A growth-focused portfolio with strong US and technology sector exposure

Report created on Aug 27, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio, heavily weighted towards US equities, showcases a strong preference for growth-oriented investments, with a significant portion allocated to the Fidelity 500 Index Fund and Fidelity Zero Total Market Index Fund. The inclusion of the Fidelity International Value Fund and Fidelity Freedom 2065 Fund introduces some geographic and future retirement planning diversity, albeit modestly. The Fidelity Total Bond Fund provides a slight hedge against equity volatility. The portfolio's composition suggests a strategy favoring broad market exposure, particularly to the US market, while attempting to balance growth with a minimal bond cushion.

Growth Info

Historically, this portfolio has demonstrated robust growth, with a Compound Annual Growth Rate (CAGR) of 14.64%. The maximum drawdown of -33.16% indicates a period of significant volatility, likely reflective of broader market downturns. The concentration in high-growth sectors, particularly technology, has contributed to these strong returns, though it also underscores the portfolio's susceptibility to sector-specific risks. The performance is commendable but comes with an inherent risk associated with its growth focus and market concentration.

Projection Info

Monte Carlo simulations, using historical data to project future outcomes, suggest a wide range of potential portfolio values. With 988 out of 1,000 simulations showing positive returns, the portfolio appears well-positioned for growth. However, the significant spread between the 5th and 67th percentiles highlights the uncertainty and risk associated with the portfolio's current allocation. It's important to remember that while these simulations can provide insight, they cannot predict future market conditions with certainty.

Asset classes Info

  • Stocks
    93%
  • Bonds
    6%
  • Cash
    1%

The portfolio's asset allocation leans heavily towards stocks (93%), with a minor allocation to bonds (6%) and a nominal cash position (1%). This allocation aligns with the portfolio's growth orientation but exposes it to higher volatility and risk, particularly in market downturns. The minimal bond and cash holdings offer limited cushioning against stock market fluctuations, emphasizing the need for a well-considered risk management strategy.

Sectors Info

  • Technology
    24%
  • Financials
    19%
  • Industrials
    10%
  • Consumer Discretionary
    9%
  • Health Care
    8%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Basic Materials
    4%
  • Energy
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector allocation is concentrated in technology (24%) and financial services (19%), followed by industrials and consumer cyclicals. This concentration in technology and financial services sectors mirrors broader market trends but also increases susceptibility to sector-specific downturns. Diversifying across additional sectors could mitigate some of this risk, potentially smoothing out returns over time without significantly compromising growth potential.

Regions Info

  • North America
    77%
  • Europe Developed
    15%
  • Japan
    5%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Latin America
    1%
  • Australasia
    1%

With 77% of assets allocated to North America, the portfolio shows a strong home bias, which, while common, can limit exposure to international growth opportunities and diversification benefits. The allocations to Europe Developed and Japan introduce some international exposure, but the portfolio may benefit from a more balanced geographic distribution, including emerging markets, to enhance global diversification and capture growth outside the US.

Market capitalization Info

  • Mega-cap
    44%
  • Large-cap
    30%
  • Mid-cap
    15%
  • Small-cap
    2%
  • Micro-cap
    1%

The portfolio's market capitalization exposure is heavily skewed towards mega (44%) and big (30%) cap stocks, with less emphasis on medium, small, and micro caps. This bias towards larger companies is consistent with the portfolio's growth and safety orientation, as these companies often offer more stability and less volatility. However, increasing exposure to smaller cap stocks could offer higher growth potential and further diversification benefits.

Redundant positions Info

  • FIDELITY ZERO TOTAL MARKET INDEX FUND
    Fidelity 500 Index Fund
    High correlation

The high correlation between the Fidelity 500 Index Fund and Fidelity Zero Total Market Index Fund indicates redundancy, as they cover much of the same market segment. This overlap limits the diversification benefits and suggests an opportunity to reallocate funds from one to more distinct asset classes or sectors to enhance portfolio efficiency and reduce risk without sacrificing potential 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.

Click on the colored dots to explore allocations.

Optimizing this portfolio involves addressing the high correlation between certain holdings to enhance diversification. By reallocating from overlapping assets into underrepresented sectors, geographies, or asset classes, the portfolio can achieve a more efficient risk-return profile. This process, guided by the Efficient Frontier concept, seeks to maximize returns for a given level of risk, potentially improving the portfolio's long-term performance and resilience.

Dividends Info

  • Fidelity Freedom 2065 Fund 2.80%
  • FIDELITY INTERNATIONAL VALUE FUND FIDELITY INTERNATIONAL VALUE FUND 2.20%
  • FIDELITY TOTAL BOND FUND FIDELITY TOTAL BOND FUND 3.70%
  • Fidelity 500 Index Fund 0.90%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND 1.00%
  • Weighted yield (per year) 1.50%

The portfolio's average dividend yield of 1.50%, driven by its bond and equity holdings, contributes to its total return. While not the primary focus for a growth-oriented portfolio, dividends offer a source of passive income and can provide a buffer during market downturns. Considering the portfolio's long-term growth orientation, the current yield is reasonable, but there may be room to optimize income generation without significantly altering the portfolio's risk profile.

Ongoing product costs Info

  • Fidelity Freedom 2065 Fund 0.68%
  • FIDELITY INTERNATIONAL VALUE FUND FIDELITY INTERNATIONAL VALUE FUND 0.87%
  • FIDELITY TOTAL BOND FUND FIDELITY TOTAL BOND FUND 0.44%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.26%

The portfolio's total expense ratio (TER) of 0.26% is relatively low, enhancing its attractiveness by minimizing costs that can erode long-term returns. The variance in individual fund costs, from the Fidelity 500 Index Fund's 0.02% to the Fidelity Freedom 2065 Fund's 0.68%, highlights the importance of cost awareness in fund selection. Maintaining low investment costs is crucial for maximizing net returns over time.

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