Balanced portfolio with a strong focus on US equities and low-cost index funds
Report created on Jun 18, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
FX Fidelity 500 Index Fund
FXAIX - US3159117502 70.00% -
FS FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
FSPSX - US3159117270 20.00% -
FS FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS
FSSNX - US3161461823 10.00%
The portfolio is heavily weighted towards large-cap US equities, comprising 70% of the allocation through the Fidelity 500 Index Fund. The international and small-cap exposures, represented by the Fidelity International Index Fund and Fidelity Small Cap Index Fund, make up 20% and 10% respectively. This composition suggests a strategy that leans heavily on the performance of large US companies, with moderate diversification through international and small-cap stocks.
Growth
Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 11.98%, with a significant drawdown of -34.22%, indicating periods of high volatility. The days contributing to 90% of the returns amount to 25, suggesting that a few key days have driven the majority of gains. This performance, while strong, highlights the portfolio's sensitivity to market swings and the importance of staying invested during volatile periods.
Projection
Using Monte Carlo simulations, the forward-looking projection offers a broad range of outcomes, with the median scenario suggesting a 230.2% increase. However, the 5th percentile shows a potential loss, underscoring the risk involved. It's crucial to understand that these projections, based on historical data, cannot guarantee future results but offer a glimpse into potential volatility and growth.
Asset classes
- Stocks 100%
The portfolio is entirely allocated to stocks, providing no cushion against market downturns through bonds or other asset classes. This allocation is conducive to higher growth over the long term but comes with increased volatility. Diversifying across different asset classes could provide a smoother investment journey, especially during stock market corrections.
Sectors
- Technology 25%
- Financials 16%
- Health Care 12%
- Industrials 10%
- Consumer Discretionary 10%
- Telecommunications 8%
- Consumer Staples 6%
- Energy 4%
- Utilities 3%
- Real Estate 3%
- Basic Materials 3%
With a quarter of the portfolio in technology and significant allocations in financial services and healthcare, the sector exposure is concentrated in areas with high growth potential but also higher volatility. This concentration in cyclical sectors could lead to pronounced swings in portfolio value in response to market changes.
Regions
- North America 80%
- Europe Developed 13%
- Japan 4%
- Australasia 1%
- Asia Developed 1%
The geographic allocation is heavily skewed towards North America, with 80% of assets. This home bias enhances exposure to US market performance but limits potential gains from international markets. Given the modest allocation to developed markets outside the US and negligible exposure to emerging markets, there's room to enhance global diversification.
Market capitalization
- Mega-cap 43%
- Large-cap 31%
- Mid-cap 15%
- Small-cap 6%
- Micro-cap 4%
The focus on mega and big-cap stocks, which comprise 74% of the portfolio, aligns with a strategy favoring stability and lower volatility associated with large, established companies. However, this could limit potential high-growth opportunities from smaller companies, especially in rapidly evolving sectors.
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 current portfolio's alignment with the Efficient Frontier could be enhanced by adjusting asset allocations to achieve a better risk-return ratio. While the portfolio shows strong past performance and low costs, diversifying across more asset classes and considering lower-correlated investments could optimize its position on the Efficient Frontier, improving potential outcomes.
Dividends
- FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.50%
- FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 1.10%
- Fidelity 500 Index Fund 1.20%
- Weighted yield (per year) 1.45%
The overall dividend yield of 1.45% contributes to the portfolio's total return, providing a steady income stream. While not the primary focus, this yield supports portfolio performance, especially in volatile or bear markets, by offering a partial buffer against price declines.
Ongoing product costs
- FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.04%
- FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.02%
- Fidelity 500 Index Fund 0.02%
- Weighted costs total (per year) 0.02%
The exceptionally low total expense ratio (TER) of 0.02% is a significant advantage, ensuring that investment costs do not erode returns. This cost efficiency is crucial for long-term growth, as even small differences in fees can lead to substantial disparities in portfolio value over decades.
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