Balanced Portfolio with Moderate Diversification and High Technology Exposure

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 suitable for a balanced investor with moderate risk tolerance. Such an investor seeks a mix of growth and stability, aiming for long-term capital appreciation while managing volatility. Their investment horizon is typically medium to long-term, allowing them to ride out market fluctuations. They are comfortable with a diversified portfolio that includes both equities and bonds, balancing potential returns with risk management.

Positions

  • Fidelity® Blue Chip Value ETF
    FBCV - US3160923450
    40.00%
  • Fidelity Covington Trust - Fidelity Women's Leadership ETF
    FDWM - US3160922874
    20.00%
  • Fidelity Covington Trust - Fidelity Clean Energy ETF
    FRNW - None
    20.00%
  • Fidelity® Total Bond ETF
    FBND - US3161883091
    10.00%
  • Fidelity® Low Volatility Factor ETF
    FDLO - US3160928244
    10.00%

The portfolio consists of five ETFs, with the largest allocation in the Fidelity® Blue Chip Value ETF at 40%. The remaining positions include the Fidelity Covington Trust - Fidelity Women’s Leadership ETF and Fidelity Clean Energy ETF, each at 20%, and smaller allocations to the Fidelity® Total Bond ETF and Fidelity® Low Volatility Factor ETF at 10% each. This composition shows a moderate level of diversification, focusing heavily on equity ETFs with a smaller portion in bonds. This balance provides a mix of growth potential and stability.

Growth

Historically, the portfolio has shown a CAGR of 1.82%, indicating modest growth. However, the maximum drawdown of -19.81% suggests significant volatility during market downturns. The fact that 90% of returns are concentrated in just 3 days highlights the importance of staying invested to capture these critical gains. This performance underscores the need for a long-term investment horizon to weather market fluctuations and benefit from potential growth.

Projection

Using a Monte Carlo simulation with 1,000 iterations, the portfolio's future performance was projected. The simulation assumes a hypothetical initial investment and provides a range of potential outcomes. The median (50th percentile) projection is a 2.34% return, while the best-case (67th percentile) scenario shows a 43.07% return. However, the worst-case (5th percentile) scenario indicates a -66.4% loss. These projections highlight the uncertainty and potential volatility, emphasizing the importance of risk management.

Asset classes

  • Stocks
    89%
  • Bonds
    11%
  • Cash
    1%
  • No data
    0%

The portfolio is primarily composed of two asset classes: stocks (89.17%) and bonds (10.50%), with a negligible amount in cash. The heavy allocation to stocks suggests a focus on growth, while the bond allocation provides some degree of stability and income. This mix aligns well with a balanced risk profile but could benefit from a slight increase in bonds to reduce volatility and enhance stability.

Sectors

  • Technology
    17%
  • Utilities
    15%
  • Financials
    14%
  • Health Care
    11%
  • Industrials
    11%
  • Consumer Discretionary
    6%
  • Consumer Staples
    5%
  • Energy
    5%
  • Telecommunications
    4%
  • Basic Materials
    2%
  • Real Estate
    1%

Sector allocation reveals a significant concentration in Technology (16.90%), Utilities (14.68%), and Financial Services (13.57%). Other notable sectors include Healthcare, Industrials, and Consumer Cyclicals. This sector distribution indicates a diverse range of industries, though the high exposure to Technology could introduce sector-specific risks. Balancing this with more defensive sectors might help mitigate potential downturns in tech.

Regions

  • North America
    73%
  • Europe Developed
    13%
  • Asia Emerging
    2%
  • Australasia
    1%
  • Asia Developed
    1%
  • Africa/Middle East
    0%
  • Japan
    0%

Geographically, the portfolio is predominantly invested in North America (72.87%), with smaller allocations in Europe Developed (12.85%) and other regions. This heavy North American focus might limit exposure to global growth opportunities and increase vulnerability to regional economic downturns. Diversifying further into international markets could provide better risk-adjusted returns and enhance global exposure.

Dividends

  • Fidelity® Blue Chip Value ETF 1.70%
  • Fidelity® Total Bond ETF 4.50%
  • Fidelity® Low Volatility Factor ETF 1.30%
  • Fidelity Covington Trust - Fidelity Women's Leadership ETF 0.70%
  • Fidelity Covington Trust - Fidelity Clean Energy ETF 1.40%
  • Weighted yield (per year) 1.68%

The portfolio's dividend yield data is not provided, but dividend-paying ETFs like the Fidelity® Total Bond ETF and certain equity ETFs can offer a steady income stream. Dividends can enhance total returns and provide a cushion during market volatility. Including more dividend-focused ETFs could improve cash flow and overall portfolio stability, especially for income-seeking investors.

Ongoing product costs

  • Fidelity® Blue Chip Value ETF 0.59%
  • Fidelity® Total Bond ETF 0.36%
  • Fidelity® Low Volatility Factor ETF 0.15%
  • Fidelity Covington Trust - Fidelity Women's Leadership ETF 0.59%
  • Fidelity Covington Trust - Fidelity Clean Energy ETF 0.39%
  • Weighted costs total (per year) 0.48%

The portfolio's total expense ratio (TER) is 0.48%, with individual ETF costs ranging from 0.15% to 0.59%. While these costs are relatively low, they can still impact long-term returns. Keeping an eye on expense ratios and considering lower-cost alternatives could help improve net returns. Regularly reviewing and optimizing investment costs is a prudent strategy for enhancing portfolio performance.

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