Target date mutual fund core with strong diversification and lower volatility than broad equity markets
Report created on Aug 23, 2026Risk profile
3/7
Diversification profile
5/5
Positions
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VT VANGUARD TARGET RETIREMENT 2035 FUND INVESTOR SHARES
VTTHX - US92202E5087 88.62% -
VF VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES
VFORX - US92202E8701 7.73% -
FS Fidelity Total Market Index Fund
FSKAX - US3159116934 1.67% -
FT FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
FTIHX - US31635V6386 1.29% -
VO Vanguard S&P 500 ETF
VOO - US9229083632 0.69%
This portfolio is built almost entirely from broad, low-cost mutual funds with a heavy tilt to a single target date fund. The 2035 fund dominates at nearly 90%, with a smaller 2040 target date fund and tiny positions in total US market, total international, and an S&P 500 ETF. Structurally, this means most decisions about stock versus bond mix and underlying holdings are delegated to the target date strategies. That kind of “one main engine plus a few small add-ons” setup keeps the portfolio simple to manage while still benefiting from very wide diversification inside each fund. It’s a streamlined structure rather than a collection of many separate building blocks.
Growth
From 2016 to 2026, $1,000 in this portfolio grew to about $2,568, a compound annual growth rate (CAGR) of 9.93%. CAGR is the “average yearly speed” of growth over the whole period. This trailed both the US and global equity benchmarks, which had higher CAGRs, but the portfolio also experienced a smaller worst loss, or max drawdown, at about -28% versus roughly -34% for the benchmarks. That shows a tradeoff: lower long-term return than pure equity indices, but with somewhat shallower declines. As always, this is backward-looking; it describes how the mix would have behaved, not what it will do next.
Projection
The Monte Carlo projection uses many randomised “what if” paths based on historical behavior to estimate a range of future outcomes. Here, 1,000 simulations over 15 years suggest a median result of around $2,553 from $1,000, with most outcomes between about $1,849 and $3,420. Monte Carlo is like running thousands of alternate timelines, each with different return sequences, to see what’s plausible rather than betting on a single forecast. In these runs, roughly three-quarters of scenarios ended positive, and the average simulated annual return was 6.77%. These numbers depend heavily on past data and assumptions, so they’re best viewed as a rough map of possibilities, not a promise.
Asset classes
- Stocks 69%
- Bonds 31%
The portfolio holds about 69% in stocks and 31% in bonds, which is a mixed allocation rather than all-equity or all-fixed income. Stocks tend to drive long-term growth but come with bigger ups and downs, while bonds usually provide steadier income and can soften equity volatility. A roughly 70/30 split often lands in a middle ground between growth potential and stability. Compared with pure equity benchmarks, that bond sleeve explains part of the lower return and lower drawdown. It also means the portfolio’s behavior will differ from headline stock indices, especially in sharp market selloffs or when interest rates move meaningfully.
Sectors
- Technology 25%
- Financials 16%
- Industrials 12%
- Consumer Discretionary 9%
- Health Care 9%
- Telecommunications 8%
- Consumer Staples 5%
- Energy 5%
- Basic Materials 4%
- Utilities 3%
- Real Estate 3%
This breakdown covers the equity portion of your portfolio only.
Sector exposure is spread across a wide range: technology is the largest at 25%, followed by financials, industrials, and a mix of consumer, health care, telecom, energy, and others. This looks broadly similar to diversified global equity indices, rather than making a concentrated bet on a single industry. A tech tilt can add growth potential and sensitivity to innovation cycles, while meaningful weights in financials, industrials, and defensives like consumer staples and utilities add balance. Because no single sector overwhelmingly dominates, the portfolio is less dependent on one industry’s fortunes. That alignment with broad market sector weights is a strong indicator of healthy diversification.
Regions
- North America 63%
- Europe Developed 15%
- Japan 6%
- Asia Developed 6%
- Asia Emerging 5%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
This breakdown covers the equity portion of your portfolio only.
Geographically, about 63% of the equity exposure is in North America, with the rest spread across developed Europe, Japan, other developed Asia, and emerging regions. That North America tilt is common in many global portfolios, partly reflecting the size and depth of its markets. At the same time, the meaningful allocations to Europe, Japan, and emerging Asia help reduce reliance on a single economy or currency. This globally diversified structure can smooth country-specific shocks, since different regions often move on different economic cycles. The spread across both developed and emerging markets aligns well with global benchmarks and supports the portfolio’s high diversification score.
Market capitalization
- Mega-cap 29%
- Large-cap 21%
- Mid-cap 12%
- Small-cap 4%
- Micro-cap 1%
This breakdown covers the equity portion of your portfolio only.
By market cap, the portfolio leans strongly toward larger companies: mega- and large-caps together make up about half of the equity exposure, with smaller slices in mid-, small-, and micro-caps. Bigger companies tend to be more established and, historically, often a bit less volatile than very small firms, while smaller caps can offer more explosive upside and downside. This pattern closely mirrors broad market indices, which are also dominated by large firms because they’re weighted by market value. The modest, not dominant, exposure to small and micro-caps means the portfolio taps into some smaller-company characteristics without letting them drive overall risk.
True holdings
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NV NVIDIA Corporation 0.05%
Part of fund(s):- Vanguard S&P 500 ETF
-
AA Apple Inc. 0.05%
Part of fund(s):- Vanguard S&P 500 ETF
-
MS Microsoft Corporation 0.04%
Part of fund(s):- Vanguard S&P 500 ETF
-
AM Amazon.com Inc 0.03%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class A 0.02%
Part of fund(s):- Vanguard S&P 500 ETF
-
AV Broadcom Inc 0.02%
Part of fund(s):- Vanguard S&P 500 ETF
-
GO Alphabet Inc Class C 0.02%
Part of fund(s):- Vanguard S&P 500 ETF
-
ME Meta Platforms Inc. 0.01%
Part of fund(s):- Vanguard S&P 500 ETF
-
JP JPMorgan Chase & Co 0.01%
Part of fund(s):- Vanguard S&P 500 ETF
-
BR Berkshire Hathaway Inc 0.01%
Part of fund(s):- Vanguard S&P 500 ETF
- Top 10 total 0.26%
This breakdown covers the equity portion of your portfolio only.
The look-through data only covers a tiny fraction of the portfolio, mainly from ETF top-10 holdings, so it only shows a small slice of what’s actually inside. Within that limited window, familiar large US companies like NVIDIA, Apple, Microsoft, Amazon, Alphabet, and Meta appear, but each at around 0.01–0.05% of the total portfolio. That’s essentially negligible single-name exposure when viewed at the full portfolio level. Because most of the portfolio sits in mutual funds where detailed top holdings aren’t captured here, any overlap between those underlying positions isn’t fully visible. So the apparent concentration risk from specific names is likely understated but still very dispersed.
Factors
Factor exposure is mostly neutral across value, size, momentum, and quality, meaning it behaves broadly like the overall market on those dimensions. The standout tilt is toward low volatility at 84%, which is described as “very high.” Low volatility as a factor means the holdings tend, on average, to move less sharply than the broader market, especially during swings. Portfolios with this tilt often hold more stable, defensive types of stocks and a meaningful bond allocation, which matches the mixed stock-bond setup here. The relatively low yield exposure fits with a focus that isn’t centered on high dividend payers, but rather on overall balance and smoother returns.
Risk contribution
-
VANGUARD TARGET RETIREMENT 2035 FUND INVESTOR SHARES
Weight: 88.62% 87.0% -
VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES
Weight: 7.73% 8.2% -
Fidelity Total Market Index Fund
Weight: 1.67% 2.3% -
FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
Weight: 1.29% 1.5% -
Vanguard S&P 500 ETF
Weight: 0.69% 1.0%
Risk contribution shows how much each holding drives the portfolio’s overall ups and downs, which can differ from simple weights. The main 2035 target date fund is about 89% of the portfolio and contributes around 87% of the risk, which is pretty proportional. The 2040 fund’s risk share is also close to its weight. Smaller positions like the Fidelity Total Market and the S&P 500 ETF punch slightly above their weight in risk terms, which is normal for pure equity funds. The top three holdings together account for about 98% of total risk, so in practice the portfolio behaves almost entirely like those core target date funds.
Redundant positions
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High correlationVANGUARD TARGET RETIREMENT 2035 FUND INVESTOR SHARESVanguard S&P 500 ETFFidelity Total Market Index FundVANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES
The correlation data shows that the main funds in the portfolio tend to move in very similar ways. Correlation is a measure of how often two investments move up or down at the same time; highly correlated pairs don’t give much extra diversification when markets swing. Here, the total market fund, S&P 500 ETF, and both target date funds are all closely linked, which makes sense since they’re built from overlapping broad equity exposures. This means the smaller satellite funds generally reinforce the behavior of the core rather than offsetting it. The true diversification benefits mainly come from the stock–bond mix and global spread inside the target date funds.
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.
On the efficient frontier chart, the current portfolio sits on or very close to the frontier, meaning that for its level of risk it’s using the existing holdings in a relatively efficient way. The Sharpe ratio, which measures return per unit of risk above a risk-free rate, is 0.49 for the current mix. The “optimal” and minimum-variance mixes made from the same holdings show higher Sharpe ratios, but those points also involve different risk levels. The key takeaway is that within this limited set of building blocks, there isn’t a glaring mismatch between risk and return. The allocation is doing a solid job for the chosen risk band.
Dividends
- Fidelity Total Market Index Fund 0.90%
- FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.40%
- VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES 2.50%
- Vanguard S&P 500 ETF 1.00%
- VANGUARD TARGET RETIREMENT 2035 FUND INVESTOR SHARES 2.70%
- Weighted yield (per year) 2.64%
The overall dividend yield of about 2.64% suggests a meaningful income component alongside capital growth. Yield is the cash paid out in dividends each year as a percentage of the portfolio’s value. The target date funds sit in the mid‑2% range, and the international fund has a slightly higher yield, which is common because many non-US markets distribute more income. The US total market and S&P 500 ETF yields are lower but still contribute. While dividends aren’t guaranteed and can change with company policies and economic conditions, this level of yield can provide a steady stream of cash that forms an important part of total long-term return.
Ongoing product costs
- Fidelity Total Market Index Fund 0.02%
- FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
- VANGUARD TARGET RETIREMENT 2040 FUND INVESTOR SHARES 0.08%
- Vanguard S&P 500 ETF 0.03%
- VANGUARD TARGET RETIREMENT 2035 FUND INVESTOR SHARES 0.08%
- Weighted costs total (per year) 0.08%
The portfolio’s costs are impressively low, with a total expense ratio around 0.08%. The expense ratio (TER) is the annual fee charged by each fund as a percentage of the amount invested, quietly deducted inside the fund. Individual holdings range from 0.02% to 0.08%, all firmly in low-cost territory, especially for diversified index and target date strategies. Keeping fees this low leaves more of the portfolio’s returns in investors’ pockets each year, and that difference compounds meaningfully over long periods. This cost profile is a real strength and lines up well with best practices for long-term, diversified investing.
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