A balanced and broadly diversified portfolio with a strong focus on global stocks

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 balanced risk tolerance, seeking growth while willing to accept moderate levels of volatility. The investor likely has a long-term horizon, allowing them to ride out market fluctuations and benefit from the compounding of returns. The broad diversification across sectors and geographies indicates a preference for a well-rounded approach to capturing global equity growth, making it ideal for those who prefer a set-and-forget strategy but still want exposure to international markets.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    60.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    40.00%

This portfolio, comprising 60% Vanguard Total Stock Market Index Fund ETF Shares and 40% Vanguard Total International Stock Index Fund ETF Shares, showcases a balanced approach with a tilt towards global diversification. The allocation between U.S. and international stocks is designed to capture growth across a wide range of markets, mitigating risks associated with regional economic downturns. This broad diversification across major sectors and geographic regions aligns well with a balanced risk profile, aiming for steady growth while managing volatility.

Growth Info

Historically, this portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.41%, with a maximum drawdown of -34.49%. These figures indicate a resilient performance through market cycles, balancing growth and risk effectively. The days contributing most significantly to returns highlight the portfolio's ability to capitalize on key market movements. Comparing this performance against a benchmark balanced portfolio could provide further insights into its relative strengths.

Projection Info

Monte Carlo simulations, using historical data to forecast future performance, suggest a wide range of outcomes with a median increase of 284.4%. While these projections offer valuable insights, it's crucial to remember that they are based on past trends, which may not accurately predict future market behavior. The high percentage of simulations with positive returns underscores the portfolio's potential for growth, but investors should remain cognizant of inherent uncertainties in market predictions.

Asset classes Info

  • Stocks
    98%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The portfolio's asset allocation is heavily weighted towards stocks (98%), with a minimal cash holding. This composition is appropriate for investors seeking growth over the long term, as equities historically outperform other asset classes in such scenarios. However, the lack of fixed income or alternative investments may limit opportunities to reduce volatility or hedge against stock market downturns.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    12%
  • Consumer Discretionary
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation within this portfolio is well-diversified, covering technology, financial services, industrials, and healthcare as the leading sectors. This distribution mirrors the broader market and is indicative of a strategy aiming to capitalize on growth across various economic segments. However, the heavy weighting in technology and financial services sectors may expose the portfolio to sector-specific risks.

Regions Info

  • North America
    63%
  • Europe Developed
    16%
  • Asia Emerging
    6%
  • Japan
    6%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic exposure is broad, with a significant emphasis on North America (63%) and notable allocations to developed Europe and emerging Asian markets. This global spread helps mitigate the risk of regional economic downturns and capitalizes on growth opportunities worldwide. However, the portfolio may benefit from increased exposure to emerging markets and underrepresented regions for even greater diversification.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    30%
  • Mid-cap
    18%
  • Small-cap
    5%
  • Micro-cap
    1%

The portfolio's focus on mega and big-cap stocks (73% combined) suggests a preference for established, large companies likely to offer stability and steady growth. Medium, small, and micro caps, although less represented, provide potential for higher growth at increased risk. This market cap distribution aligns with the portfolio's balanced risk profile but could be adjusted to meet specific risk tolerance or growth objectives.

Dividends Info

  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 1.84%

The portfolio's average dividend yield of 1.84% contributes to its total return, providing a steady income stream in addition to potential capital gains. This yield is a balance between the higher dividends from international stocks and the lower yields typical of U.S. equities. For income-focused investors, this aspect of the portfolio's performance may be particularly appealing.

Ongoing product costs Info

  • 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%

With a total expense ratio (TER) of 0.04%, the portfolio benefits from exceptionally low costs, enhancing long-term returns. Low costs are crucial for investment efficiency, as they allow a greater portion of the portfolio's gains to compound over time. This competitive cost structure is a significant strength, particularly in comparison to actively managed funds with higher fees.

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.

The portfolio's current allocation suggests an efficient balance between risk and return, potentially positioning it near the Efficient Frontier. This concept indicates the portfolio is optimized to achieve the highest possible returns for its level of risk. However, continuous review and adjustment in response to changing market conditions or personal financial goals are essential for maintaining this optimization.

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