A well-structured portfolio with strong emphasis on stock market growth and conservative bond inclusion

Report created on Sep 7, 2025

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 a balance between growth and stability, with a moderate risk tolerance and a long-term investment horizon. It is designed for individuals who seek to benefit from the growth potential of the stock market while mitigating risk through bond investments. The investor likely prefers a hands-off approach, relying on broad market movements instead of picking individual stocks or timing the market.

Positions

This portfolio's composition is heavily weighted towards equities, with a 70% allocation in the Vanguard Total Stock Market Index Fund ETF Shares and a 20% allocation in the Vanguard Total International Stock Market Index Fund ETF Shares, complemented by a 10% allocation in the Vanguard Total Bond Market Index Fund ETF Shares. Such a structure indicates a balanced approach, leaning towards growth while maintaining a cushion through bonds. The high equity exposure seeks to capitalize on stock market growth, whereas the bond component offers stability and income, a classic balanced portfolio setup.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.45%, with a maximum drawdown of -32.41%. These figures reveal a robust growth trajectory, albeit with significant volatility. The days contributing to 90% of returns being limited to 32.0 days highlight the portfolio's reliance on short periods of high returns, typical of equity-heavy allocations. This performance, while impressive, underscores the importance of understanding volatility and the potential for wide fluctuations in value.

Projection Info

Monte Carlo simulations, which use historical data to project potential outcomes, suggest a median annualized return of 9.25% across 1,000 scenarios. This projection, while optimistic, also indicates variability, with a 5th percentile outcome of 11.9% growth and a 67th percentile outcome of 306.4% growth. It's crucial to note that while these simulations offer insight, they cannot guarantee future results, reflecting the inherent uncertainty in investing.

Asset classes Info

  • Stocks
    89%
  • Bonds
    10%
  • Cash
    1%

The allocation across asset classes with 89% in stocks and 10% in bonds reflects a growth-oriented strategy with a moderate risk buffer. This mix aligns with the portfolio's balanced risk profile, aiming for substantial growth through equities while using bonds to mitigate volatility. The minimal cash holding suggests full investment, a common approach for long-term growth strategies.

Sectors Info

  • Technology
    25%
  • Financials
    14%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    3%
  • Basic Materials
    3%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocations show a heavy emphasis on technology, financial services, and industrials, which are sectors often associated with growth but also with higher volatility. The presence of consumer cyclicals and healthcare adds diversification, potentially reducing risk. However, the technology sector's weight could expose the portfolio to sector-specific downturns, warranting periodic review to ensure alignment with risk tolerance.

Regions Info

  • North America
    71%
  • Europe Developed
    8%
  • Asia Emerging
    3%
  • Japan
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographic exposure is predominantly North American (71%), with developed Europe and emerging Asian markets providing international diversification. This geographic allocation supports growth potential while introducing international market risks and opportunities. The limited exposure to emerging markets and Latin America might be a missed opportunity for higher growth, albeit at increased risk.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    28%
  • Mid-cap
    17%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization exposure, with a focus on mega and big caps, suggests a preference for established, large companies known for their stability and potential for steady growth. Medium, small, and micro caps, while less represented, offer diversification and the possibility of higher returns, albeit with increased risk.

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.

Sharpe ratios in this chart use the active CMA risk-free rate of 2.00% annualized.

Click on the colored dots to explore allocations.

Considering the Efficient Frontier, this portfolio appears well-positioned for a balanced risk-return profile, but there may be room for optimization. Adjusting allocations slightly could potentially achieve a better risk-return ratio without significantly altering the portfolio's overall strategy. This adjustment process should be based on current market conditions and future outlooks, keeping in mind that "efficiency" is a moving target.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.76%

The dividend yields from the ETFs contribute to the portfolio's total income, with the bond ETF offering a higher yield, complementing the growth from equity ETFs. This income can provide a steady cash flow, which is beneficial for reinvestment or as a buffer during market downturns. The overall yield reflects a balanced approach to growth and income generation.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • 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) 0.03%

With total portfolio costs averaging at a low 0.03%, the portfolio stands out for its cost efficiency, which is crucial for enhancing long-term returns. Lower costs mean more of the investment's return is retained by the investor, a key advantage in achieving financial goals. This portfolio exemplifies the benefit of low-cost index fund investing.

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