Balanced portfolio with a strong focus on large-cap equities and moderate diversification
Report created on Jul 19, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
FX Fidelity 500 Index Fund
FXAIX - US3159117502 59.09% -
BR Berkshire Hathaway Inc
BRK-B - US0846707026 35.51% -
SP Fidelity® Government Money Market Fund
SPAXX - US31617H1023 5.40%
The portfolio is heavily weighted towards equities, with a significant 59.09% in the Fidelity 500 Index Fund and a substantial 35.51% in Berkshire Hathaway Inc., a common stock. This concentration in large-cap equities, complemented by a 5.40% allocation in the Fidelity® Government Money Market Fund for liquidity, indicates a strategy focused on growth through well-established companies. The overall composition suggests a preference for the stability and potential returns of large-cap stocks, balanced by a small cushion of cash equivalents to manage short-term volatility or liquidity needs.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 13.49%, with a maximum drawdown of -31.10%. These figures highlight the portfolio's ability to generate substantial returns, albeit with significant volatility. The days contributing to 90% of returns being limited to 31.0 days underscores the impact of short-term, high-gain periods on overall performance. This historical performance, while impressive, should be considered with the understanding that past results do not guarantee future success.
Projection
Monte Carlo simulations, utilizing historical data to project future outcomes, indicate a wide range of potential performances, with a median increase of 249.5% and a 67th percentile performance possibly reaching 348.0%. These projections, while optimistic, are inherently uncertain and should be viewed as one of many tools in assessing potential future outcomes. It's important to remember that these simulations are based on past data, which may not accurately predict future market conditions.
Asset classes
- Stocks 95%
- No data 5%
The portfolio's allocation shows a strong preference for stocks, with a 95% investment in equities and a 5% allocation to cash equivalents. This distribution aligns with the portfolio's balanced risk profile but leans towards a growth-oriented strategy. The heavy emphasis on equities is suitable for investors with a moderate risk tolerance and a long-term investment horizon, aiming for higher returns at the expense of short-term volatility.
Sectors
- Financials 44%
- Technology 18%
- Health Care 7%
- Consumer Discretionary 6%
- Telecommunications 6%
- No data 5%
- Industrials 4%
- Consumer Staples 4%
- Energy 2%
- Utilities 2%
- Real Estate 1%
- Basic Materials 1%
Sector allocation is concentrated in financial services (44%) and technology (18%), followed by healthcare and consumer cyclical sectors. This concentration in financials and tech suggests a bullish outlook on these industries but also introduces sector-specific risks. Diversifying across more sectors could mitigate some of this risk, potentially smoothing out volatility and improving the portfolio's resilience against sector-specific downturns.
Regions
- North America 94%
- No data 5%
With 94% of assets allocated to North America, the portfolio's geographic exposure is heavily skewed towards the U.S. market. This concentration enhances exposure to the U.S. economy's growth potential but also increases vulnerability to region-specific economic downturns. Expanding geographic diversification could provide a buffer against U.S.-centric risks and tap into growth opportunities in other regions.
Market capitalization
- Mega-cap 63%
- Large-cap 20%
- Mid-cap 11%
- No data 5%
The portfolio's focus on mega (63%) and big (20%) cap stocks underscores a preference for established, large-scale companies, likely due to their historical stability and potential for steady growth. While this focus may reduce exposure to the higher volatility of smaller companies, it also limits the potential high-growth opportunities that smaller caps can offer.
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.
Considering the portfolio's current composition and performance, utilizing the Efficient Frontier could identify opportunities to adjust asset allocation for an optimal risk-return balance. While the portfolio already demonstrates strong growth characteristics with moderate risk, there may be room to fine-tune the allocation to further enhance returns or reduce volatility without significantly increasing risk.
Dividends
- Fidelity 500 Index Fund 0.90%
- Fidelity® Government Money Market Fund 4.00%
- Weighted yield (per year) 0.75%
The portfolio's dividend yield, primarily driven by the Fidelity 500 Index Fund's 0.90% and the Fidelity® Government Money Market Fund's 4.00%, contributes to a total yield of 0.75%. While not the primary focus, these dividends provide a modest income stream and can offer a buffer during market volatility, contributing to the portfolio's overall return.
Ongoing product costs
- Fidelity 500 Index Fund 0.02%
- Weighted costs total (per year) 0.01%
With exceptionally low total portfolio costs (TotalTER 0.01%), the portfolio is positioned well for long-term growth by minimizing the drag on performance due to fees. This efficient cost structure is commendable, as it allows a greater portion of investment returns to compound over time, enhancing the potential for wealth accumulation.
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