A growth-focused portfolio with strong U.S. exposure and moderate diversification

Report created on Mar 19, 2025

Risk profile Info

5/7
Growth
← Less risk More risk →

Diversification profile Info

4/5
Broadly Diversified
← Less diversification More diversification →

Positions

The portfolio is heavily weighted towards equity funds, with a significant focus on large-cap U.S. stocks. This composition aligns with a growth-oriented strategy, emphasizing capital appreciation. The Fidelity 500 Index Fund represents the largest position, indicating a preference for broad market exposure. Compared to a typical benchmark, this portfolio leans more towards U.S. equities, which can be advantageous if the U.S. market continues to perform well. However, it might benefit from further diversification into other asset classes like bonds or international equities to balance risk. Consider adjusting weights to align with a more diversified benchmark to enhance stability.

Growth Info

Historically, the portfolio has delivered a robust Compound Annual Growth Rate (CAGR) of 11.71%, outperforming many standard benchmarks. This impressive growth rate indicates effective asset selection and market timing. A maximum drawdown of -34.88% highlights the portfolio's vulnerability during market downturns, which is a typical risk for growth-oriented strategies. While past performance is not indicative of future results, maintaining a similar asset allocation could continue to yield high returns. To mitigate potential drawdowns, consider incorporating more defensive assets or strategies that provide downside protection.

Projection Info

The Monte Carlo simulation, which uses historical data to predict future outcomes, suggests a promising forward projection. With 950 out of 1,000 simulations showing positive returns and an annualized return of 12.62%, the portfolio appears well-positioned for future growth. However, it's essential to remember that these projections are based on past data and cannot account for unforeseen market events. To enhance predictability, regularly review and adjust the portfolio in response to changing market conditions and personal investment goals.

Asset classes Info

  • Stocks
    98%
  • Bonds
    3%

The portfolio is predominantly composed of stocks (98%), with a negligible allocation to bonds (3%). This heavy equity focus aligns with a high-growth strategy but may expose the portfolio to significant volatility. Compared to a balanced benchmark, this allocation lacks the stability typically provided by bonds. Diversifying into fixed-income securities could offer a buffer against market fluctuations and provide more consistent returns. Consider gradually increasing bond exposure to achieve a more balanced risk-return profile, especially if nearing retirement or seeking to preserve capital.

Sectors Info

  • Technology
    26%
  • Financials
    15%
  • Consumer Discretionary
    12%
  • Industrials
    10%
  • Health Care
    10%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Energy
    4%
  • Basic Materials
    4%
  • Real Estate
    3%
  • Utilities
    3%

The portfolio shows a strong concentration in the technology sector, comprising 26% of the total allocation. This tech-heavy focus can drive significant growth, especially in booming markets, but also introduces higher volatility. Financial services and consumer cyclical sectors also have notable representation, offering diversification across different economic cycles. However, the portfolio might be vulnerable to sector-specific downturns, particularly if interest rates rise. To mitigate this risk, consider diversifying into less volatile sectors like utilities or consumer defensive, which can provide stability during economic downturns.

Regions Info

  • North America
    83%
  • Europe Developed
    9%
  • Japan
    3%
  • Asia Emerging
    2%
  • Asia
    1%
  • Australasia
    1%
  • Latin America
    1%

With 83% of assets allocated to North America, the portfolio is heavily skewed towards the U.S. market. While this can be beneficial given the historical outperformance of U.S. equities, it limits exposure to international growth opportunities. The remaining geographic allocation is modestly spread across Europe and Asia, with minimal representation in emerging markets. To enhance global diversification, consider increasing exposure to international markets, particularly in regions with high growth potential. This strategy can help reduce reliance on the U.S. market and capitalize on global economic trends.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    23%
  • Mid-cap
    22%
  • Small-cap
    11%
  • Micro-cap
    5%

The portfolio features a diverse mix of market capitalizations, with a significant emphasis on mega-cap stocks (37%). This allocation provides stability and steady growth potential, as large companies often have established market positions. Medium and small-cap stocks also contribute to the portfolio, offering higher growth prospects but increased volatility. Compared to a typical benchmark, this distribution is well-balanced, supporting both growth and risk management. To further enhance diversification, consider adjusting the weightings to reflect changing market dynamics and capitalize on emerging opportunities in smaller-cap segments.

Redundant positions Info

  • Fidelity Blue Chip Growth K6 Fund
    FIDELITY FREEDOM 2055 FUND CLASS K6
    Fidelity Total Market Index Fund
    FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS
    FIDELITY NASDAQ COMPOSITE INDEX FUND FIDELITY NASDAQ COMPOSITE INDEX FUND
    Fidelity 500 Index Fund
    FIDELITY LARGE CAP GROWTH INDEX FUND INSTITUTIONAL PREMIUM CLASS
    Fidelity Contrafund K6
    FIDELITY FREEDOM INDEX 2055 FUND INSTITUTIONAL PREMIUM CLASS
    High correlation
  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
    FIDELITY INTERNATIONAL VALUE FUND FIDELITY ADVISOR INTERNATIONAL VALUE FUND: CLASS Z
    High correlation

The portfolio contains several highly correlated assets, particularly among U.S. equity funds. This correlation indicates that these assets tend to move in tandem, potentially limiting diversification benefits. In times of market downturns, such correlation can exacerbate losses. To improve diversification and reduce risk, consider replacing some of these overlapping funds with assets that have a lower correlation to the existing portfolio. This strategy can enhance the portfolio's resilience and provide more consistent returns across different market conditions.

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 allocation could be optimized using the Efficient Frontier, which identifies the best possible risk-return ratio based on existing assets. This optimization focuses on reallocating within the current holdings to achieve maximum efficiency. However, the presence of highly correlated assets suggests that diversification benefits are not fully realized. Before optimizing, consider removing or replacing overlapping funds to enhance diversification. This approach can lead to a more efficient portfolio, balancing risk and return while maintaining alignment with growth objectives.

Dividends Info

  • Fidelity Blue Chip Growth K6 Fund 0.70%
  • FIDELITY FREEDOM INDEX 2055 FUND INSTITUTIONAL PREMIUM CLASS 0.10%
  • FIDELITY GROWTH & INCOME PORTFOLIO CLASS K 1.10%
  • Fidelity Small Cap Value Index Fund 0.70%
  • Fidelity Contrafund K6 0.30%
  • FIDELITY NASDAQ COMPOSITE INDEX FUND FIDELITY NASDAQ COMPOSITE INDEX FUND 0.70%
  • Fidelity Total Market Index Fund 1.20%
  • FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 1.20%
  • FIDELITY LARGE CAP GROWTH INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.40%
  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.90%
  • Fidelity 500 Index Fund 1.30%
  • Weighted yield (per year) 0.72%

The portfolio's overall dividend yield stands at 0.72%, reflecting a focus on growth rather than income generation. While dividends contribute to total returns, this yield is relatively low compared to income-focused portfolios. For investors seeking regular income, increasing exposure to higher-yielding assets may be beneficial. However, given the growth orientation, maintaining a lower yield can be advantageous, allowing for reinvestment and compounding. To balance growth with income, consider selectively incorporating dividend-paying stocks or funds that align with the portfolio's risk profile.

Ongoing product costs Info

  • Fidelity Total Market Index Fund 0.02%
  • FIDELITY LARGE CAP GROWTH INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.04%
  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.04%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.01%

The portfolio benefits from impressively low costs, with a Total Expense Ratio (TER) of 0.01%. This efficient cost structure supports better long-term performance by minimizing the drag on returns. Low-cost index funds, such as the Fidelity Total Market Index Fund, contribute significantly to this efficiency. Compared to industry averages, the portfolio's costs are exceptionally competitive, enhancing net returns over time. To maintain this advantage, continue prioritizing low-cost investment options and regularly review expense ratios to ensure cost-effectiveness remains aligned with investment goals.

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