Balanced and highly diversified portfolio with a strong emphasis on technology and international exposure

Report created on Sep 30, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

This portfolio showcases a significant allocation towards equity funds, with a notable emphasis on both U.S. and international markets. The inclusion of the Fidelity Total International Index Fund and the Fidelity 500 Index Fund as major components suggests a strategic balance between domestic and global exposure. The presence of the Taiwan Semiconductor Manufacturing stock introduces a direct equity investment into a leading technology company, further diversifying the portfolio's sectoral exposure. The minimal allocation to cash and bonds, primarily through the Fidelity Balanced Fund and the Fidelity Government Money Market Fund, indicates a balanced risk profile aiming to combine growth with a degree of stability.

Growth Info

The portfolio has demonstrated strong historical performance, with a Compound Annual Growth Rate (CAGR) of 14.83%. This is indicative of robust growth over time, although the maximum drawdown of -31.48% signals periods of significant volatility. Such drawdowns are a reminder of the inherent risks in equity-focused investments. The fact that 90% of returns were generated in just 39 days highlights the unpredictable nature of stock markets, where a few days can disproportionately affect overall performance.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential future values for this portfolio. With 997 out of 1,000 simulations showing positive returns, the analysis forecasts an optimistic outlook. However, the broad spread between the 5th and 67th percentiles underscores the uncertainty and risk involved. It's essential to remember that such simulations are hypothetical and cannot guarantee future results.

Asset classes Info

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

The portfolio's asset class distribution, with a dominant 93% in stocks, aligns with its balanced risk classification but leans towards a more aggressive growth strategy. The 6% bond allocation and 1% in cash provide some cushion against market volatility but may not be sufficient in severe downturns. This composition is well-suited for investors with a medium to long-term horizon and a moderate risk tolerance.

Sectors Info

  • Technology
    32%
  • Financials
    15%
  • Industrials
    10%
  • Consumer Discretionary
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sectoral allocation reveals a heavy emphasis on technology, followed by financial services and industrials. This concentration in tech exposes the portfolio to sector-specific risks, such as regulatory changes or market sentiment shifts. However, it also positions the portfolio to benefit from technological advancements and innovation. Diversifying across a broader range of sectors could mitigate some risks while still capturing growth opportunities.

Regions Info

  • North America
    64%
  • Asia Emerging
    13%
  • Europe Developed
    13%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographic exposure is well-diversified, with a strong presence in North America and significant investments in Asia Emerging and Europe Developed regions. This international diversification helps spread risk across different economies and markets, potentially reducing volatility and improving returns. However, the concentration in North America, while reflective of the global market's structure, may warrant a review to ensure alignment with the investor's diversification goals.

Market capitalization Info

  • Mega-cap
    46%
  • Large-cap
    27%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's market capitalization breakdown, favoring mega and big-cap stocks, suggests a conservative approach within its equity allocation, aiming for stability and lower volatility associated with larger, well-established companies. However, the limited exposure to small and micro-cap stocks might mean missing out on higher growth potential offered by these segments. Balancing this with a modest increase in smaller cap investments could enhance growth prospects without significantly raising the portfolio's overall risk profile.

Redundant positions Info

  • Fidelity Total Market Index Fund
    FIDELITY BALANCED FUND FIDELITY BALANCED FUND
    Fidelity 500 Index Fund
    High correlation

The high correlation observed among the Fidelity Total Market Index Fund, Fidelity Balanced Fund, and Fidelity 500 Index Fund indicates overlapping exposures that may not contribute to diversification. This redundancy could magnify risks during market downturns. Streamlining the portfolio by reducing overlap can enhance efficiency and potentially lead to better risk-adjusted 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.

The portfolio's current asset allocation and highly correlated assets indicate room for optimization towards the Efficient Frontier, which aims for the highest possible return for a given level of risk. Focusing on diversification and reducing overlap can help achieve a more efficient portfolio. This process involves reassessing the necessity of each investment and potentially reallocating funds to reduce redundancy and improve the overall risk-return profile.

Dividends Info

  • FIDELITY BALANCED FUND FIDELITY BALANCED FUND 5.20%
  • Fidelity Total Market Index Fund 1.00%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.30%
  • Fidelity 500 Index Fund 1.10%
  • Fidelity® Government Money Market Fund 3.10%
  • Taiwan Semiconductor Manufacturing 0.80%
  • Weighted yield (per year) 2.09%

The portfolio's average dividend yield of 2.09% contributes to its total return, providing a steady income stream in addition to capital appreciation. The varied yields across different funds and the direct equity holding in Taiwan Semiconductor Manufacturing suggest a strategic approach to balancing income generation with growth. Regularly reviewing dividend performance and adjusting allocations can help maintain an optimal income-growth balance.

Ongoing product costs Info

  • FIDELITY BALANCED FUND FIDELITY BALANCED FUND 0.47%
  • Fidelity Total Market Index Fund 0.02%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.11%

With a total expense ratio (TER) of 0.11%, the portfolio benefits from low costs, which is crucial for maximizing long-term returns. The low fees are especially commendable given the portfolio's broad diversification and international exposure. Keeping costs low is a fundamental principle of investing that this portfolio adheres to well.

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