfolio is predominantly invested in stock ETFs, with a substantial 70% in a Total Stock Market Index Fund, 20% in an International Stock Index Fund, and an intriguing 10% allocation to a Bitcoin Trust. This structure indicates a balanced approach, leaning towards growth with a diversification strategy that includes a significant exposure to cryptocurrencies as an alternative investment. The blend of broad market and international ETFs provides a solid foundation, while the Bitcoin allocation introduces a higher risk-reward component.

Warning Historical data is limited for this portfolio, which reduces the confidence in the calculated values.

Growth Info

With a historical Compound Annual Growth Rate (CAGR) of 23.14% and a maximum drawdown of -18.56%, the portfolio has demonstrated strong performance with relatively controlled dips. The days that make up 90% of returns being concentrated in just 14.0 days highlight the impact of significant market movements on performance. This volatility underscores the importance of staying invested over the long term to capture key growth spurts.

Warning Due to limited historical data, this may show extreme values that are not realistic.

Projection Info

Utilizing Monte Carlo simulations, which project future performance based on historical data, the portfolio shows a wide range of outcomes. With a median projected increase of 3,245.1% and 997 out of 1,000 simulations indicating positive returns, the projections suggest a strong potential for growth. However, it's crucial to remember that these simulations are speculative and depend heavily on past market behaviors, which may not predict future movements accurately.

Asset classes Info

  • Stocks
    89%
  • Other
    10%
  • Cash
    1%
  • No data
    0%

The allocation across asset classes with 89% in stocks and 10% in 'Other' (primarily Bitcoin) indicates a high-growth strategy. This composition reflects a moderate to aggressive risk tolerance, balancing traditional equity investments with the high volatility and potential high returns of cryptocurrency. The minimal cash holding suggests a full investment strategy, aiming to maximize market participation.

Sectors Info

  • Technology
    27%
  • Financials
    14%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

The sectoral allocation reveals a heavy emphasis on technology (27%), followed by financial services (14%) and consumer cyclicals (10%). This tech-heavy tilt is common in modern portfolios, given the sector's significant growth in recent years. However, it also introduces sector-specific risks, particularly in volatile market conditions or during regulatory changes affecting tech companies.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographic exposure is predominantly North American (71%), with diversified but smaller allocations across developed Europe, Asia, and other regions. This distribution underscores a focus on the stability and growth potential of developed markets, while still capturing some emerging market exposure. For a more globally diversified approach, increasing allocations to underrepresented regions could be considered.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    27%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The market capitalization breakdown shows a preference for larger companies (Mega 38%, Big 27%), which tend to be more stable and less volatile than their smaller counterparts. Medium, small, and micro-cap stocks collectively make up 24%, introducing growth potential and volatility. This mix supports a balanced growth strategy with a tilt towards stability.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.31%

The dividend yields from the stock ETFs contribute to the portfolio's total income, with a combined yield of 1.31%. While not the primary focus of this growth-oriented portfolio, these dividends provide a steady income stream, which can be reinvested to compound growth or provide liquidity.

Ongoing product costs Info

  • iShares Bitcoin Trust 0.12%
  • 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) 0.04%

The total expense ratio (TER) of 0.04% is impressively low, maximizing the potential for net returns. Keeping costs low is crucial for long-term investment success, as even small differences in fees can significantly impact compound growth over time. This portfolio benefits from the cost-efficiency of ETFs, particularly those tracking broad market indices.

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.

When considering optimization using the Efficient Frontier, this portfolio appears well-positioned for its risk-return profile. However, continuous evaluation is necessary to ensure that the allocation remains optimal as market conditions and the investor's personal circumstances change. Adjusting the balance between traditional equities and alternative investments like Bitcoin could further enhance risk-adjusted returns.

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