Growth-oriented portfolio with a strong focus on stocks and geographic diversity
Report created on Sep 4, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
FX Fidelity 500 Index Fund
FXAIX - US3159117502 70.00% -
FZ FIDELITY ZERO INTERNATIONAL INDEX FUND
FZILX - US31635T6091 30.00%
The portfolio is heavily weighted towards stocks, with a 70% allocation in the Fidelity 500 Index Fund and a 30% allocation in the Fidelity Zero International Index Fund. This composition underscores a clear growth orientation, leveraging the broad market exposure of the S&P 500 alongside international diversification. The focus on just two funds simplifies management but places significant reliance on the performance of these indices. This streamlined approach is both a strength, in terms of efficiency and cost, and a limitation, as it restricts exposure to alternative asset classes which could offer additional diversification benefits or risk mitigation.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 13.27%, with a maximum drawdown of -33.59%. The drawdown indicates the portfolio's vulnerability during market downturns, a common characteristic for growth-focused investments. The performance is significantly influenced by the days constituting 90% of returns, highlighting the impact of short-term market movements. Comparing this performance to relevant benchmarks would provide additional context, especially considering the portfolio's aggressive growth stance.
Projection
Monte Carlo simulations, which use historical data to forecast potential future outcomes, suggest a wide range of possible portfolio values, with a median increase of 321.1%. While these projections offer valuable insights, they inherently carry the limitation of basing future predictions on past performance, which may not always be a reliable indicator. The simulations’ optimistic outlook underscores the portfolio's growth potential but should be balanced with an understanding of underlying assumptions and potential market changes.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's almost exclusive allocation to stocks, with a minor cash holding, reflects a high-risk, high-reward strategy typical of growth-oriented investors. This composition aligns with the portfolio's risk classification and diversification score, indicating a thoughtful approach to growth investment. However, the lack of exposure to other asset classes like bonds or real estate could be a missed opportunity for risk mitigation and portfolio balance.
Sectors
- Technology 27%
- Financials 17%
- Consumer Discretionary 11%
- Industrials 10%
- Health Care 9%
- Telecommunications 9%
- Consumer Staples 6%
- Energy 3%
- Basic Materials 3%
- Utilities 3%
- Real Estate 2%
Sector allocation reveals a significant tilt towards technology, financial services, and consumer cyclical sectors, which are known for their volatility but also for their growth potential. This concentration increases the portfolio's exposure to sector-specific risks but aligns with its growth objectives. Diversification across 11 sectors mitigates some risk, although the heavy emphasis on a few sectors could amplify the impact of sector-specific downturns.
Regions
- North America 72%
- Europe Developed 12%
- Japan 5%
- Asia Emerging 3%
- Asia Developed 3%
- Australasia 1%
- Africa/Middle East 1%
- Latin America 1%
The geographic distribution, with a substantial majority in North America and meaningful exposure to developed and emerging markets internationally, enhances diversification. This global outlook is crucial for capturing growth across different economies, although the portfolio may still be subject to geopolitical risks and currency fluctuations. The balance between U.S. and international exposure is commendable, but investors should remain vigilant about global market dynamics.
Market capitalization
- Mega-cap 48%
- Large-cap 34%
- Mid-cap 16%
- Small-cap 1%
The portfolio's emphasis on mega and big cap stocks is consistent with its growth orientation and risk profile. These companies often offer more stability than their smaller counterparts, though they may also present lower growth potential in some cases. The minimal exposure to small and micro-cap stocks could limit the portfolio's ability to capitalize on the rapid growth these entities sometimes experience, though it aligns with the portfolio's broader risk management 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.
Considering the portfolio's current allocation and asset mix, there's potential for optimization towards the Efficient Frontier, which represents the most advantageous risk-return ratio. Adjustments could involve diversifying into additional asset classes or rebalancing sector and geographic exposures. However, such changes should be carefully weighed against the investor's growth objectives and risk tolerance.
Dividends
- Fidelity 500 Index Fund 1.20%
- FIDELITY ZERO INTERNATIONAL INDEX FUND 2.50%
- Weighted yield (per year) 1.59%
The portfolio's dividend yield, averaging 1.59%, contributes to its total return, providing a steady income stream in addition to potential capital gains. The higher yield from the international fund suggests a strategic benefit from its inclusion, offering a balance between growth and income. Investors should consider the role of dividends in their overall return expectations and risk management strategy.
Ongoing product costs
- Fidelity 500 Index Fund 0.02%
- Weighted costs total (per year) 0.01%
With exceptionally low costs, highlighted by a Total Expense Ratio (TER) of just 0.01%, the portfolio stands out for its cost efficiency. This competitive cost structure enhances net returns over time, a critical factor in long-term investment success. Investors should continue to monitor fees, as even small increases can significantly impact long-term growth.
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