A broadly diversified cautious portfolio with a focus on bonds and large-cap equities

Report created on Apr 10, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is composed mainly of stocks (58%) and bonds (31%), with a small allocation to other assets like gold and cash. This mix is well-suited for conservative investors who prioritize stability and steady returns. Compared to typical benchmarks, this portfolio leans more heavily on bonds, reflecting its cautious risk profile. This allocation aligns well with the goal of preserving capital while achieving moderate growth. Consider maintaining this balance to ensure continued alignment with your risk tolerance and investment objectives.

Growth Info

Historically, the portfolio has achieved a CAGR of 5.76%, with a maximum drawdown of -17.84%. This indicates moderate growth with some volatility. Compared to benchmarks, this performance is typical for a cautious portfolio. The drawdown demonstrates the importance of diversification in mitigating losses. To enhance growth potential, consider slightly increasing exposure to growth-oriented assets while maintaining the overall risk level. Keep in mind that past performance does not guarantee future results, and market conditions can change.

Projection Info

Monte Carlo simulations project an annualized return of 7.25% with a wide range of potential outcomes. The 5th percentile shows a potential loss of -30.2%, while the 67th percentile suggests gains up to 193.4%. These simulations use historical data to estimate future performance but are not foolproof predictions. The wide range highlights the inherent uncertainty in investing. Consider using these projections to set realistic expectations and adjust your portfolio to balance risk and return according to your goals.

Asset classes Info

  • Stocks
    58%
  • Bonds
    31%
  • Other
    6%
  • Cash
    1%

The portfolio is diversified across three main asset classes: stocks, bonds, and other assets like gold. This allocation provides a good balance between growth and income, with bonds offering stability and stocks providing growth potential. Compared to common benchmarks, the bond allocation is relatively high, which aligns with a cautious risk profile. Consider maintaining this balance to ensure continued diversification and risk management. Adjustments can be made to align more closely with changing market conditions or personal goals.

Sectors Info

  • Financials
    18%
  • Technology
    10%
  • Industrials
    6%
  • Health Care
    5%
  • Utilities
    4%
  • Consumer Discretionary
    3%
  • Telecommunications
    3%
  • Consumer Staples
    2%
  • Energy
    2%
  • Basic Materials
    2%
  • Real Estate
    2%
  • Consumer Discretionary
    2%

Sector allocation is varied, with significant exposure to financial services (18%) and technology (10%). This distribution provides broad market exposure, though it may result in sector-specific risks. For example, tech-heavy portfolios may experience higher volatility during interest rate hikes. Compared to benchmarks, the sector composition is well-balanced, offering diversification benefits. Consider monitoring sector trends and adjusting allocations as needed to mitigate risks and capitalize on growth opportunities.

Regions Info

  • North America
    44%
  • No data
    16%
  • Europe Developed
    7%
  • Japan
    3%
  • Asia Developed
    1%
  • Asia Emerging
    1%
  • Australasia
    1%

Geographically, the portfolio is heavily weighted towards North America (44%), with smaller allocations in Europe and Asia. This concentration may limit exposure to global growth opportunities and increase vulnerability to regional downturns. Compared to global benchmarks, this allocation is typical for U.S.-focused portfolios. Consider increasing exposure to emerging markets or other regions to enhance diversification and capture potential growth. This adjustment could help reduce reliance on any single geographic area.

Market capitalization Info

  • Mega-cap
    25%
  • Mid-cap
    12%
  • Large-cap
    11%
  • Small-cap
    7%
  • No data
    4%
  • Micro-cap
    3%

The portfolio has a strong focus on mega-cap (25%) and medium-cap (12%) stocks, providing stability and growth potential. Smaller allocations to small-cap and micro-cap stocks offer additional diversification. This distribution aligns well with a cautious investment approach, as larger companies typically offer more stability. Compared to benchmarks, the market cap distribution is balanced, supporting risk management. Consider maintaining this allocation while exploring opportunities in undervalued or emerging sectors.

Redundant positions Info

  • FIDELITY ZERO INTERNATIONAL INDEX FUND
    BNY Mellon International Equity ETF
    High correlation
  • FIDELITY LARGE CAP GROWTH INDEX FUND INSTITUTIONAL PREMIUM CLASS
    SPDR S&P 500 ETF Trust
    BNY Mellon US Large Cap Core Equity ETF
    High correlation
  • FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS
    FIDELITY ZERO EXTENDED MARKET INDEX FUND
    High correlation
  • iShares® Gold Trust Micro
    iShares Gold Trust
    High correlation

Several assets in the portfolio are highly correlated, limiting diversification benefits. For example, the Fidelity Zero International Index Fund and BNY Mellon International Equity ETF move together, reducing risk mitigation. High correlation can lead to increased volatility during market downturns. To enhance diversification, consider replacing some correlated assets with alternatives that offer different risk and return profiles. This adjustment can improve the portfolio's resilience to market fluctuations.

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 can be optimized using the Efficient Frontier to achieve a better risk-return ratio. By adjusting asset allocations, the expected return could increase to 16.86% with a risk level of 11.62%. This optimization focuses on maximizing returns for a given level of risk, not necessarily diversification. Consider rebalancing your portfolio to achieve this efficiency while ensuring it aligns with your risk tolerance and investment goals.

Dividends Info

  • BNY Mellon International Equity ETF 1.70%
  • BNY Mellon US Large Cap Core Equity ETF 0.70%
  • Fidelity Mid Cap Value Index Fund 0.90%
  • FIDELITY TELECOM AND UTILITIES FUND FIDELITY TELECOM AND UTILITIES FUND 1.60%
  • Fidelity Mid Cap Growth Index Fund 0.50%
  • FIDELITY LARGE CAP GROWTH INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.40%
  • FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 1.20%
  • UTILITIES PORTFOLIO UTILITIES PORTFOLIO 1.10%
  • FIDELITY U.S. BOND INDEX FUND INSTITUTIONAL PREMIUM CLASS 3.10%
  • FIDELITY ZERO INTERNATIONAL INDEX FUND 3.20%
  • FIDELITY ZERO EXTENDED MARKET INDEX FUND 1.40%
  • SPDR S&P 500 ETF Trust 1.00%
  • Vanguard S&P 500 Value Index Fund ETF Shares 1.80%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 2.60%
  • Weighted yield (per year) 1.62%

The portfolio's dividend yield stands at 1.62%, contributing to total returns. Dividends provide a steady income stream, particularly valuable in volatile markets. This yield is typical for a cautious portfolio, offering income without excessive risk. Compared to benchmarks, the yield is competitive, supporting long-term growth. Consider maintaining this balance while exploring higher-yielding opportunities to enhance income. However, ensure that any changes align with your overall risk tolerance and investment goals.

Ongoing product costs Info

  • BNY Mellon International Equity ETF 0.04%
  • FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.02%
  • iShares Gold Trust 0.25%
  • iShares® Gold Trust Micro 0.09%
  • iShares Silver Trust 0.50%
  • SPDR S&P 500 ETF Trust 0.10%
  • Vanguard S&P 500 Value Index Fund ETF Shares 0.10%
  • Vanguard Short-Term Inflation-Protected Securities Index Fund ETF Shares 0.04%
  • Weighted costs total (per year) 0.04%

The portfolio's total expense ratio (TER) is impressively low at 0.04%, supporting better long-term performance. Low costs enhance returns by reducing the drag on performance, particularly important in a cautious portfolio. Compared to industry averages, this TER is highly competitive. Consider maintaining this cost structure to maximize returns. Regularly review fund expenses to ensure they remain competitive and aligned with your investment strategy.

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