A balanced and highly diversified portfolio with a strong focus on future growth and retirement planning

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

Balanced Investors

This portfolio suits an investor seeking balanced growth with a moderate risk tolerance and a long-term investment horizon. It's particularly well-suited for individuals planning for retirement, prioritizing steady returns while maintaining significant exposure to equities for growth. The investor likely appreciates the blend of domestic and international exposure and understands the importance of staying invested across market cycles to achieve financial goals.

Positions

  • FIDELITY FREEDOM 2040 FUND FIDELITY FREEDOM 2040 FUND
    FFFFX - US3157921012
    32.99%
  • FIDELITY FREEDOM INDEX 2050 FUND INVESTOR CLASS
    FIPFX - US3157938693
    25.77%
  • Vanguard S&P 500 ETF
    VOO - US9229083632
    20.62%
  • Vanguard Total International Stock Index Fund ETF Shares
    VXUS - US9219097683
    10.31%
  • Invesco NASDAQ 100 ETF
    QQQM - US46138G6492
    5.15%
  • Invesco S&P 500® Momentum ETF
    SPMO - US46138E3392
    5.15%

The portfolio is primarily structured around two target-date funds from Fidelity, complemented by a mix of ETFs that focus on the S&P 500, international stocks, the NASDAQ 100, and momentum stocks. This composition suggests a strategic blend aimed at long-term growth, with a significant portion allocated to retirement funds maturing in 2040 and 2050. The inclusion of broad market and international ETFs enhances diversification, while the specific focus on technology and financial services sectors indicates a tilt towards growth-oriented investments.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 14.84%, the portfolio has demonstrated strong historical performance. The maximum drawdown of -23.63% indicates the portfolio's resilience during market downturns. The days contributing to 90% of returns highlight the portfolio's ability to capitalize on significant market movements. This performance, combined with a balanced risk score, suggests that the portfolio is well-positioned to offer growth while managing volatility.

Projection Info

Monte Carlo simulations project a wide range of future outcomes, emphasizing the inherent uncertainty in investing. The 50th percentile outcome of a 648.5% return is particularly promising, indicating potential for substantial growth. However, it's important to remember that these projections are based on historical data and cannot guarantee future results. They serve as a useful tool for understanding possible scenarios and preparing for varying market conditions.

Asset classes Info

  • Stocks
    90%
  • Bonds
    8%
  • Cash
    1%
  • Other
    0%
  • Not Classified
    0%
  • No data
    0%

The portfolio's asset allocation leans heavily towards stocks (90%), with a minor allocation to bonds (8%) and cash (1%). This allocation is appropriate for a growth-oriented investor with a long-term horizon, as stocks historically offer higher returns than bonds or cash. The minimal allocation to bonds and cash provides some buffer against market volatility, but the primary focus remains on capital appreciation through equities.

Sectors Info

  • Technology
    27%
  • Financials
    18%
  • Industrials
    12%
  • Telecommunications
    9%
  • Health Care
    8%
  • Consumer Discretionary
    6%
  • Consumer Staples
    5%
  • Consumer Discretionary
    4%
  • Basic Materials
    4%
  • Energy
    3%
  • Utilities
    2%
  • Real Estate
    2%

The sector allocation reveals a strong emphasis on technology and financial services, followed by industrials and communication services. This sectoral spread supports the portfolio's growth objectives, given the high growth potential in technology and financial sectors. However, heavy concentration in specific sectors could expose the portfolio to sector-specific risks. Diversifying across a broader range of sectors could help mitigate this risk.

Regions Info

  • North America
    68%
  • Europe Developed
    15%
  • Asia Emerging
    6%
  • Japan
    4%
  • Asia Developed
    4%
  • Africa/Middle East
    1%
  • Australasia
    1%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographic allocation shows a dominant focus on North America (68%), with meaningful exposure to developed Europe (15%) and emerging Asian markets (6%). This geographic distribution supports diversification across different economic environments and growth potentials. However, the relatively lower exposure to emerging markets and other global regions might limit the portfolio's potential to capitalize on global growth trends.

Market capitalization Info

  • Mega-cap
    42%
  • Large-cap
    29%
  • Mid-cap
    14%
  • Small-cap
    3%
  • Micro-cap
    1%

The portfolio's emphasis on mega and large-cap stocks (71% combined) aligns with its goal of achieving steady growth while managing volatility. These companies are typically more stable and less risky than smaller companies. However, incorporating a higher proportion of mid, small, or micro-cap stocks could enhance potential returns, albeit with increased risk.

Redundant positions Info

  • FIDELITY FREEDOM INDEX 2050 FUND INVESTOR CLASS
    Vanguard S&P 500 ETF
    High correlation

The high correlation between the Fidelity Freedom Index 2050 Fund and the Vanguard S&P 500 ETF suggests redundancy, as these investments often move in tandem, limiting diversification benefits. Identifying and reducing overlap can enhance portfolio efficiency by ensuring each investment contributes uniquely to the portfolio's risk and return profile.

Dividends Info

  • FIDELITY FREEDOM 2040 FUND FIDELITY FREEDOM 2040 FUND 7.30%
  • FIDELITY FREEDOM INDEX 2050 FUND INVESTOR CLASS 1.80%
  • Invesco NASDAQ 100 ETF 0.50%
  • Invesco S&P 500® Momentum ETF 0.70%
  • Vanguard S&P 500 ETF 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.80%
  • Weighted yield (per year) 3.45%

The overall dividend yield of 3.45% contributes to the portfolio's total return, providing a steady income stream in addition to capital appreciation. While the focus is clearly on growth, dividends offer a cushion during market downturns and contribute to compounding returns over time.

Ongoing product costs Info

  • FIDELITY FREEDOM 2040 FUND FIDELITY FREEDOM 2040 FUND 0.66%
  • FIDELITY FREEDOM INDEX 2050 FUND INVESTOR CLASS 0.12%
  • Invesco NASDAQ 100 ETF 0.15%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.27%

The total expense ratio (TER) of 0.27% is relatively low, reflecting efficient cost management. Lower costs translate directly into higher net returns for investors, making this portfolio cost-effective over the long term. Continuously monitoring and minimizing investment costs remains crucial for maximizing returns.

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.

The portfolio could benefit from an optimization process focusing on reducing highly correlated assets, which currently do not add significant diversification value. By reallocating these assets into less correlated, potentially higher-return investments, the portfolio could achieve a more efficient risk-return profile, moving closer to the Efficient Frontier.

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