A growth-oriented portfolio with a strong bias towards US equities and tech-heavy exposure
Report created on Jan 22, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
FZ FIDELITY ZERO TOTAL MARKET INDEX FUND
FZROX 80.00% -
FZ FIDELITY ZERO INTERNATIONAL INDEX FUND
FZILX 20.00%
This portfolio is heavily weighted towards the Fidelity ZERO Total Market Index Fund, making up 80% of the total allocation, while the remaining 20% is invested in the Fidelity ZERO International Index Fund. This composition suggests a strong preference for broad market exposure, primarily within the US, with a smaller allocation to international equities. A comparison with a typical benchmark reveals a similar focus on US equities, but the portfolio's international exposure might be lower than average. Balancing the allocation could enhance diversification and potentially reduce the risk associated with domestic market volatility.
Growth
Historically, the portfolio has delivered a Compound Annual Growth Rate (CAGR) of 13.20%, which is impressive and indicates strong growth over time. However, it also experienced a maximum drawdown of -34.60%, highlighting periods of significant volatility. Compared to a benchmark index, this performance suggests robust returns but with higher risk during downturns. Investors should be aware that past performance is not indicative of future results. To manage risk, consider strategies that may help mitigate drawdowns, such as diversifying further or incorporating defensive assets.
Projection
The Monte Carlo simulation, which uses historical data to project future outcomes, indicates a wide range of potential returns. With 1,000 simulations, the 5th percentile projects a 14.2% return, while the median (50th percentile) is 262.6%, and the 67th percentile is 392.1%. These projections suggest a high likelihood of positive returns, with 968 out of 1,000 simulations showing gains. However, it's important to remember that these are not guarantees. Consider using these projections as a guide to understand potential outcomes and adjust your strategy if you're not comfortable with the level of risk.
Asset classes
- Stocks 100%
The portfolio is entirely invested in stocks, with no exposure to other asset classes like bonds or cash. While this aligns with a growth-oriented strategy, it may limit diversification benefits typically offered by a mix of asset classes. Compared to benchmarks that often include bonds and other assets, this portfolio may experience higher volatility. Introducing a small allocation to fixed income or other asset classes could help balance risk and provide more stability during market downturns.
Sectors
- Technology 28%
- Financials 16%
- Consumer Discretionary 11%
- Health Care 10%
- Industrials 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 3%
- Real Estate 3%
- Utilities 3%
The sector allocation shows a significant concentration in technology, which makes up 28% of the portfolio. Financial services and consumer cyclical sectors also have substantial weightings. This tech-heavy focus aligns with recent market trends but could lead to increased volatility, especially during periods of interest rate changes or regulatory shifts. While the sector composition aligns with some benchmarks, consider diversifying into underrepresented sectors like utilities or real estate to reduce sector-specific risks.
Regions
- North America 81%
- Europe Developed 8%
- Japan 3%
- Asia Emerging 2%
- Asia Developed 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, the portfolio is heavily weighted towards North America, which comprises 81% of the allocation. This concentration aligns with the US market's historical strength but may expose the portfolio to regional risks. Compared to global benchmarks, the international exposure is relatively low, with only 19% allocated outside North America. Increasing investments in other regions, such as emerging markets or Europe, could enhance diversification and provide opportunities for growth in different economic cycles.
Market capitalization
- Mega-cap 43%
- Large-cap 31%
- Mid-cap 19%
- Small-cap 5%
- Micro-cap 2%
The portfolio has a strong bias towards larger companies, with 43% in mega-cap and 31% in big-cap stocks. This focus on established companies can offer stability and lower volatility compared to smaller-cap stocks. However, the smaller allocation to medium, small, and micro-cap stocks may limit potential upside from high-growth companies. Consider rebalancing to include a more diverse range of market capitalizations to capture growth opportunities while maintaining stability.
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.
Click on the colored dots to explore allocations.
The portfolio's risk-return profile can be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio for a given set of assets. By adjusting the allocation between the current funds, you may achieve a more efficient portfolio that offers better returns for the same level of risk. This optimization does not necessarily mean adding new assets but rather fine-tuning the existing allocation to align with your risk tolerance and investment goals.
Dividends
- FIDELITY ZERO TOTAL MARKET INDEX FUND 1.10%
- Weighted yield (per year) 0.88%
The dividend yield for the Fidelity ZERO Total Market Index Fund is 1.10%, contributing to a total yield of 0.88% for the portfolio. This level of yield is relatively modest, aligning with a growth-focused strategy that prioritizes capital appreciation over income. For investors seeking income, consider incorporating higher-yielding assets or dividend-focused funds to enhance cash flow. However, ensure that any changes align with your overall investment goals and risk tolerance.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey