Balanced portfolio with a strong focus on US equities and moderate diversification

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 looking for balanced growth with a moderate risk tolerance. It's designed for those with a long-term investment horizon who prefer a mix of steady returns and capital appreciation. The investor likely values a combination of income and growth, with a preference for well-established, large-cap companies, primarily in the technology sector and the US market.

Positions

  • SPDR Bridgewater All Weather ETF
    ALLW
    50.00%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    25.00%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    25.00%

This portfolio is structured around three ETFs, with a significant allocation to the SPDR Bridgewater All Weather ETF at 50%, suggesting a balanced approach to asset allocation. The remaining half is equally divided between the Invesco NASDAQ 100 ETF and the Vanguard S&P 500 ETF, highlighting a strong focus on US equities. This composition reflects a strategy that leans towards growth while attempting to mitigate risk through diversification across asset classes and sectors.

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

Growth Info

The portfolio has shown an impressive Compound Annual Growth Rate (CAGR) of 29.55%, with a maximum drawdown of -11.12%. This performance suggests a favorable balance between risk and return, with the portfolio demonstrating resilience during market downturns. The days contributing to 90% of returns indicate that the portfolio's gains are concentrated in specific periods, highlighting the importance of staying invested over the long term to capture these spikes.

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

Projection Info

A Monte Carlo analysis with 1,000 simulations projects a wide range of potential outcomes, with a median end portfolio value indicating substantial growth. This forward-looking projection, while based on historical data, underscores the importance of understanding that past performance is not indicative of future results. It provides a probabilistic look at how the portfolio might perform, offering insights into potential risks and rewards.

Asset classes Info

  • Stocks
    61%
  • Bonds
    28%
  • Cash
    10%
  • Other
    2%
  • No data
    0%

The asset allocation—61% in stocks, 28% in bonds, and 11% in cash and other—shows a balanced approach. This mix aims to capture growth through equities while using bonds and cash to provide stability and reduce volatility. The presence of a significant cash allocation could be seen as a buffer against market downturns or an opportunity for future investments.

Sectors Info

  • Technology
    35%
  • Financials
    12%
  • Consumer Discretionary
    12%
  • Telecommunications
    11%
  • Industrials
    9%
  • Health Care
    7%
  • Consumer Staples
    5%
  • Energy
    2%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    1%

With technology making up 35% of the portfolio, followed by financial services and consumer cyclicals, the sector allocation suggests a growth-oriented strategy. However, this tech-heavy focus may introduce higher volatility, especially during market corrections or interest rate hikes. Diversification across other sectors like healthcare and industrials helps mitigate this risk to some extent.

Regions Info

  • North America
    72%
  • Europe Developed
    16%
  • Asia Emerging
    9%
  • Asia Developed
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%
  • Australasia
    0%

The geographic allocation is heavily weighted towards North America (72%), with smaller exposures to developed Europe and emerging Asia. This concentration in the US market is consistent with the portfolio's ETF selections but may limit global diversification benefits. Expanding into underrepresented regions could enhance exposure to global growth opportunities and reduce geographic concentration risk.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    19%
  • Mid-cap
    8%
  • Small-cap
    0%
  • Micro-cap
    0%

The exposure to mega (30%) and big (19%) cap stocks, with minimal to no investment in small or micro caps, aligns with the portfolio's balanced risk profile. This capitalization distribution suggests a preference for established, less volatile companies, although incorporating smaller cap investments could offer higher growth potential and further diversification.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Invesco NASDAQ 100 ETF
    High correlation

The high correlation between the Vanguard S&P 500 ETF and the Invesco NASDAQ 100 ETF indicates overlapping exposures, particularly in large-cap technology stocks. This redundancy limits the portfolio's diversification benefits, making it more susceptible to sector-specific downturns. Addressing this overlap could enhance the portfolio's risk-adjusted returns.

Dividends Info

  • Invesco NASDAQ 100 ETF 0.50%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 0.40%

The portfolio's dividend yield, driven by the Invesco NASDAQ 100 and Vanguard S&P 500 ETFs, contributes to its total return. While not the primary focus, these dividends provide a steady income stream, which can be reinvested to compound growth or used as income. Balancing growth and income-generating assets is key to meeting long-term financial goals.

Ongoing product costs Info

  • Invesco NASDAQ 100 ETF 0.15%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.04%

The portfolio's costs are relatively low, with Total Expense Ratios (TER) for the ETFs contributing to an overall efficient cost structure. Lower costs mean more of the portfolio's returns are retained by the investor, enhancing long-term growth potential. This efficiency is a positive aspect, especially in a low-yield environment.

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 stands to benefit from an optimization process focused on reducing highly correlated assets. This would not only streamline the portfolio but also improve diversification. Utilizing the Efficient Frontier concept could help in identifying an asset mix that offers the best potential return for a given level of risk, enhancing the portfolio's overall efficiency.

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