A diversified growth-focused portfolio with high technology exposure and moderate international allocation

Report created on Apr 21, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of equity funds and ETFs, with a significant allocation to international markets through the Fidelity Total International Index Fund. The portfolio's composition aligns with a growth-oriented strategy, focusing on a broad spectrum of sectors and geographies. Compared to typical benchmarks, the portfolio's international exposure is noteworthy, providing potential for diversification beyond domestic markets. However, the heavy weighting in technology suggests a concentration risk that could be mitigated by balancing with other sectors. To enhance diversification, consider adjusting allocations to reduce sector concentration and ensure a balanced approach across different asset types.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 10.63%, indicating robust growth over the investment period. However, it also experienced a significant maximum drawdown of -34.40%, highlighting the potential volatility associated with a growth-focused strategy. When compared to standard benchmarks, the portfolio's performance suggests a higher risk-return profile. While past performance is not indicative of future results, understanding these trends can help in assessing risk tolerance. To mitigate future drawdowns, consider incorporating more defensive assets or strategies that may provide stability during market downturns.

Projection Info

Monte Carlo simulations, which use historical data to predict future outcomes, indicate a wide range of potential returns for this portfolio. The median outcome projects a 213.2% increase, while the best-case scenario suggests a 394.3% gain. However, the possibility of a -26.0% decline in the worst-case scenario underscores the inherent risks. These projections highlight the uncertainty in forecasting future performance, as they rely on historical patterns that may not repeat. To prepare for various market conditions, consider stress-testing the portfolio against different economic scenarios and adjusting allocations to manage risks effectively.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, which may limit diversification benefits typically achieved through a mix of asset classes. While a 100% equity allocation aligns with a growth strategy, it also increases exposure to market volatility. In comparison to benchmarks, a more diversified allocation might include bonds or alternative assets to reduce risk. To enhance diversification and potentially improve risk-adjusted returns, consider incorporating fixed-income securities or other asset classes that can provide a buffer during equity market downturns.

Sectors Info

  • Technology
    31%
  • Financials
    13%
  • Industrials
    13%
  • Health Care
    10%
  • Consumer Discretionary
    6%
  • Consumer Staples
    6%
  • Telecommunications
    5%
  • Energy
    5%
  • Basic Materials
    3%
  • Consumer Discretionary
    3%
  • Real Estate
    3%
  • Utilities
    2%

The portfolio's sector allocation is heavily weighted towards technology, which comprises 31% of the total. This concentration can lead to higher volatility, especially during periods of technological disruption or regulatory changes. While technology has driven substantial growth recently, it also introduces sector-specific risks. Compared to common benchmarks, this allocation may lack balance, as other sectors like healthcare or financial services could offer diversification. To mitigate sector concentration risk, consider redistributing some technology exposure to underrepresented sectors, enhancing overall portfolio resilience.

Regions Info

  • North America
    66%
  • Europe Developed
    12%
  • Asia Emerging
    8%
  • Japan
    5%
  • Asia Developed
    5%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly focused on North America, accounting for 66% of the allocation. This concentration aligns with many U.S.-centric benchmarks but may limit exposure to international growth opportunities. The inclusion of emerging markets and developed regions like Europe and Asia provides some diversification, yet the overall international allocation remains modest. To capitalize on global growth potential and reduce reliance on the U.S. market, consider increasing exposure to diverse regions, particularly emerging markets, which may offer higher growth prospects.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    29%
  • Mid-cap
    19%
  • Small-cap
    14%
  • Micro-cap
    8%

The portfolio's market capitalization distribution is well-balanced, with a mix of mega, big, medium, small, and micro-cap stocks. This diversity can help manage risk by spreading exposure across companies of varying sizes and growth potential. Compared to typical benchmarks, the inclusion of small and micro-cap stocks adds a layer of potential high growth, albeit with increased volatility. To maintain a balanced risk profile, ensure that the allocation across market caps aligns with your investment goals and risk tolerance, potentially adjusting to avoid overexposure to any single category.

Redundant positions Info

  • Fidelity Total Market Index Fund
    FIDELITY ZERO TOTAL MARKET INDEX FUND
    High correlation
  • Robo Global® Robotics and Automation Index ETF
    iShares Exponential Technologies ETF
    High correlation

The portfolio contains highly correlated assets, such as the Fidelity Total Market Index Fund and the FIDELITY ZERO TOTAL MARKET INDEX FUND. High correlation indicates that these assets tend to move in tandem, which can limit diversification benefits. During market downturns, this could lead to amplified losses as correlated assets decline together. To enhance diversification, consider replacing or reducing exposure to highly correlated assets with alternatives that have lower correlation, thus improving the overall risk management of the portfolio.

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 could benefit from optimization using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with the current assets. This process involves adjusting allocations to maximize returns for a given level of risk or minimize risk for a given return target. While the portfolio is broadly diversified, optimizing within the existing asset mix could unlock additional efficiency. To pursue this, consider consulting with a financial advisor or using portfolio management tools to explore potential allocation adjustments that align with your risk tolerance and investment goals.

Dividends Info

  • Fidelity Small Cap Growth Index Fund 1.50%
  • Fidelity Small Cap Value Index Fund 2.00%
  • Fidelity Total Market Index Fund 1.10%
  • Fidelity® MSCI Information Technology Index ETF 0.40%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.80%
  • FIDELITY ZERO TOTAL MARKET INDEX FUND 1.30%
  • iShares Self-Driving EV and Tech ETF 2.90%
  • Defiance Quantum 0.80%
  • Robo Global® Robotics and Automation Index ETF 0.60%
  • Schwab U.S. Dividend Equity ETF 4.10%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.30%
  • iShares Exponential Technologies ETF 0.70%
  • Weighted yield (per year) 1.94%

The portfolio offers a modest dividend yield of 1.94%, with the Schwab U.S. Dividend Equity ETF contributing significantly at 4.10%. Dividends can provide a stable income stream and help cushion against market volatility. For growth-focused investors, reinvesting dividends can enhance compounding returns over time. Compared to benchmarks, the portfolio's yield aligns with a balanced approach to growth and income. To optimize income potential, consider reviewing the dividend policies of the holdings and potentially increasing exposure to higher-yielding assets, balancing growth with income generation.

Ongoing product costs Info

  • Fidelity® MSCI Information Technology Index ETF 0.08%
  • iShares Self-Driving EV and Tech ETF 0.47%
  • Defiance Quantum 0.40%
  • Robo Global® Robotics and Automation Index ETF 0.95%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • iShares Exponential Technologies ETF 0.46%
  • Weighted costs total (per year) 0.12%

The portfolio's total expense ratio (TER) is 0.12%, which is impressively low and supports better long-term performance by minimizing costs. Keeping expenses in check is crucial for maximizing net returns, as high fees can erode gains over time. Compared to industry averages, this cost structure is highly competitive and beneficial for investors. To maintain cost efficiency, periodically review the expense ratios of all holdings and consider replacing higher-cost funds with lower-cost alternatives that offer similar exposure, ensuring that cost savings contribute to overall portfolio growth.

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