Balanced yet concentrated portfolio with high exposure to US stocks and low diversification

Report created on Aug 5, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

The portfolio is heavily weighted towards large-cap US equities, with a significant 54.16% allocation to the Fidelity 500 Index Fund. This is complemented by mid-cap exposure through both Fidelity and Vanguard mid-cap funds, each constituting 13.54% of the portfolio. The inclusion of specialized ETFs like the Invesco Dynamic Semiconductors and the Unusual Whales Subversive Democratic Trading ETF adds a thematic element, albeit with a smaller allocation. The singular direct stock holding in DTE Energy Company represents a minimal part of the portfolio. This composition indicates a focus on US equities with limited sectoral and thematic diversification.

Growth Info

Historically, the portfolio has demonstrated strong performance with a Compound Annual Growth Rate (CAGR) of 17.79%. The maximum drawdown experienced was -19.06%, indicating resilience in volatile markets. Notably, a small number of days contributed significantly to the portfolio's returns, highlighting its susceptibility to short-term market movements. This performance, while impressive, should be contextualized with the understanding that past results do not guarantee future outcomes.

Projection Info

Utilizing Monte Carlo simulations, the forward projection suggests a wide range of potential outcomes, with a median increase of 830.2% in portfolio value. While the simulations show a high likelihood of positive returns, it's important to remember that these projections are based on historical data and cannot account for unforeseen market changes. This method helps in understanding potential volatility and return scenarios but is not a foolproof prediction tool.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely composed of stocks, lacking exposure to other asset classes like bonds, real estate, or commodities. This singular focus enhances potential returns but also increases volatility and risk, particularly in market downturns. Diversifying across different asset classes can provide a buffer against stock market volatility, contributing to a more stable portfolio performance over time.

Sectors Info

  • Technology
    30%
  • Financials
    13%
  • Industrials
    10%
  • Health Care
    9%
  • Telecommunications
    8%
  • Consumer Discretionary
    7%
  • Consumer Staples
    5%
  • Utilities
    4%
  • Real Estate
    4%
  • Energy
    4%
  • Consumer Discretionary
    3%
  • Basic Materials
    2%

Sector allocation is concentrated in technology, financial services, and industrials, which are sectors known for their growth potential but also for higher volatility. The heavy emphasis on technology, in particular, may lead to increased sensitivity to market corrections within this sector. Diversifying more evenly across sectors can help mitigate sector-specific risks and capitalize on growth opportunities in other areas of the economy.

Regions Info

  • North America
    99%

The portfolio's geographic allocation is almost exclusively focused on North America, with negligible exposure to international markets. This concentration in a single region can limit opportunities for global diversification and increase susceptibility to region-specific economic downturns. Expanding into developed and emerging markets outside of North America could provide additional growth avenues and reduce geographic risk.

Market capitalization Info

  • Mid-cap
    35%
  • Mega-cap
    32%
  • Large-cap
    27%
  • Small-cap
    5%
  • Micro-cap
    1%

The mix of mega, big, and medium-cap stocks with minimal exposure to small and micro-cap stocks suggests a preference for established companies over potential high-growth small-cap opportunities. This strategy typically offers more stability but may miss out on the significant growth potential of smaller companies. Considering a small allocation to high-quality small or micro-cap stocks could enhance growth prospects without substantially increasing overall portfolio risk.

Redundant positions Info

  • Vanguard Mid-Cap Index Fund ETF Shares
    FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS
    High correlation
  • Unusual Whales Subversive Democratic Trading ETF
    Fidelity 500 Index Fund
    Vanguard Total Stock Market Index Fund ETF Shares
    High correlation

The portfolio exhibits high correlation between certain assets, particularly between the mid-cap funds and between the thematic ETFs and the large-cap index funds. This redundancy reduces the benefits of diversification, as these assets are likely to respond similarly to market conditions. Streamlining the portfolio by reducing overlapping holdings could improve diversification and risk management.

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 analysis suggests that the portfolio could achieve a more efficient risk-return profile by addressing the high correlation among assets and introducing broader diversification. An optimized portfolio with a similar risk level could potentially offer a higher expected return of 20.14%. This optimization underscores the importance of diversification and the need to periodically review and adjust the portfolio to align with these principles.

Dividends Info

  • DTE Energy Company 3.00%
  • FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 1.10%
  • Fidelity 500 Index Fund 0.90%
  • Unusual Whales Subversive Democratic Trading ETF 0.20%
  • Invesco Dynamic Semiconductors ETF 0.10%
  • Vanguard Mid-Cap Index Fund ETF Shares 1.50%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.02%

The portfolio's overall dividend yield stands at 1.02%, contributed by both the index funds and the direct stock holding. While dividends provide a steady income stream and can contribute to total return, the relatively low yield suggests the portfolio's focus is more on capital appreciation. Investors seeking income alongside growth may consider increasing exposure to higher-yielding assets.

Ongoing product costs Info

  • FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.02%
  • Fidelity 500 Index Fund 0.02%
  • Unusual Whales Subversive Democratic Trading ETF 0.76%
  • Invesco Dynamic Semiconductors ETF 0.57%
  • Vanguard Mid-Cap Index Fund ETF Shares 0.04%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.05%

With an overall Total Expense Ratio (TER) of 0.05%, the portfolio benefits from low costs, which is commendable. Lower costs directly translate to higher net returns for investors over time. The choice of low-cost index funds and ETFs is a strategic approach to maximizing returns without incurring excessive fees.

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