Balanced Global Portfolio with Emphasis on Value Stocks and Low Costs

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 is well-suited for an investor with a balanced to moderately aggressive risk tolerance, looking for growth through equities while accepting some volatility. The focus on value and small-cap stocks indicates a search for opportunities beyond the market average, fitting for someone with a medium to long-term investment horizon who is comfortable with the fluctuations inherent in stock investments.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    55.00%
  • Dimensional International Value ETF
    DFIV - US25434V8072
    20.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    15.00%
  • Avantis® International Small Cap Value ETF
    AVDV - US0250728021
    10.00%

The portfolio is heavily weighted towards equities, with a significant 55% in a broad market U.S. ETF and the remainder split between international and small-cap value ETFs. This composition suggests a strategy focused on capturing market-wide returns while seeking additional growth through value-oriented and small-cap investments. The absence of bonds or alternative asset classes indicates a preference for stock market investments, aligning with a balanced to slightly aggressive risk profile.

Growth Info

Historical performance showcases a Compound Annual Growth Rate (CAGR) of 12.03%, a robust figure reflecting the portfolio's strong equity orientation. The maximum drawdown of -23.05% is within expectations for a stock-heavy portfolio, illustrating resilience during market downturns. The performance heavily relies on a few significant days, indicating volatility and the importance of staying invested through market cycles for optimal returns.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of possible outcomes, suggest a median increase of 335% in portfolio value, highlighting the potential for substantial growth. However, it's crucial to remember that these projections are speculative and depend on past market behavior, which is not a guaranteed indicator of future performance.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Bonds
    0%
  • Other
    0%

With 100% of the portfolio allocated to stocks, diversification across different asset classes is minimal. This concentration in equities can offer higher growth prospects but also increases volatility and risk. Diversifying into bonds or other asset classes could provide a buffer against stock market fluctuations, potentially leading to a smoother investment experience over time.

Sectors Info

  • Technology
    21%
  • Financials
    20%
  • Consumer Discretionary
    12%
  • Industrials
    11%
  • Energy
    7%
  • Health Care
    7%
  • Telecommunications
    7%
  • Basic Materials
    6%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation is well-diversified, with significant positions in technology and financial services, followed by consumer cyclicals and industrials. This sector spread is beneficial for mitigating sector-specific risks, although the heavy weighting in technology and financial services could lead to higher volatility in response to market or economic shifts in these sectors.

Regions Info

  • North America
    73%
  • Europe Developed
    16%
  • Japan
    8%
  • Australasia
    2%
  • Asia Developed
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Asia Emerging
    0%
  • Europe Emerging
    0%

Geographic distribution shows a strong bias towards North America (73%), with meaningful exposure to developed European markets and Japan. This allocation supports diversification but has limited exposure to emerging markets, which may offer higher growth potential albeit with increased risk. Considering a slight adjustment to include more emerging markets could enhance growth prospects and diversification.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    29%
  • Mid-cap
    19%
  • Small-cap
    11%
  • Micro-cap
    8%

The market capitalization breakdown, with a mix of mega, big, medium, small, and micro-cap stocks, contributes to diversification and potential for growth. Small and micro-cap stocks, in particular, offer high growth potential but come with increased volatility and risk, fitting the portfolio's balanced but growth-oriented strategy.

Redundant positions Info

  • Avantis® International Small Cap Value ETF
    Dimensional International Value ETF
    High correlation

The high correlation between the two international value ETFs indicates overlapping investments that may not contribute to diversification. Reducing exposure to one of these ETFs or reallocating to a different asset class or geographic region could enhance portfolio efficiency and reduce redundancy.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.60%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Dimensional International Value ETF 3.20%
  • Vanguard S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.92%

The portfolio's dividend yield of 1.92% contributes to its total return, offering a steady income stream in addition to capital appreciation. The varying yields across ETFs reflect the diverse sources of income within the portfolio, from high-yield international value stocks to lower-yield broad market ETFs.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Dimensional International Value ETF 0.27%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.14%

The overall portfolio cost, represented by a Total Expense Ratio (TER) of 0.14%, is impressively low, maximizing the potential for net returns. The low-cost Vanguard S&P 500 ETF significantly contributes to keeping expenses down, while the slightly higher costs of the value ETFs are justified by their specialized strategies.

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 configuration suggests room for optimization, particularly by addressing the overlap in international value ETFs. Adjusting the asset allocation to reduce redundancy and possibly incorporating non-correlated assets could achieve a more efficient risk-return profile, potentially increasing the expected return to 13.05% without significantly raising the risk level.

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