Balanced portfolio with a strong foundation in US and international equities

Report created on Aug 3, 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 structured with a significant emphasis on equities, allocated mainly across large-cap, mid-cap, small-cap, and international stocks. The Fidelity 500 Index Fund, making up 60% of the portfolio, is a cornerstone, providing broad exposure to the largest U.S. companies. The international, mid-cap, and small-cap funds diversify the portfolio across different market segments and geographies, albeit with a strong tilt towards the U.S. market. This composition suggests a strategy aiming for growth while attempting to manage risk through diversification across market capitalizations and regions.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 12.14%, with a maximum drawdown of -34.80%. This performance indicates resilience and the potential for recovery from market downturns, given the relatively high CAGR compared to the drawdown. The days contributing to 90% of returns being few suggests that timing the market would be challenging, reinforcing the importance of a long-term investment strategy. Comparing this performance to relevant benchmarks could provide further insights into its relative strength.

Projection Info

Monte Carlo simulations, based on historical data, indicate a wide range of potential future outcomes for this portfolio, with a median projected growth of 253.2%. While simulations can offer a glimpse into possible future scenarios, it's crucial to remember that they are based on past performance, which is not a reliable indicator of future results. These projections should be viewed as one of many tools in evaluating potential investment strategies, rather than a guarantee of future performance.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's almost exclusive allocation to stocks (99%) with a minimal cash position (1%) reflects a growth-oriented strategy with a moderate to high risk tolerance. This asset class distribution is typical for investors seeking higher returns over the long term, accepting the volatility associated with equity markets. Diversifying across different asset classes, such as bonds or real estate, could provide additional risk management benefits, especially during periods of stock market turbulence.

Sectors Info

  • Technology
    24%
  • Financials
    16%
  • Health Care
    12%
  • Industrials
    11%
  • Consumer Discretionary
    10%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    4%
  • Real Estate
    3%
  • Utilities
    3%
  • Basic Materials
    3%

Sector allocation shows a heavy emphasis on technology, financial services, and healthcare, which are sectors known for their growth potential but also for their volatility. The concentration in these areas can lead to significant gains during bull markets but may increase the portfolio's risk during sector-specific downturns. Diversifying more evenly across sectors could help mitigate this risk, potentially leading to more stable returns over time.

Regions Info

  • North America
    80%
  • Europe Developed
    13%
  • Japan
    4%
  • Australasia
    1%
  • Asia Developed
    1%

Geographically, the portfolio is heavily weighted towards North America (80%), with smaller allocations in developed markets in Europe and Japan. This concentration in developed markets, particularly the U.S., aligns with the portfolio's growth orientation but may limit exposure to emerging market opportunities, which could offer higher growth potential albeit with increased risk. Considering a modest increase in emerging markets exposure could enhance diversification and growth prospects.

Market capitalization Info

  • Mega-cap
    38%
  • Large-cap
    28%
  • Mid-cap
    20%
  • Small-cap
    8%
  • Micro-cap
    5%

The portfolio's market capitalization exposure is well-distributed among mega, big, and medium-sized companies, with a smaller presence in small and micro-caps. This distribution suggests a balanced approach to capturing growth across different company sizes while managing volatility. However, the relatively lower allocation to small and micro-caps might limit potential high-growth opportunities that these segments can offer, albeit with higher risk.

Redundant positions Info

  • Fidelity 500 Index Fund
    FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS
    High correlation

The high correlation between the Fidelity 500 Index Fund and the Fidelity Mid Cap Index Fund indicates overlapping exposures, which could limit the diversification benefits of holding both funds. Diversification aims to spread risk across uncorrelated assets, so reducing overlap could enhance the portfolio's risk management effectiveness. Exploring funds with lower correlation to the existing portfolio components may provide better diversification benefits.

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.

Optimizing the portfolio using the Efficient Frontier concept could potentially enhance the risk-return profile by adjusting asset allocations without necessarily increasing risk. Currently, the portfolio's high correlation among certain assets suggests room for improvement in diversification. By reducing overlap and considering uncorrelated investments, the portfolio could achieve a more efficient allocation, aligning closer to the Efficient Frontier and potentially improving the risk-adjusted return.

Dividends Info

  • FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 1.10%
  • FIDELITY INTERNATIONAL INDEX FUND INSTITUTIONAL PREMIUM CLASS 2.50%
  • FIDELITY SMALL CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.90%
  • Fidelity 500 Index Fund 0.90%
  • Weighted yield (per year) 1.24%

The portfolio's total dividend yield of 1.24% contributes to its total return, complementing capital gains with income. While the yield is modest, it is in line with a growth-focused strategy, where the primary aim is capital appreciation rather than income generation. Investors prioritizing income alongside growth might consider adjusting the allocation towards assets with higher dividend yields.

Ongoing product costs Info

  • FIDELITY MID CAP INDEX FUND INSTITUTIONAL PREMIUM CLASS 0.02%
  • 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%

With an overall Total Expense Ratio (TER) of 0.02%, the portfolio benefits from exceptionally low costs, supporting better net returns over time. Low costs are crucial for long-term investment success, as they compound positively by leaving more capital invested to grow. This portfolio's cost efficiency is a significant strength, particularly in comparison to actively managed funds with higher expense ratios.

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