A balanced and highly diversified portfolio with strong emphasis on global equities and high yield bonds

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 who appreciate global market exposure and understand the value of diversification across asset classes, sectors, and geographies. Ideal for individuals with a long-term investment horizon, this portfolio aims to deliver steady returns through a mix of capital appreciation and income, making it well-suited for building wealth over time while managing volatility.

Positions

  • Vanguard Total Stock Market Index Fund ETF Shares
    VTI - US9229087690
    50.00%
  • BNY Mellon International Equity ETF
    BKIE - US09661T4040
    20.00%
  • iShares Broad USD High Yield Corporate Bond ETF
    USHY - US46435U8532
    20.00%
  • BNY Mellon ETF Trust - BNY Mellon Emerging Markets Equity ETF
    BKEM - US09661T5039
    10.00%

The portfolio is structured around a core of global equities and high yield corporate bonds, with a 50% allocation to a broad U.S. stock market ETF, 20% to international equities, another 20% to U.S. high yield corporate bonds, and 10% to emerging market equities. This composition reflects a strategic balance between growth-oriented stocks and income-generating bonds, aiming to capture global market returns while mitigating risk through diversification. The inclusion of both developed and emerging market equities enhances exposure to global growth opportunities.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.52%, with a maximum drawdown of -24.40%. This performance indicates a robust growth trajectory, albeit with periods of significant value decline, which is typical in equity-heavy portfolios. The days contributing to 90% of returns highlight the impact of short-term, significant market movements on overall performance, emphasizing the importance of staying invested through market cycles for potential recovery and gains.

Projection Info

Using Monte Carlo simulations, which forecast potential outcomes by varying historical data, the portfolio shows a wide range of future performance scenarios. With 998 out of 1,000 simulations predicting positive returns, the median projected return stands at a compelling 398.4%, suggesting strong potential for future growth. However, it's crucial to remember that these projections, while useful for planning, cannot guarantee future outcomes.

Asset classes Info

  • Stocks
    80%
  • Bonds
    20%
  • Cash
    0%
  • No data
    0%
  • Other
    0%

The allocation splits into 80% stocks and 20% bonds, offering a balanced approach between growth through equities and income plus stability from bonds. This asset class distribution aligns with the portfolio's balanced risk profile, aiming to provide a mix of capital appreciation and income. The absence of alternative asset classes like real estate or commodities might limit diversification benefits but simplifies the portfolio management.

Sectors Info

  • Technology
    21%
  • Financials
    14%
  • Industrials
    9%
  • Consumer Discretionary
    8%
  • Health Care
    7%
  • Telecommunications
    7%
  • Consumer Staples
    4%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation shows a heavy tilt towards technology and financial services, which may drive growth but also expose the portfolio to sector-specific risks. The diversification across ten sectors helps mitigate this risk, although the high concentration in technology could be a concern during market downturns. Balancing sector exposure can reduce volatility and improve long-term performance stability.

Regions Info

  • North America
    52%
  • Europe Developed
    11%
  • Asia Emerging
    5%
  • Japan
    4%
  • Asia Developed
    4%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly invested in North America (52%), with a significant portion in developed Europe and emerging markets. This global exposure supports diversification and access to varied economic growth drivers. However, the relatively low exposure to Asia and other emerging markets might limit potential returns from these high-growth regions.

Market capitalization Info

  • Mega-cap
    36%
  • Large-cap
    26%
  • Mid-cap
    13%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization breakdown, with a focus on mega and large-cap stocks, suggests a preference for stability and lower volatility associated with larger, established companies. While this may reduce risk, diversifying more into medium and small-cap stocks could offer higher growth potential, albeit with increased volatility.

Dividends Info

  • BNY Mellon ETF Trust - BNY Mellon Emerging Markets Equity ETF 2.50%
  • BNY Mellon International Equity ETF 2.70%
  • iShares Broad USD High Yield Corporate Bond ETF 6.80%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 2.75%

The portfolio's dividend yield averages at 2.75%, with the high yield corporate bond ETF significantly contributing to this income stream. Dividends play a crucial role in total returns, especially in a balanced portfolio where income generation complements capital appreciation. Regular income from dividends can also provide cash flow for reinvestment or as a buffer during market downturns.

Ongoing product costs Info

  • BNY Mellon ETF Trust - BNY Mellon Emerging Markets Equity ETF 0.11%
  • BNY Mellon International Equity ETF 0.04%
  • iShares Broad USD High Yield Corporate Bond ETF 0.08%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.05%

With a Total Expense Ratio (TER) averaging 0.05%, the portfolio is cost-efficient, maximizing the potential for net returns. Lower costs are crucial for long-term investment success, as they directly enhance performance by reducing the drag on returns. This cost structure is commendable and should be maintained.

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.

Considering the Efficient Frontier, the portfolio appears well-positioned for optimizing the risk-return ratio based on its current asset allocation. However, there's always room for improvement, such as adjusting the asset mix to further enhance returns for a given level of risk. Regular reviews can help maintain this optimization, adapting to changing market conditions.

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