A balanced global portfolio with strong tech exposure and low cost structure

Report created on Jan 24, 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 is composed of three main assets: Fidelity International Index Fund (60%), Invesco NASDAQ 100 ETF (25%), and Fidelity 500 Index Fund (15%). This composition leans heavily on international and tech-focused investments. Compared to a typical balanced benchmark, the portfolio has a higher international exposure, which may enhance diversification but could also introduce more volatility. Maintaining a broad mix of funds is beneficial, but it's important to ensure alignment with personal risk tolerance and investment goals. Consider periodically reviewing the composition to ensure it continues to meet your objectives, especially as market conditions change.

Growth Info

Historically, the portfolio has performed well, boasting a Compound Annual Growth Rate (CAGR) of 11.88%. This strong performance is noteworthy, especially when compared to common benchmarks. However, the portfolio experienced a maximum drawdown of -29.19%, indicating significant volatility during downturns. While past performance is not indicative of future results, it provides a useful context for understanding potential risks and rewards. It's crucial to maintain a long-term perspective, as short-term market fluctuations can impact performance but may not necessarily reflect the portfolio's overall potential.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests an optimistic outlook with an annualized return of 14.92% across 1,000 simulations. The 50th percentile outcome indicates a potential portfolio growth of 490.8%. However, it's important to note that simulations rely on historical data and assumptions, which may not fully capture future market conditions. While the projections are promising, they should be interpreted as one of many possible scenarios. Regularly reassessing the portfolio's alignment with your financial goals and risk tolerance is essential, especially in the face of changing market dynamics.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, which can offer substantial growth potential but also increases exposure to market volatility. While a 100% stock allocation can be suitable for those with a higher risk tolerance, it's important to consider the benefits of including other asset classes, such as bonds or real estate, which can provide stability and diversification. By diversifying across asset classes, you can potentially reduce risk and enhance long-term returns. Consider evaluating your risk tolerance and investment horizon to determine if a more diversified asset allocation might better suit your needs.

Sectors Info

  • Technology
    24%
  • Financials
    15%
  • Industrials
    13%
  • Health Care
    11%
  • Telecommunications
    8%
  • Consumer Discretionary
    8%
  • Consumer Staples
    7%
  • Basic Materials
    4%
  • Consumer Discretionary
    4%
  • Energy
    3%
  • Utilities
    3%
  • Real Estate
    2%

The portfolio's sector allocation is tech-heavy, with technology representing 24% of the total. This concentration aligns with recent market trends favoring tech growth but may expose the portfolio to higher volatility, especially during periods of interest rate hikes. Other sectors, such as financial services and industrials, provide some balance. However, it's important to regularly assess sector exposure to ensure it aligns with your risk tolerance and market outlook. Diversifying across a broader range of sectors can mitigate risks associated with sector-specific downturns and enhance overall portfolio stability.

Regions Info

  • North America
    40%
  • Europe Developed
    39%
  • Japan
    14%
  • Australasia
    5%
  • Asia Developed
    2%

Geographically, the portfolio is well-diversified, with significant exposure to North America (40%) and Europe Developed (39%). While this allocation aligns closely with global benchmarks, the absence of emerging market exposure may limit potential growth opportunities. Including emerging markets could enhance diversification and offer higher growth potential, albeit with increased risk. Regularly reviewing geographic allocations ensures they remain aligned with your investment goals and risk tolerance, particularly as global economic conditions evolve. Consider whether a more balanced geographic distribution might better support your long-term objectives.

Market capitalization Info

  • Mega-cap
    51%
  • Large-cap
    37%
  • Mid-cap
    11%

The portfolio's market capitalization is heavily weighted towards mega-cap stocks (51%) and big-cap stocks (37%), with minimal exposure to medium and small-cap stocks. This concentration in larger companies can provide stability and lower volatility but may limit growth opportunities typically found in smaller companies. Diversifying across market capitalizations can enhance potential returns and reduce risk. Consider evaluating whether a more balanced mix of large, medium, and small-cap stocks aligns better with your risk tolerance and growth objectives, potentially increasing the portfolio's overall resilience.

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.

The portfolio could potentially be optimized using the Efficient Frontier, which focuses on achieving the best possible risk-return ratio based on current assets. This approach does not necessarily prioritize diversification but aims to maximize returns for a given level of risk. By adjusting the allocation of existing assets, you may enhance overall efficiency. Regularly reassessing the portfolio's position on the Efficient Frontier can help ensure it remains aligned with your risk tolerance and investment objectives. Consider exploring optimization strategies to refine the portfolio's risk-return profile and support long-term growth.

Dividends Info

  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.40%
  • Fidelity 500 Index Fund 1.20%
  • Invesco NASDAQ 100 ETF 0.60%
  • Weighted yield (per year) 0.57%

The portfolio's dividend yield stands at 0.57%, with the Fidelity 500 Index Fund contributing the highest yield at 1.20%. While the dividend yield is modest, it can provide a steady income stream, which is beneficial for reinvestment or income generation. Dividends can enhance total returns, particularly in a low-interest-rate environment. However, focusing solely on dividends might not align with all investment goals. It's important to consider both dividend income and capital appreciation potential when evaluating the portfolio's overall performance. Regularly reviewing dividend contributions ensures alignment with your income needs and growth objectives.

Ongoing product costs Info

  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.04%
  • Fidelity 500 Index Fund 0.02%
  • Invesco NASDAQ 100 ETF 0.15%
  • Weighted costs total (per year) 0.06%

The portfolio's total expense ratio (TER) is impressively low at 0.06%, with the Fidelity funds offering particularly competitive costs. Low fees are advantageous as they enhance long-term returns by reducing the drag on performance. It's important to remain vigilant about costs, as even small differences in expense ratios can significantly impact returns over time. Consider regularly reviewing the cost structure of your investments to ensure they remain competitive and align with your financial goals. Maintaining a focus on cost efficiency is a key strategy for optimizing portfolio performance.

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