Balanced portfolio with a strong focus on US equities and low costs

Report created on Jul 31, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio predominantly comprises two funds: the Fidelity 500 Index Fund, accounting for 80% of the portfolio, and the Fidelity Total International Index Fund Institutional Premium Class, making up the remaining 20%. This composition reflects a heavy tilt towards US equities, given the significant allocation to the Fidelity 500 Index Fund, which tracks the performance of the S&P 500. The international fund diversifies the portfolio globally, albeit to a lesser extent. This structure suggests a balanced approach, aiming to capture the growth of large-cap US companies while moderately including international exposure.

Growth Info

Historically, the portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.47%, with a maximum drawdown of -33.71%. These figures indicate a strong performance, especially considering the drawdown, which reflects the portfolio's resilience during market downturns. The days contributing 90% of returns were relatively few, highlighting that significant gains were concentrated in specific periods. This performance history underscores the importance of staying invested over the long term to capture key growth moments.

Projection Info

Monte Carlo simulations, based on 1,000 iterations, suggest a wide range of potential outcomes, from a 5th percentile growth of 70.3% to a 67th percentile growth of 557.2%. The majority (993 simulations) forecasted positive returns, with an annualized return across all simulations at 13.27%. While these projections offer valuable insights, it's crucial to remember that they are based on historical data, which does not guarantee future performance. These simulations help in understanding potential volatility and outcomes, aiding in risk assessment and planning.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset allocation is heavily skewed towards stocks (99%), with a minimal cash holding (1%). This allocation is in line with the portfolio's balanced profile but leans towards a higher risk and return potential given the significant equity exposure. Diversification across asset classes is limited, reflecting a focused strategy rather than a broad-based asset allocation. Investors should consider whether this aligns with their risk tolerance and investment goals.

Sectors Info

  • Technology
    27%
  • Financials
    16%
  • Health Care
    11%
  • Consumer Discretionary
    10%
  • Industrials
    9%
  • Telecommunications
    9%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    3%
  • Utilities
    3%
  • Real Estate
    2%

Sector-wise, the portfolio is most heavily invested in Technology (27%), Financial Services (16%), and Healthcare (11%). This sectoral distribution is reflective of the broader market trends, with a strong emphasis on technology, which may drive growth but also introduce volatility. The balanced representation across other sectors like Consumer Cyclical, Industrials, and Communication Services suggests an attempt to mitigate risk through diversification. However, the heavy tech weighting may influence the portfolio's sensitivity to sector-specific downturns.

Regions Info

  • North America
    81%
  • Europe Developed
    8%
  • Japan
    3%
  • Asia Emerging
    3%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%

Geographically, the portfolio is predominantly invested in North America (81%), with smaller allocations to Europe Developed (8%) and emerging and developed markets in Asia and Australasia. This geographic distribution indicates a strong home bias towards the US market, which may limit exposure to potential growth in international markets. Diversifying more broadly internationally could help mitigate region-specific risks and tap into global growth opportunities.

Market capitalization Info

  • Mega-cap
    47%
  • Large-cap
    33%
  • Mid-cap
    18%
  • Small-cap
    1%

The portfolio's market capitalization breakdown shows a preference for larger companies, with 47% in mega-cap and 33% in large-cap stocks. This bias towards bigger, more established companies typically offers stability and lower volatility compared to smaller caps. However, the limited exposure to small (1%) and micro (0%) caps suggests potential missed opportunities for higher growth, albeit with increased risk.

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.

Based on the Efficient Frontier analysis, there may be opportunities to optimize the risk-return profile of the portfolio. While the current allocation has performed well historically, adjustments could potentially offer a better balance between risk and return. This optimization would involve evaluating different asset allocations to achieve the most favorable risk-return trade-off without significantly altering the portfolio's fundamental strategy.

Dividends Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.40%
  • Fidelity 500 Index Fund 0.90%
  • Weighted yield (per year) 1.20%

The portfolio offers a total dividend yield of 1.20%, with the international fund contributing a higher yield (2.40%) compared to the domestic fund (0.90%). This yield contributes to the portfolio's total return, providing a steady income stream in addition to potential capital gains. For investors seeking income, the current yield is modest, suggesting a growth-oriented strategy rather than income maximization.

Ongoing product costs Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.03%

The portfolio's costs are impressively low, with a Total Expense Ratio (TER) of 0.03%. This efficiency is beneficial for long-term growth, as lower costs directly translate to higher net returns for investors. The focus on low-cost index funds is a prudent strategy, ensuring that investment returns are not eroded by high fees.

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