A strategic blend of target-date and S&P 500 index funds for long-term growth

Report created on Jul 20, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

Your portfolio primarily consists of two mutual funds: the Fidelity Freedom Index 2055 Fund Investor Class, taking up 70%, and the Fidelity 500 Index Fund, covering the remaining 30%. This composition suggests a strategic focus on long-term growth, leveraging the broad market exposure through the S&P 500 and a target-date fund that automatically adjusts its asset allocation towards more conservative investments as the target year approaches. The blend aims to balance growth potential with risk management over time.

Growth Info

Historically, your portfolio has achieved a Compound Annual Growth Rate (CAGR) of 11.46%, with a maximum drawdown of -31.75%. This performance metric indicates a strong growth trajectory over the examined period, though the drawdown highlights the potential volatility and risk associated with your investments. Comparing these figures to benchmarks can provide further insight into the portfolio's relative performance, considering the inherent market risks.

Projection Info

Monte Carlo simulations, which use historical data to project potential future outcomes, suggest a wide range of possible performance scenarios for your portfolio. With a median projected growth of 372.3%, and 992 out of 1,000 simulations showing positive returns, the forward-looking analysis supports an optimistic growth outlook. However, it's crucial to remember that these projections are speculative and depend on past market behaviors, which are not guaranteed to repeat.

Asset classes Info

  • Stocks
    93%
  • Bonds
    6%

The asset class distribution within your portfolio is heavily skewed towards stocks (93%), with a minor allocation in bonds (6%) and a negligible amount in cash (0%). This allocation aligns with a growth-oriented strategy, aiming for higher returns at the expense of increased volatility. The presence of bonds, although limited, provides a cushion against market downturns, contributing to risk management.

Sectors Info

  • Technology
    26%
  • Financials
    17%
  • Health Care
    10%
  • Consumer Discretionary
    10%
  • Industrials
    10%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector-wise, your portfolio shows a strong emphasis on technology (26%), financial services (17%), and a balanced spread across healthcare, consumer cyclical, and industrials (each at 10%). This sector allocation suggests a tilt towards industries with high growth potential but also exposes the portfolio to sector-specific risks, such as regulatory changes or economic cycles affecting these industries disproportionately.

Regions Info

  • North America
    74%
  • Europe Developed
    12%
  • Asia Emerging
    4%
  • Japan
    4%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is predominantly invested in North America (74%), with diversified but modest exposures to developed Europe (12%) and various emerging and developed markets in Asia, Australasia, and Africa/Middle East. This geographic distribution supports global diversification, reducing the risk of regional economic downturns affecting the entire portfolio, though the heavy North American focus may limit exposure to potential growth in emerging markets.

Market capitalization Info

  • Mega-cap
    43%
  • Large-cap
    31%
  • Mid-cap
    15%
  • Small-cap
    3%
  • Micro-cap
    1%

The market capitalization breakdown shows a preference for mega (43%) and big (31%) cap stocks, with smaller allocations to medium, small, and micro caps. This bias towards larger companies is typical for portfolios seeking stable growth and lower volatility, as these firms often have more established business models and global market presences.

Redundant positions Info

  • FIDELITY FREEDOM INDEX 2055 FUND INVESTOR CLASS
    Fidelity 500 Index Fund
    High correlation

The high correlation between the Fidelity Freedom Index 2055 Fund and the Fidelity 500 Index Fund indicates overlapping exposures, reducing the diversification benefits of holding both. While both funds contribute to the growth objective, their similar market behaviors during various economic conditions may not offer the risk mitigation expected from a diversified portfolio.

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 high correlation between your two main holdings, portfolio optimization could involve diversifying into assets with lower correlation to each other. This strategy aims to enhance the risk-return profile by spreading risk across uncorrelated assets, potentially smoothing out returns during market volatility. The Efficient Frontier model could help identify such opportunities, although it's based on historical data and assumptions about future returns and volatility.

Dividends Info

  • FIDELITY FREEDOM INDEX 2055 FUND INVESTOR CLASS 1.80%
  • Fidelity 500 Index Fund 0.90%
  • Weighted yield (per year) 1.53%

The dividend yields from the two funds contribute to the portfolio's total income, with a combined yield of 1.53%. While not the primary focus of a growth-oriented strategy, these dividends provide a stream of passive income, which can be reinvested to compound growth or used as cash flow, depending on your financial goals and needs.

Ongoing product costs Info

  • FIDELITY FREEDOM INDEX 2055 FUND INVESTOR CLASS 0.12%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) of 0.09% is impressively low, maximizing the potential for net returns. Keeping costs minimal is crucial for long-term investment strategies, as even small differences in fees can significantly impact cumulative returns over decades.

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