Balanced and diversified portfolio blending global equities with low-cost ETFs

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 and a long-term investment horizon. It's designed for those who appreciate the growth potential of equities, both in the U.S. and internationally, but also seek to mitigate risk through diversification and a small allocation to cash equivalents. The emphasis on low-cost ETFs and a broad sectoral and geographical spread makes it ideal for individuals aiming for a diversified, growth-oriented strategy with a prudent approach to risk management.

Positions

  • Vanguard S&P 500 ETF
    VOO - US9229083632
    50.00%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    30.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    10.00%
  • iShares® 0-3 Month Treasury Bond ETF
    SGOV - US46436E7186
    10.00%

This portfolio is strategically structured, with a 50% allocation to a Vanguard S&P 500 ETF, 30% in Vanguard Total International Stock Index Fund ETF Shares, 10% in Avantis® U.S. Small Cap Value ETF, and 10% in iShares® 0-3 Month Treasury Bond ETF. This composition showcases a strong emphasis on equities, particularly large-cap U.S. stocks and international shares, complemented by a small but significant allocation to U.S. small-cap value stocks and ultra-short-term bonds. The blend of global equities and cash equivalents positions this portfolio as balanced, aiming to capture growth while mitigating volatility through diversification across major markets and asset classes.

Growth Info

The portfolio has demonstrated a robust Compound Annual Growth Rate (CAGR) of 14.63%, with a maximum drawdown of -22.72%. These figures underscore a resilient performance, particularly when considering the balanced risk profile. The days contributing to 90% of returns indicate that significant gains were concentrated in relatively few trading days, emphasizing the importance of staying invested over the long term to capture these critical periods of growth.

Projection Info

Using a Monte Carlo simulation, which projects future performance based on historical data, this portfolio shows a wide range of potential outcomes. With a median projection of 475.3% growth and 996 out of 1,000 simulations yielding positive returns, the analysis suggests a high likelihood of future gains. However, it's crucial to remember that these projections are speculative and depend on historical market behaviors, which may not predict future movements accurately.

Asset classes Info

  • Stocks
    89%
  • Cash
    11%
  • Bonds
    0%
  • Other
    0%
  • No data
    0%

The asset class distribution, with 89% in stocks and 11% in cash equivalents, aligns with the portfolio's balanced risk classification. This allocation supports growth through equity investments while providing liquidity and lower volatility through cash equivalents. Comparing this to benchmark norms, the portfolio is well-positioned for investors seeking a blend of growth and stability.

Sectors Info

  • Technology
    21%
  • Financials
    17%
  • Industrials
    10%
  • Consumer Discretionary
    10%
  • Health Care
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sectoral allocation reveals a diversified approach, with technology and financial services making up the largest segments. This sectoral spread is beneficial, as it reduces the impact of downturns in any single sector. However, the heavy weighting in technology and financial services, sectors known for volatility, suggests a need for periodic review to ensure alignment with the investor's risk tolerance and market conditions.

Regions Info

  • North America
    62%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic exposure is broadly diversified, with a significant emphasis on North America, followed by developed Europe and emerging Asian markets. This geographic distribution enhances the portfolio's diversification, potentially reducing risk and capturing growth across different economic cycles. However, the limited exposure to emerging markets and smaller regions could be a missed opportunity for higher growth, albeit with increased risk.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    27%
  • Mid-cap
    14%
  • Small-cap
    6%
  • Micro-cap
    5%

Market capitalization exposure leans heavily towards mega and big-cap stocks, which typically offer stability and steady growth. The presence of medium, small, and micro-cap stocks introduces higher growth potential but with increased volatility. This blend supports the portfolio's balanced approach, aiming for growth while managing risk.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • iShares® 0-3 Month Treasury Bond ETF 4.50%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 2.06%

The portfolio's dividend yield stands at 2.06%, contributing to total returns alongside capital appreciation. This yield, driven by the diverse ETF selections, offers a balance between income generation and growth potential. Regular dividend income can provide a buffer in volatile markets, underscoring the portfolio's balanced nature.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.06%

With a Total Expense Ratio (TER) of 0.06%, the portfolio benefits from low costs, enhancing net returns over time. This efficiency is crucial for long-term growth, as lower costs directly translate to higher investment returns. The focus on low-cost ETFs is commendable and aligns with best practices for maximizing investor returns.

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 allocation appears near the Efficient Frontier, indicating an optimal risk-return balance based on historical data. While this suggests the portfolio is well-constructed, continuous monitoring and adjustments are essential to maintain this efficiency, especially as market conditions evolve. Diversification and cost-efficiency remain key factors in sustaining optimal performance.

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