A focused portfolio with high exposure to US equities and low diversification

Report created on Sep 25, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards the Fidelity 500 Index Fund, comprising 83.33% of the total, with the remaining portion split equally between the Vanguard Dividend Appreciation Index Fund ETF Shares and the Vanguard Total Stock Market Index Fund ETF Shares. This composition suggests a strong focus on large-cap US equities, given the significant overlap among the holdings of these funds. The portfolio's diversification is low, with a concentration in a single asset class (stocks) and a predominant focus on North American markets.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 15.89%, with a maximum drawdown of -33.67%. These figures indicate robust growth over time but also highlight periods of significant volatility. The days contributing to 90% of the returns total 37, suggesting that a small number of days have driven the majority of performance, a common characteristic in equity markets.

Projection Info

Monte Carlo simulations, based on 1,000 runs, show a wide range of outcomes with a median increase of 618.1%. While encouraging, it's important to remember that these simulations use historical data to forecast future returns, and past performance is not a reliable indicator of future results. The high percentage of simulations with positive returns (998 out of 1,000) underscores potential optimism but must be tempered with caution against market volatility.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is exclusively in stocks, with no exposure to other asset classes like bonds or real estate. This singular focus enhances potential returns but also increases risk, particularly in market downturns. The absence of cash holdings or fixed-income assets means the portfolio may lack the buffer to mitigate short-term market fluctuations.

Sectors Info

  • Technology
    32%
  • Financials
    15%
  • Health Care
    10%
  • Consumer Discretionary
    9%
  • Telecommunications
    9%
  • Industrials
    8%
  • Consumer Staples
    6%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%
  • Basic Materials
    2%
  • Consumer Discretionary
    1%

Sector allocation is heavily weighted towards technology, financial services, and healthcare, which are sectors that can offer growth but also come with higher volatility. The underrepresentation of sectors like real estate and utilities, traditionally considered more stable, further tilts the portfolio towards aggressive growth.

Regions Info

  • North America
    100%

Geographic allocation is entirely focused on North America, with no exposure to international markets. This concentration risks magnifying the impact of region-specific economic downturns or political events. Diversifying geographically could provide a buffer against such risks and potentially tap into growth opportunities in other regions.

Market capitalization Info

  • Mega-cap
    45%
  • Large-cap
    35%
  • Mid-cap
    18%
  • Small-cap
    2%

The portfolio is predominantly invested in mega and large-cap stocks, which typically offer stability and consistent dividends but may have lower growth potential compared to smaller caps. The minimal exposure to small and micro-cap stocks limits the portfolio's ability to benefit from the rapid growth these companies can experience.

Redundant positions Info

  • Vanguard Dividend Appreciation Index Fund ETF Shares
    Vanguard Total Stock Market Index Fund ETF Shares
    Fidelity 500 Index Fund
    High correlation

The high correlation among the portfolio's holdings, particularly the significant overlap between the Fidelity 500 Index Fund and the Vanguard funds, limits diversification benefits. In essence, the portfolio is exposed to similar underlying assets across its funds, which could amplify losses during 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's current structure suggests room for optimization, particularly in reducing overlap and enhancing diversification. Employing the Efficient Frontier concept could help in identifying an allocation that offers the best possible risk-return trade-off. However, this requires a careful review of the existing assets and possibly introducing new asset classes or sectors to achieve a more balanced risk profile.

Dividends Info

  • Fidelity 500 Index Fund 1.10%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Weighted yield (per year) 1.14%

The overall dividend yield of the portfolio stands at 1.14%, which can provide a steady income stream. However, the focus on dividend-yielding equities should not overshadow the importance of total return, which combines income with capital appreciation. Balancing between growth and income-generating assets is key to optimizing long-term returns.

Ongoing product costs Info

  • Fidelity 500 Index Fund 0.02%
  • Vanguard Dividend Appreciation Index Fund ETF Shares 0.06%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Weighted costs total (per year) 0.02%

The portfolio benefits from exceptionally low costs, with a Total Expense Ratio (TER) of 0.02%. These low costs are advantageous for long-term growth, as they minimize the drag on returns. Keeping costs low is a foundational principle of successful investing, and this portfolio aligns well with that strategy.

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