A balanced and highly diversified portfolio focusing on steady growth and income

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 seeking balanced growth with moderate risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining exposure to global equities, making it ideal for individuals looking to build wealth over time. The diversification across sectors and geographies, coupled with a solid foundation in bonds, caters to those who appreciate a prudent approach to risk while aiming for consistent growth.

Positions

  • SPDR® Portfolio S&P 500 ETF
    SPLG - US78464A8541
    40.00%
  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    20.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    20.00%
  • iShares Core U.S. Aggregate Bond ETF
    AGG - US4642872265
    10.00%
  • Vanguard Mortgage-Backed Securities Index Fund ETF Shares
    VMBS - US92206C7719
    10.00%

The portfolio is structured with a strong emphasis on equities, comprising 80% of the allocation, split between U.S. and international stocks, and a 20% allocation to bonds, providing a balanced approach to growth and income. This composition aligns well with a balanced risk profile, aiming to capture the growth potential of the stock market while mitigating risk through bond investments. The inclusion of both U.S. and international ETFs enhances diversification, reducing the impact of regional market volatility.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 10.27%, with a maximum drawdown of -28.86%. These numbers indicate a solid performance, balancing growth with risk management. The days contributing to 90% of returns highlight the portfolio's ability to capitalize on market upswings efficiently. However, it's crucial to remember that past performance is not indicative of future results, and investors should consider long-term trends and economic cycles.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of potential outcomes, suggest a median annualized return of 7.93%. This projection, while informative, should be approached with caution as it cannot predict unforeseen market shifts or global events that could impact performance. Such simulations are valuable for understanding potential volatility and assessing risk tolerance alignment.

Asset classes Info

  • Stocks
    79%
  • Bonds
    20%
  • Cash
    1%
  • Other
    0%
  • No data
    0%

The asset allocation of 79% in stocks and 20% in bonds, with a minimal cash holding, is indicative of a balanced strategy that leans towards growth. This mix aims to strike a balance between seizing growth opportunities in the equity market and cushioning against volatility with bond investments. It's a well-considered approach for those with a medium-term investment horizon and a moderate risk tolerance.

Sectors Info

  • Technology
    19%
  • Financials
    12%
  • Industrials
    8%
  • Health Care
    8%
  • Consumer Discretionary
    8%
  • Consumer Staples
    7%
  • Energy
    6%
  • Telecommunications
    6%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    1%

The sectoral allocation shows a diversified exposure across various industries, with a notable emphasis on technology and financial services. This diversification helps in spreading risk and capitalizing on growth across different sectors of the economy. However, the significant weight in technology suggests a higher volatility potential, which should be monitored, especially in market downturns.

Regions Info

  • North America
    61%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographic exposure is predominantly North American, with a reasonable spread across developed European markets and emerging markets in Asia. This geographic diversification supports risk management by not over-relying on a single market's performance. However, the portfolio could benefit from increased exposure to emerging markets and Asia Developed regions to capitalize on growth opportunities outside the mature markets.

Market capitalization Info

  • Large-cap
    32%
  • Mega-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    2%
  • Micro-cap
    0%

The market capitalization breakdown reveals a focus on big and mega-cap stocks, which are typically less volatile and offer steady growth. This focus aligns with the portfolio's balanced risk profile. However, a modest allocation to medium, small, and micro-cap stocks could enhance potential returns, albeit with increased risk.

Dividends Info

  • iShares Core U.S. Aggregate Bond ETF 3.80%
  • Schwab U.S. Dividend Equity ETF 3.80%
  • SPDR® Portfolio S&P 500 ETF 1.20%
  • Vanguard Mortgage-Backed Securities Index Fund ETF Shares 4.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.60%

The dividend yields across the ETFs contribute to the portfolio's income, complementing capital gains from equity growth. With a total yield of 2.60%, the portfolio offers an attractive income stream, particularly from the bond ETFs, which is beneficial for investors seeking regular income alongside capital appreciation.

Ongoing product costs Info

  • iShares Core U.S. Aggregate Bond ETF 0.03%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Vanguard Mortgage-Backed Securities Index Fund ETF Shares 0.04%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.04%

The portfolio's overall expense ratio is impressively low, averaging 0.04%, which is beneficial for long-term growth as lower costs translate to higher net returns. This cost efficiency is crucial in maximizing investment returns, especially in a low-interest-rate environment where every basis point in cost savings matters.

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 Efficient Frontier analysis suggests that the current asset allocation is close to optimal for the given risk-return profile. However, continuous monitoring and occasional rebalancing are recommended to maintain this efficiency, especially in response to significant market changes. This optimization process ensures the portfolio remains aligned with the investor's goals and risk tolerance.

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