A balanced portfolio with a strong focus on large-cap equities and moderate diversification

Report created on Jan 5, 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 heavily weighted towards large-cap equities, with 72.05% allocated to the Fidelity Zero Large Cap Index Fund. The remaining investments are spread across dividend-focused ETFs, international equities, and bonds. Comparatively, a typical balanced portfolio might have a more even distribution between stocks and bonds. This concentration in large-cap equities could lead to higher potential returns but also increased risk. Consider diversifying further into other asset classes to reduce risk and enhance stability.

Growth Info

The historical performance of this portfolio has been impressive, with a CAGR of 12.75%. This indicates strong growth over time, outperforming many benchmarks. However, it's important to note the maximum drawdown of -30.72%, which highlights potential volatility. While past performance is a useful indicator, it does not guarantee future results. Monitoring market trends and adjusting the portfolio to mitigate risks during downturns can help maintain performance.

Projection Info

The Monte Carlo simulation projects a range of potential outcomes for this portfolio, with an annualized return of 7.71% across simulations. This method uses historical data to estimate future performance, but it's important to remember that these are hypothetical scenarios. The wide range of outcomes, from a 5th percentile return of -6.58% to a 67th percentile return of 225.8%, underscores the uncertainty of market conditions. Regularly reviewing and adjusting the portfolio based on market changes can help align it with your goals.

Asset classes Info

  • Stocks
    91%
  • Bonds
    9%

The allocation across asset classes is predominantly in stocks, making up over 90% of the portfolio. Bonds represent a small portion at 9.2%, which is lower than typical balanced portfolios that often aim for a 60/40 or 70/30 stock-to-bond ratio. This heavy reliance on equities can lead to higher potential returns but also increases risk, especially during market downturns. Adding more bonds or alternative assets could help balance risk and provide more consistent returns.

Sectors Info

  • Technology
    26%
  • Financials
    13%
  • Health Care
    10%
  • Consumer Discretionary
    8%
  • Industrials
    8%
  • Telecommunications
    8%
  • Consumer Staples
    6%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    2%
  • Real Estate
    2%
  • Consumer Discretionary
    1%

Sector allocation shows a significant concentration in technology at 26.46%, followed by financial services and healthcare. This mirrors common benchmarks but may expose the portfolio to sector-specific risks, such as volatility in tech stocks during economic shifts. A more diversified sectoral approach could mitigate these risks and enhance stability. Consider exploring sectors with lower representation to balance the portfolio and reduce reliance on any single industry.

Regions Info

  • North America
    82%
  • No data
    9%
  • Europe Developed
    4%
  • Japan
    1%
  • Asia Emerging
    1%
  • Asia Developed
    1%

The portfolio is heavily skewed towards North American assets, accounting for 82.06% of geographic exposure. This focus may limit diversification benefits and increase vulnerability to regional economic fluctuations. Expanding exposure to other regions, such as Europe or emerging markets, could enhance diversification and tap into growth opportunities outside North America. Balancing geographic exposure can help mitigate risks associated with regional market downturns.

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 doesn't guarantee diversification but aims to maximize returns for a given level of risk. Regularly reassessing asset allocation and making adjustments can help ensure the portfolio remains efficient and aligned with your risk tolerance and investment goals.

Dividends Info

  • FIDELITY INFLATION-PROTECTED BOND INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.10%
  • FIDELITY U.S. BOND INDEX FUND INSTITUTIONAL PREMIUM CLASS 3.10%
  • Schwab U.S. Dividend Equity ETF 3.60%
  • Weighted yield (per year) 0.59%

The portfolio's dividend yield is relatively modest at 0.59%, with the Schwab U.S. Dividend Equity ETF contributing the highest yield at 3.6%. Dividends can provide a steady income stream and contribute to total returns, which is beneficial for investors seeking income. Evaluating other dividend-paying assets could enhance this aspect of the portfolio, providing more consistent income alongside capital appreciation.

Ongoing product costs Info

  • FIDELITY INFLATION-PROTECTED BOND INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.05%
  • FIDELITY U.S. BOND INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.02%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Weighted costs total (per year) 0.01%

The portfolio's total expense ratio (TER) is impressively low at 0.01%, indicating efficient cost management. Low costs can significantly enhance long-term returns by reducing the drag on performance. This alignment with best practices supports better outcomes over time. Maintaining a focus on cost efficiency, while ensuring the portfolio meets your investment objectives, is a sound strategy for long-term success.

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