A balanced and broadly diversified portfolio with a strong focus on stocks and low costs

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 suits an investor seeking balanced growth with moderate risk tolerance and a long-term horizon. It prioritizes steady returns while maintaining exposure to global equities, making it ideal for individuals looking to build wealth over time. The investor likely values diversification and understands the importance of keeping costs low to maximize long-term gains. This strategy is well-suited for those comfortable with the inherent volatility of the stock market and who are in a position to ride out periods of market downturns without needing to liquidate their investments prematurely.

Positions

  • Fidelity Total Market Index Fund
    FSKAX - US3159116934
    70.00%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
    FTIHX - US31635V6386
    30.00%

The portfolio is composed of 70% Fidelity Total Market Index Fund and 30% Fidelity Total International Index Fund Institutional Premium Class, showcasing a strong emphasis on equities with a broad geographic spread. This allocation reflects a balanced approach, aiming to capture growth across both domestic and international markets. The simplicity of this two-fund strategy underscores a preference for broad market exposure over niche investment plays, aligning well with investors seeking diversified, long-term growth without the complexity of managing multiple asset classes or sector-specific funds.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.85%, with a maximum drawdown of -34.58%. This performance indicates a relatively high return potential, albeit with significant volatility, as evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 31.0 days highlight the portfolio's susceptibility to short-term market movements, emphasizing the importance of a long-term investment horizon to mitigate the impact of volatility and capitalize on growth opportunities.

Projection Info

Monte Carlo simulations, utilizing 1,000 iterations, project a wide range of outcomes with a median increase of 432.4% and a 5th percentile at a much lower 68.3%, illustrating the inherent uncertainty in predicting future returns. These projections, while based on historical data, underscore the importance of maintaining a long-term perspective and the readiness to weather periods of underperformance. The high count of simulations with positive returns (997) reinforces the portfolio's potential for growth, albeit with the caveat that past performance is not indicative of future results.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • Not Classified
    0%

The portfolio's allocation is nearly entirely in stocks (99%), with a minimal cash holding (1%). This heavy stock concentration is indicative of a growth-oriented strategy but comes with higher volatility and risk compared to portfolios with significant allocations to bonds or other asset classes. While this allocation aligns with the portfolio's balanced-risk classification, investors should be aware of the potential for significant short-term fluctuations in portfolio value.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Industrials
    11%
  • Consumer Discretionary
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Real Estate
    3%
  • Utilities
    3%

Sector allocation is led by Technology (26%), followed by Financial Services (17%), and balanced across Industrials, Consumer Cyclical, Healthcare, and other sectors. This sector spread suggests a well-rounded exposure to various economic segments, with a notable tilt towards technology. While this may enhance growth prospects, it also introduces sector-specific risks, particularly in market downturns or during periods of tech industry volatility.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (72%), with diversified exposure across developed Europe (12%), Japan (5%), and emerging markets in Asia (4%). This distribution provides a solid foundation in established markets while offering growth potential through emerging markets exposure. However, the relatively low allocation to emerging markets may limit exposure to high-growth regions, potentially affecting the portfolio's overall growth trajectory.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    30%
  • Mid-cap
    19%
  • Small-cap
    5%
  • Micro-cap
    2%

The portfolio's market capitalization breakdown shows a preference for larger companies (Mega 42%, Big 30%) with medium (19%), small (5%), and micro (2%) caps representing smaller portions. This skew towards larger companies may contribute to stability and lower volatility but could also limit potential upsides from smaller, high-growth companies.

Dividends Info

  • Fidelity Total Market Index Fund 0.90%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.20%
  • Weighted yield (per year) 1.29%

The portfolio's dividend yield stands at 1.29%, with the Total Market Index Fund and the International Index Fund contributing 0.90% and 2.20%, respectively. This yield, while modest, offers a source of passive income and potential for reinvestment, contributing to the portfolio's growth over time. Investors should consider the role of dividends in their overall investment strategy and income needs.

Ongoing product costs Info

  • Fidelity Total Market Index Fund 0.02%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • Weighted costs total (per year) 0.03%

The portfolio's total expense ratio (TER) of 0.03% is impressively low, maximizing the potential for net returns over the long term. Low costs are crucial for long-term investment success, as they compound alongside investment returns, ensuring more of the portfolio's growth is retained by the investor. This cost efficiency is a significant strength of the portfolio, aligning with best practices for long-term investing.

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.

The current allocation demonstrates a well-considered balance between risk and return, as indicated by its performance and risk classification. While the portfolio is already positioned favorably on the Efficient Frontier, indicating an optimal risk-return ratio, investors should continuously reassess their allocations in light of changing market conditions and personal financial goals to ensure ongoing alignment with their investment objectives.

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