Two index funds pretending to be diversified while secretly just hugging the US mega caps
Report created on May 21, 2026Risk profile
5/7
Diversification profile
3/5
Positions
-
FX Fidelity 500 Index Fund
FXAIX - US3159117502 80.00% -
FZ FIDELITY ZERO INTERNATIONAL INDEX FUND
FZILX - US31635T6091 20.00%
This portfolio is the investing equivalent of ordering the sampler platter and then eating almost only the fries. Two funds, 100% stocks, 80% locked into a plain-vanilla US large-cap index and 20% tossed into a zero-fee international side dish to feel worldly. Structurally it’s brutally simple, which is nice, but also a bit lazy: no bonds, no defensive ballast, no nuance. Composition-wise, it’s basically “own the US giant companies and, fine, a token nod to the rest of the planet.” The upside is clarity: what you see is exactly what you get. The downside is that what you get is pretty one-note when markets stop being friendly.
Growth
Historically, this thing did well enough that it’s easy to mistake luck plus a US bull run for genius. Turning $1,000 into $2,762 with a 13.98% CAGR looks great on a chart, until you notice the plain US market did even better at 15.06%. You bought the S&P 500 with training wheels and somehow still came in slightly behind it. On the flip side, you did beat the global market, which mostly says “congrats on leaning into the US during a US-dominated decade.” The -33.64% max drawdown shows that this “growth” label comes with fully adult-sized crashes, not some cute baby volatility.
Projection
The Monte Carlo simulation is basically a thousand “what if?” timelines for this portfolio, and most of them say, “You’ll probably be fine, but don’t get cocky.” Median $1,000 turning into $2,759 over 15 years tells you expectations are more modest than the backward-looking chart. The likely range from about $1,774 to $4,439 is a polite way of saying results could be solid or just okay. The ugly tails are still very real: $988 on the low side is eerily close to “15 years for nothing.” Simulations use past-like behavior, which is handy, but it’s still yesterday’s weather forecast applied to tomorrow’s storm.
Asset classes
- Stocks 100%
Asset class breakdown: 100% stocks, zero subtlety. This is not a “growth-leaning” portfolio; it’s an “all-in on the equity roller coaster, no seatbelt” portfolio. There’s no bonds, no cash bucket, no diversifying ballast — just equities everywhere, all the time. That’s fun when markets rise and considerably less fun when they decide to reenact 2020 or 2008. Asset allocation is often called the main driver of risk and return, and here the message is simple: maximum participation in market upside, equal enthusiasm for every crash. It’s pure risk-on, which is elegant on paper and unforgiving in real life drawdowns.
Sectors
- Technology 30%
- Financials 15%
- Industrials 10%
- Consumer Discretionary 10%
- Telecommunications 9%
- Health Care 9%
- Consumer Staples 5%
- Energy 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
Sector-wise, this portfolio has strong “I bought the market and called it a day” energy, but with a tech crush. Around 30% in technology screams dependence on one engine to pull the whole train. Financials, industrials, and consumer discretionary get decent supporting roles, while defensives like staples, utilities, and real estate are tiny cameos at the bottom of the credits. That’s fine if the growth darlings keep delivering, less fine when the expensive, buzzy parts of the market hit an air pocket. It’s basically riding the economic cycle with minimal padding — very pro-boom, very pro-bust, not so pro-sleep-at-night.
Regions
- North America 81%
- Europe Developed 8%
- Japan 3%
- Asia Developed 3%
- Asia Emerging 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, the word “global” here is doing a lot of heavy lifting it did not sign up for. Around 81% is in North America, so this is functionally a US portfolio with a travel sticker slapped on the suitcase. Europe, Japan, and the rest of the world are background noise, not real drivers. The irony is you actually hold an “international” fund, yet it barely dents the home-country bias. This isn’t broad global diversification; it’s “USA first, second, and third, with a tiny international shrug.” If the US shines, you look smart. If it lags, you discover quickly how concentrated that bet really is.
Market capitalization
- Mega-cap 47%
- Large-cap 35%
- Mid-cap 17%
- Small-cap 1%
Market cap exposure is almost a carbon copy of a mainstream large-cap index: nearly half in mega-caps, another chunk in large-caps, with mid-caps as a small supporting cast and small-caps barely on the stage at 1%. So yes, you’re diversified across a lot of companies, but they’re mostly the biggest, most followed, most crowded names on the planet. This is like calling a restaurant menu diverse because they offer burgers in three sizes. There’s almost no deliberate tilt to smaller companies, which means less potential diversification from different business dynamics — it’s just “own the giants, ignore the scrappy underdogs.”
Factors
Factor-wise, this portfolio is aggressively… boring. Value, size, momentum, quality, and low volatility all sit around neutral, meaning you’ve basically bought the average personality of the stock market. Yield stands out as low, so you’ve accidentally dodged the “chasing income” trap, but at the cost of relying more on price appreciation than payouts. Factor exposure is like checking what flavors actually went into your ice cream — here, it’s just plain vanilla with a small “don’t expect big dividends” label. The upside is you’re not making any wild, accidental bets. The downside is you’re also not intentionally leaning into any particular edge.
Risk contribution
-
Fidelity 500 Index Fund
Weight: 80.00% 83.5% -
FIDELITY ZERO INTERNATIONAL INDEX FUND
Weight: 20.00% 16.6%
Risk contribution tells you who’s actually driving the drama, and shocker: the 80% US fund is doing 83% of the risk heavy lifting. The international slice is the kid brother contributing just 16.55% of total risk despite its 20% weight. That means this portfolio’s emotional roller coaster is almost entirely chained to the fate of US large caps. Even if the international side has a great or terrible year, it’s basically just tweaking the mood, not rewriting the story. This concentration in one risk engine makes the portfolio simple to understand but also brutally exposed to whatever the US market decides to do.
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 risk vs. return chart, this portfolio actually behaves like it read a textbook for once. It sits on or very close to the efficient frontier, meaning that for this particular set of holdings, you’re not squandering return for no reason. Sharpe ratio of 0.58 is lower than the theoretically optimal 0.76 setup, but that’s more about fine-tuning than fundamental brokenness. In plain English: given that you only use two funds, the risk/return tradeoff is surprisingly efficient. The roast here isn’t about optimization — it’s about the fact that the efficient thing you built is still just an unhedged equity rocket.
Dividends
- Fidelity 500 Index Fund 1.10%
- FIDELITY ZERO INTERNATIONAL INDEX FUND 2.40%
- Weighted yield (per year) 1.36%
The portfolio’s total yield of 1.36% is basically a polite “don’t expect much cash back.” The main US fund runs lean at around 1.10%, and the international piece pulls the average up a bit with 2.40%, but this is still very much a “growth via price moves” setup. Dividends are pocket change here, not a real strategy. If someone tried to pitch this as an income machine, they’d be doing stand-up comedy. It’s fine — reinvested dividends can quietly help — but in this portfolio, they’re more background ambiance than a defining feature.
Ongoing product costs
- Fidelity 500 Index Fund 0.02%
- Weighted costs total (per year) 0.02%
Costs are almost suspiciously low at 0.02% TER — like someone at Fidelity misplaced a decimal and never fixed it. You’re basically renting the entire US stock market (plus a bit of international) for the price of loose couch change each year. There’s nothing to roast on fees except the fact that the rest of the portfolio isn’t as thoughtfully constructed as the cost side. You nailed frugality but then spent that success on maximum equity risk and a US-heavy stance. Think of it as driving a super fuel-efficient car straight into every storm front you can find.
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