Growth-oriented portfolio with a strong focus on stocks and international diversification
Report created on Jun 5, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
FZ FIDELITY ZERO TOTAL MARKET INDEX FUND
FZROX - US31635T7081 60.00% -
FZ FIDELITY ZERO INTERNATIONAL INDEX FUND
FZILX - US31635T6091 40.00%
This portfolio is constructed with a 60% allocation to the Fidelity Zero Total Market Index Fund and a 40% allocation to the Fidelity Zero International Index Fund. This setup indicates a strategic emphasis on broad market exposure, combining U.S. equities with significant international diversification. The exclusive investment in stock funds aligns with a growth-oriented risk profile, aiming to capitalize on the equity market's potential for higher returns over time. Such a configuration is particularly appealing for investors looking to benefit from global economic growth while being mindful of the volatility associated with stock investments.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.62%, with a maximum drawdown of -34.29%. These figures suggest a resilient performance through various market cycles, balancing growth with a moderate level of risk. The days contributing to 90% of the returns being limited to 14 indicates that the portfolio's gains are concentrated in specific periods, highlighting the importance of staying invested through market fluctuations to capture significant growth opportunities.
Projection
Monte Carlo simulations, using historical data to forecast future outcomes, suggest a wide range of potential portfolio values. With key percentiles at 9.2%, 262.5%, and 403.7%, and an annualized return of 11.26% across all simulations, the projections underscore the portfolio's potential for substantial growth. However, it's crucial to remember that these simulations are based on past performance, which is not a reliable indicator of future results. The high percentage of simulations with positive returns (96.2%) does, however, provide a degree of confidence in the portfolio's resilience.
Asset classes
- Stocks 100%
The portfolio's exclusive allocation to stocks is indicative of a high-growth strategy but also implies a higher risk level, consistent with its risk classification. This single-asset class focus may limit the portfolio's ability to hedge against stock market volatility through diversification into other asset types like bonds or real estate. For investors with a growth profile, this approach is suitable, but it's crucial to ensure that this level of risk aligns with one's risk tolerance and investment time horizon.
Sectors
- Technology 23%
- Financials 18%
- Industrials 11%
- Consumer Discretionary 10%
- Health Care 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Basic Materials 4%
- Utilities 3%
- Real Estate 3%
With sector allocations heavily weighted towards technology and financial services, the portfolio is positioned to benefit from growth in these dynamic sectors. However, this concentration also exposes it to sector-specific risks, such as regulatory changes or economic shifts affecting these industries. The diversified exposure across other sectors like industrials, healthcare, and consumer cyclicals does help mitigate this risk to some extent, providing a balanced approach to sectoral investment.
Regions
- North America 63%
- Europe Developed 16%
- Japan 7%
- Asia Emerging 5%
- Asia Developed 4%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
The geographic distribution of this portfolio, with a dominant 63% allocation to North America and significant exposures to developed Europe and Japan, reflects a strategic emphasis on established markets. While this may offer stability and reliability, the relatively lower exposure to emerging markets could mean missed opportunities for higher growth. Diversifying further into these regions could enhance potential returns, albeit with added risk.
Market capitalization
- Mega-cap 46%
- Large-cap 31%
- Mid-cap 17%
- Small-cap 4%
- Micro-cap 1%
The portfolio's emphasis on mega and big-cap stocks (77% combined) suggests a preference for established, large-scale companies known for their stability and potential for steady growth. While this may reduce volatility compared to portfolios with higher allocations to small or micro-cap stocks, it might also limit opportunities for outsized gains that smaller companies can offer. Including a broader range of market capitalizations could enhance diversification and growth prospects.
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 Efficient Frontier, the portfolio appears well-positioned for growth within its current risk profile. However, there may be opportunities to optimize further by adjusting asset allocations for an even better risk-return ratio. This doesn't necessarily mean diversifying into different asset classes but could involve rebalancing between the existing funds to capture efficiencies. Regular review and adjustment in response to changing market conditions and personal financial goals are essential for maintaining optimal alignment.
Dividends
- FIDELITY ZERO INTERNATIONAL INDEX FUND 2.60%
- FIDELITY ZERO TOTAL MARKET INDEX FUND 1.10%
- Weighted yield (per year) 1.70%
The portfolio's overall dividend yield of 1.70% contributes to its total return, blending growth and income. This yield, derived from the blend of domestic and international stock funds, offers a modest income stream, which can be particularly appealing for investors looking for regular income in addition to capital appreciation. However, the focus on growth means dividends are not the primary objective; investors prioritizing higher income might explore options with higher yielding assets.
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