A growth-focused portfolio with heavy tech exposure and low costs

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor seeking high growth with a corresponding willingness to accept higher levels of risk. It's tailored for those with a long-term investment horizon who can withstand significant market fluctuations. The investor should be comfortable with the portfolio's heavy exposure to the technology sector and the associated volatility. This setup is ideal for those prioritizing capital appreciation over income and who have a sufficient time frame to recover from any potential downturns.

Positions

  • Fidelity 500 Index Fund
    FXAIX - US3159117502
    70.00%
  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS
    FTIHX - US31635V6386
    15.00%
  • NVIDIA Corporation
    NVDA - US67066G1040
    15.00%

This portfolio primarily consists of two Fidelity index funds and a significant stake in NVIDIA Corporation, making it heavily weighted towards the stock market. The Fidelity 500 Index Fund, mimicking the performance of the S&P 500, constitutes the bulk of the portfolio. The inclusion of the Fidelity Total International Index Fund introduces geographical diversification, albeit modestly. NVIDIA, a tech giant, represents a substantial single-stock risk but also offers high growth potential. This composition indicates a clear growth orientation with a strong tilt towards technology.

Growth Info

The portfolio's historical performance, with a Compound Annual Growth Rate (CAGR) of 22.69%, is impressive. However, the maximum drawdown of -52.55% signals significant volatility and potential risk, especially in market downturns. The days contributing to 90% of returns being so few highlights the portfolio's performance is heavily reliant on short bursts of significant gains, a characteristic common in growth-focused investments.

Projection Info

Using Monte Carlo simulations, which forecast future performance by analyzing historical data, the portfolio shows a wide range of outcomes. The median projection suggests a substantial growth potential, but the wide spread between the 5th and 67th percentiles underscores the high risk associated with this portfolio. It's essential to understand that these projections are speculative and depend heavily on past market behaviors, which may not predict future trends accurately.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Other
    0%
  • Not Classified
    0%

The portfolio is entirely invested in stocks, with no allocation to bonds, cash, or alternative investments. This singular focus on equities enhances growth potential but also increases volatility and risk. Diversifying across different asset classes could provide a buffer against market fluctuations and reduce the portfolio's overall risk profile.

Sectors Info

  • Technology
    39%
  • Financials
    13%
  • Health Care
    9%
  • Consumer Discretionary
    9%
  • Industrials
    8%
  • Telecommunications
    7%
  • Consumer Staples
    5%
  • Energy
    3%
  • Utilities
    2%
  • Basic Materials
    2%
  • Real Estate
    2%

The sectoral allocation is heavily skewed towards technology, comprising 39% of the portfolio. While tech stocks have historically offered high growth, they also come with increased volatility, especially in response to interest rate changes or economic downturns. The presence of other sectors like financial services, healthcare, and consumer cyclical provides some balance, but the dominance of technology remains a significant risk factor.

Regions Info

  • North America
    86%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Emerging
    2%
  • Asia Developed
    2%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    0%
  • Europe Emerging
    0%

Geographically, the portfolio is heavily weighted towards North America (86%), with minimal exposure to other regions. This concentration in a single market enhances the risk of regional economic downturns impacting the portfolio's performance. Expanding into more diverse international markets could mitigate some of this risk and potentially unlock new growth avenues.

Market capitalization Info

  • Mega-cap
    55%
  • Large-cap
    28%
  • Mid-cap
    15%
  • Small-cap
    1%
  • Micro-cap
    0%

The focus on mega (55%) and big-cap (28%) stocks aligns with the portfolio's growth and risk profile, as these companies typically offer more stability than their smaller counterparts. However, the minimal exposure to small and micro-cap stocks limits opportunities for outsized gains from emerging companies, which could be a missed opportunity for additional growth.

Dividends Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.40%
  • Fidelity 500 Index Fund 0.90%
  • Weighted yield (per year) 0.99%

The portfolio's average dividend yield is relatively low, reflecting its growth-focused strategy. While dividends are a consideration, they are not the primary goal of this portfolio, which is designed to maximize capital appreciation. Investors seeking income in addition to growth might consider a higher allocation to assets with higher dividend yields.

Ongoing product costs Info

  • FIDELITY TOTAL INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.06%
  • Fidelity 500 Index Fund 0.02%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from very low costs, with total expense ratios (TER) for the included funds being exceptionally competitive. This cost efficiency is a significant advantage, as lower costs directly translate to higher net returns over the long term. Maintaining this focus on cost efficiency is advisable, especially in a growth-oriented portfolio where compound growth plays a crucial role.

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.

Considering the Efficient Frontier, the portfolio's current composition suggests it might not be fully optimized for the best risk-return ratio. Adjusting the asset allocation to include a broader range of asset classes and reducing the heavy reliance on the technology sector could improve the portfolio's efficiency, potentially offering better returns for the same level of risk.

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