A growth-focused portfolio with a strong US bias and moderate risk exposure

Report created on Jan 5, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

1/5
Single-Focused
Less diversification More diversification

Positions

This portfolio is heavily weighted towards equity funds, with a significant 46.3% in the Fidelity 500 Index Fund and 19.7% in the Fidelity Zero Large Cap Index Fund. The remaining allocations are spread across various ETFs, focusing on aggressive growth and small-cap value. Compared to common benchmarks, this composition leans heavily on large-cap US equities, which may limit diversification benefits. Balancing with more international or alternative asset classes could enhance risk management and return potential.

Growth Info

Historically, this portfolio has demonstrated an impressive Compound Annual Growth Rate (CAGR) of 15.77%. This growth rate indicates strong historical performance, outpacing typical market benchmarks. However, the portfolio has also experienced a maximum drawdown of -34.43%, highlighting its vulnerability during market downturns. While past performance is not indicative of future results, this history suggests a high-risk, high-reward profile, which may appeal to growth-oriented investors.

Projection Info

Using Monte Carlo simulations, this portfolio's potential future performance was analyzed. Monte Carlo simulation uses historical data to estimate a range of possible outcomes by running numerous scenarios. The results suggest a median (50th percentile) return of 433.35% over the simulation period, with 975 out of 1,000 simulations showing positive returns. However, it's essential to remember that these projections are based on historical data and do not guarantee future results.

Asset classes Info

  • Stocks
    97%
  • Bonds
    2%

The portfolio is predominantly composed of stocks, representing over 97% of the total allocation. This high equity exposure aligns with a growth strategy but may introduce significant volatility. Bonds and cash make up a minimal portion, limiting the potential for stability during market fluctuations. Diversifying into other asset classes, such as bonds or real estate, could help reduce risk and provide a more balanced approach to long-term growth.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Industrials
    11%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Discretionary
    7%
  • Consumer Staples
    6%
  • Consumer Discretionary
    5%
  • Energy
    5%
  • Basic Materials
    3%
  • Utilities
    2%
  • Real Estate
    2%

Sector-wise, the portfolio is concentrated in technology (26.8%), financial services (16%), and industrials (10.9%). This concentration reflects a typical growth-focused strategy, but it may expose the portfolio to sector-specific risks. For instance, technology-heavy portfolios can be more volatile, especially during periods of regulatory changes or interest rate hikes. Balancing sector exposure could mitigate these risks and enhance diversification.

Regions Info

  • North America
    81%
  • Asia Emerging
    2%
  • Europe Developed
    2%
  • Japan
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America, with 80.99% exposure. This concentration may limit diversification benefits and increase vulnerability to regional economic downturns. Expanding geographic exposure, particularly in emerging markets or underrepresented regions, could enhance diversification and capture growth opportunities outside the US.

Redundant positions Info

  • Fidelity 500 Index Fund
    FIDELITY ZERO LARGE CAP INDEX FUND
    High correlation

The portfolio includes highly correlated assets, particularly the Fidelity 500 Index Fund and the Fidelity Zero Large Cap Index Fund. High correlation means these assets often move in tandem, which can reduce diversification benefits. By replacing one of these funds with a less correlated asset, the portfolio could achieve better risk management and potentially improve returns during volatile periods.

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 be optimized using the Efficient Frontier, which helps identify the best possible risk-return ratio. This approach suggests reallocating within existing assets to achieve a balance between risk and return. However, it's important to note that this optimization focuses on current holdings and doesn't necessarily address broader diversification goals.

Dividends Info

  • iShares Core Aggressive Allocation ETF 1.30%
  • Avantis® International Small Cap Value ETF 4.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Fidelity 500 Index Fund 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 3.20%
  • Invesco S&P MidCap Momentum ETF 0.20%
  • Weighted yield (per year) 1.11%

The portfolio's overall dividend yield is 1.11%, with the highest yield coming from the Avantis International Small Cap Value ETF at 4.3%. Dividends can provide a steady income stream and help cushion against price volatility. For growth-focused investors, balancing dividend-paying assets with growth-oriented ones can offer both income and capital appreciation.

Ongoing product costs Info

  • iShares Core Aggressive Allocation ETF 0.15%
  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Fidelity 500 Index Fund 0.02%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.09%

With a Total Expense Ratio (TER) of 0.09%, the portfolio is cost-efficient, benefiting long-term performance. Low costs mean more of your returns stay invested, compounding over time. It's crucial to maintain this efficiency by periodically reviewing the portfolio for any high-fee assets that could be replaced with more cost-effective alternatives.

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