Balanced portfolio with a strong focus on equity index funds and international diversification

Report created on Jul 19, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio is primarily composed of two funds: a domestic equity index fund representing 70% of the portfolio and an international equity index fund accounting for the remaining 30%. This structure underlines a strategic emphasis on stock investments, with a modest but significant allocation towards international markets. The balance between domestic and international exposure is crucial for spreading risk and tapping into global growth opportunities. However, the portfolio's diversification could be further enhanced by incorporating more asset classes or sectors, especially those underrepresented or absent, such as bonds or alternative investments.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 12.98%, with a maximum drawdown of -33.68%. The drawdown figure suggests a period of significant value decline, which is an important risk consideration. The days contributing most to returns indicate that a small number of days drove a large portion of the portfolio's performance. This volatility underscores the importance of staying invested over the long term, as missing these key days can substantially impact overall returns. Comparing this performance to a relevant benchmark would provide further context on its relative strength.

Projection Info

Monte Carlo simulations, which use historical data to forecast a range of possible future outcomes, suggest a median increase of 322.8% in portfolio value. With 977 out of 1,000 simulations showing positive returns, the forward-looking projection is generally optimistic. However, it's crucial to remember that these projections are speculative and based on past performance, which is not a reliable indicator of future results. Investors should consider these forecasts as part of a broader decision-making framework, not as guarantees.

Asset classes Info

  • Stocks
    29%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks, with a 29% allocation, and a minimal cash position of 1%. This allocation aligns with the portfolio's balanced risk profile but leans towards a growth-oriented strategy. Including a broader range of asset classes could provide more stability during market downturns and potentially enhance returns over different market cycles. For instance, adding fixed-income securities or real estate investment trusts (REITs) could offer income generation and further risk diversification.

Sectors Info

  • Financials
    7%
  • Industrials
    5%
  • Technology
    4%
  • Consumer Discretionary
    3%
  • Health Care
    2%
  • Basic Materials
    2%
  • Consumer Staples
    2%
  • Telecommunications
    2%
  • Energy
    1%
  • Utilities
    1%
  • Real Estate
    1%

Sectoral allocation within this portfolio is relatively balanced, with financial services, industrials, and technology leading. This spread across sectors can help mitigate sector-specific risks but may still expose the portfolio to market-wide fluctuations. Given the rapid pace of change in sectors like technology, staying informed on sector trends and adjusting allocations accordingly can be beneficial. Additionally, exploring underrepresented sectors could uncover new growth opportunities and further balance the portfolio.

Regions Info

  • Europe Developed
    12%
  • Japan
    5%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • North America
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The geographic distribution shows a strong emphasis on developed markets, particularly in Europe and Japan, alongside a balanced exposure to emerging markets in Asia. This global footprint is advantageous for capturing growth across different economies. However, the modest allocation to North America, considering the investor's US base, suggests a potential underweight in the home market. Balancing domestic and international exposure can help in leveraging local market stability while still participating in global growth dynamics.

Market capitalization Info

  • Mega-cap
    13%
  • Large-cap
    9%
  • Mid-cap
    5%
  • Small-cap
    1%

Market capitalization exposure leans towards mega and big cap stocks, which typically offer stability and lower volatility compared to smaller companies. However, this focus might limit the portfolio's growth potential, as medium, small, and micro-cap stocks can offer higher growth prospects, albeit with increased risk. Diversifying across different market caps could enhance returns and provide a more balanced risk profile, especially in a growth-oriented investment strategy.

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.

Regarding risk versus return optimization, the portfolio's current composition suggests a focus on achieving a balance between growth and risk management, primarily through equity investments. Utilizing the Efficient Frontier concept could identify opportunities to adjust asset allocations for an optimal risk-return ratio. However, it's essential to remember that optimization is based on historical data and assumptions about future performance, which may not always hold true. Regular reviews and adjustments are necessary to adapt to changing market conditions and investment goals.

Dividends Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.40%
  • Weighted yield (per year) 0.72%

The dividend yield from the international fund contributes to the portfolio's income, albeit modestly. This yield, combined with the growth potential of the equity funds, provides a balanced approach to income generation and capital appreciation. For investors seeking higher income, exploring funds or assets with higher dividend yields or incorporating fixed-income securities could offer a more substantial income stream alongside growth investments.

Ongoing product costs Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from exceptionally low costs, with the Total Expense Ratio (TER) of the international fund at 0.06% and an overall portfolio TER of just 0.02%. These low costs are commendable, as they directly enhance net returns by minimizing the drag on performance. Investors should continue to prioritize cost efficiency when considering new investments or rebalancing the portfolio, as high costs can significantly erode long-term investment gains.

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