Balanced portfolio with a strong focus on dividends and US equities

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 best suited for an investor with a balanced risk tolerance, seeking a mix of growth and income. The emphasis on dividend-yielding stocks and the presence of bonds and real estate indicate a preference for steady income alongside capital appreciation. Such an investor likely has a medium to long-term investment horizon, allowing for participation in equity market growth while mitigating short-term volatility through income-generating assets.

Positions

  • Schwab U.S. Dividend Equity ETF
    SCHD - US8085247976
    21.47%
  • JPMorgan Equity Premium Income ETF
    JEPI - US46641Q3323
    18.60%
  • Schwab U.S. Large-Cap Growth ETF
    SCHG - US8085243009
    16.49%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    13.34%
  • JPMorgan Nasdaq Equity Premium Income ETF
    JEPQ - US46654Q2030
    10.07%
  • Vanguard Real Estate Index Fund ETF Shares
    VNQ - US9229085538
    5.19%
  • iShares TIPS Bond ETF
    TIP - US4642871762
    5.05%
  • Vanguard International High Dividend Yield Index Fund ETF Shares
    VYMI - US9219467944
    4.97%
  • Vanguard Total Bond Market Index Fund ETF Shares
    BND - US9219378356
    4.82%

This portfolio is predominantly invested in U.S. equities, with a substantial allocation towards dividend-focused ETFs. The presence of both growth and income-generating assets, alongside a smaller but significant bond and real estate exposure, suggests a strategy aimed at balancing growth with income stability. The diversification is moderate, leaning heavily on the U.S. market, which may limit global diversification benefits but aligns with the investor's risk profile and regional preference.

Growth Info

Historically, this portfolio has delivered a Compound Annual Growth Rate (CAGR) of 10.59%, with a maximum drawdown of -15.49%. These figures indicate a resilient performance, particularly given the drawdown, which reflects the portfolio's ability to recover from market downturns. The days contributing to 90% of returns highlight the impact of significant market movements on performance. Comparing these metrics against benchmarks would further contextualize performance, especially in terms of risk-adjusted returns.

Projection Info

Monte Carlo simulations, employing thousands of hypothetical scenarios to project future performance, suggest a wide range of outcomes for this portfolio. With a median projected increase of 227.5% and a high percentage of simulations predicting positive returns, the outlook appears favorable. However, the reliance on historical data means these projections cannot guarantee future performance, especially as market conditions evolve.

Asset classes Info

  • Stocks
    81%
  • Bonds
    10%
  • Real Estate
    5%
  • No data
    4%
  • Cash
    0%
  • Other
    0%

The allocation across asset classes with a dominant 81% in stocks, followed by bonds at 10%, and a smaller real estate exposure at 5%, is reflective of a balanced approach with a tilt towards growth. This mix supports a strategy aimed at long-term wealth accumulation while using bonds and real estate to provide income and reduce volatility. Comparing these allocations to a balanced benchmark could help in assessing the appropriateness of the risk level.

Sectors Info

  • Technology
    24%
  • Financials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    7%
  • Industrials
    7%
  • Real Estate
    6%
  • Energy
    6%
  • Utilities
    2%
  • Basic Materials
    1%

Sector allocations show a significant emphasis on technology, financial services, and consumer cyclicals, which may drive growth but also introduce sector-specific risks. The portfolio's sector distribution mirrors broader market trends, favoring areas with potential for innovation and growth. However, the concentration in technology could expose the portfolio to higher volatility, suggesting a review of sector exposures might be prudent to ensure alignment with the investor's risk tolerance.

Regions Info

  • North America
    85%
  • Europe Developed
    3%
  • Japan
    1%
  • Asia Emerging
    0%
  • Asia Developed
    0%
  • Australasia
    0%
  • Latin America
    0%
  • Africa/Middle East
    0%
  • Europe Emerging
    0%

With 85% of assets allocated to North America, the portfolio's geographic exposure is heavily skewed towards the U.S. market. While this concentration may capitalize on the robust U.S. economy, it also limits exposure to potential growth in other regions. Diversifying into developed and emerging markets outside the U.S. could enhance growth prospects and reduce geopolitical and currency risks.

Market capitalization Info

  • Large-cap
    35%
  • Mega-cap
    28%
  • Mid-cap
    20%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization breakdown, with a focus on big and mega-cap stocks, underscores a preference for stability and established companies. This bias towards larger companies, which are often less volatile than their smaller counterparts, aligns with the portfolio's balanced risk profile. However, incorporating a broader mix of medium to small-cap stocks could introduce growth potential and further diversification benefits.

Redundant positions Info

  • Vanguard S&P 500 ETF
    Schwab U.S. Large-Cap Growth ETF
    JPMorgan Nasdaq Equity Premium Income ETF
    High correlation

The high correlation among several U.S. equity ETFs suggests redundancy in the portfolio, which may not contribute to diversification effectively. This overlap, particularly between S&P 500 and large-cap growth ETFs, indicates an opportunity to streamline the portfolio by reducing similar holdings, potentially enhancing diversification without significantly altering the risk profile.

Dividends Info

  • Vanguard Total Bond Market Index Fund ETF Shares 3.80%
  • JPMorgan Equity Premium Income ETF 8.50%
  • JPMorgan Nasdaq Equity Premium Income ETF 10.60%
  • Schwab U.S. Dividend Equity ETF 3.90%
  • Schwab U.S. Large-Cap Growth ETF 0.40%
  • iShares TIPS Bond ETF 2.90%
  • Vanguard Real Estate Index Fund ETF Shares 4.00%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 4.00%
  • Weighted yield (per year) 4.43%

The portfolio's focus on dividend-yielding assets, with an overall yield of 4.43%, highlights an income-generating strategy that complements capital appreciation goals. This approach not only provides a steady income stream but also may offer a cushion during market downturns. Reviewing dividend performance in relation to total return could provide insights into the balance between income generation and growth.

Ongoing product costs Info

  • Vanguard Total Bond Market Index Fund ETF Shares 0.03%
  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • iShares TIPS Bond ETF 0.19%
  • Vanguard Real Estate Index Fund ETF Shares 0.12%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard International High Dividend Yield Index Fund ETF Shares 0.22%
  • Weighted costs total (per year) 0.15%

The portfolio's average total expense ratio (TER) of 0.15% is impressively low, enhancing net returns over the long term. This cost efficiency is crucial in maximizing investment returns, especially in a low-yield environment. Regularly monitoring and comparing costs against similar investment options can ensure that the portfolio remains cost-effective.

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.

Optimization efforts should initially focus on addressing the high correlation among certain assets to improve diversification. By reallocating from overlapping U.S. equity ETFs to underrepresented sectors or geographies, the portfolio could achieve a more efficient risk-return profile. This adjustment would not only reduce redundancy but also potentially enhance overall portfolio performance through better diversification.

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