Momentum and small value equity portfolio with strong mid cap focus and higher return potential
Report created on Jul 2, 2026Risk profile
5/7
Diversification profile
3/5
Positions
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XM Invesco S&P MidCap Momentum ETF
XMMO - US46137V4648 45.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 25.00% -
AV Avantis® International Small Cap Value ETF
AVDV - US0250728021 15.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 15.00%
This portfolio is a concentrated, all‑equity mix built entirely from four factor ETFs. Almost half is in a mid‑cap momentum fund, a quarter in a large‑cap momentum fund, with the remaining 30% split evenly between US and international small‑cap value funds. That structure leans heavily into specific stock characteristics rather than broad market index exposure. This matters because factor‑driven portfolios can behave quite differently from headline indices, especially over shorter stretches. Here, most of the “engine” is in US mid‑ and large‑cap momentum, with the small‑cap value funds adding diversification and different sources of potential return. The design is intentionally focused and growth‑oriented, not a classic “total market” blend.
Growth
From late 2019 to mid‑2026, a $1,000 investment grew to about $3,171, implying a compound annual growth rate (CAGR) of 18.67%. CAGR is like average speed on a road trip: it smooths out all the bumps into a single yearly pace. Over this period, the portfolio beat both the US market (16.30% CAGR) and global market (13.64% CAGR), which is a strong outcome. The flip side is a maximum drawdown of –37.10% during early 2020, slightly deeper than the benchmarks’ drops. That shows the portfolio has historically rewarded risk with higher returns, but with sharper downside swings when markets fall.
Projection
The forward projection uses a Monte Carlo simulation, which takes past return and volatility patterns and shakes them up thousands of times to create many possible futures. It’s like rolling loaded dice that are weighted by history, not by fantasy. Across 1,000 simulations over 15 years, the median outcome turns $1,000 into about $2,822, with a wide “likely” range from roughly $1,898 to $4,209. There are also more extreme paths, from near break‑even to strong multi‑bagger results. The average simulated annual return is 8.30%, but these are just modelled scenarios, not promises. Real‑world markets can deliver very different paths than the past.
Asset classes
- Stocks 100%
All of the portfolio sits in stocks, with no bonds, cash, or alternative assets included. That’s why the risk score is on the higher side and the diversification score lands at “moderately diversified” rather than broad‑based. Equities alone can drive strong long‑term growth, but they also tend to move together when markets panic, so drawdowns can be significant. Compared with a mixed stock‑and‑bond benchmark, this portfolio will usually show bigger swings in both directions. The all‑equity structure keeps things simple and focused, but it also means there is no built‑in cushion from less volatile asset classes when equity markets stumble or interest rates shift.
Sectors
- Industrials 27%
- Technology 24%
- Financials 9%
- Energy 8%
- Consumer Discretionary 8%
- Basic Materials 7%
- Health Care 6%
- Telecommunications 3%
- Real Estate 3%
- Utilities 3%
- Consumer Staples 3%
Sector exposure is quite spread out, with industrials (27%) and technology (24%) leading, followed by smaller slices in financials, energy, consumer areas, materials, health care, and others. This mix looks reasonably balanced and not dominated by a single sector the way some growth portfolios are. The alignment with multiple areas of the economy is helpful for diversification across business cycles: industrials and energy can benefit from economic upswings, while technology often drives innovation growth. However, momentum and small‑cap value tilts can still make sector weights change over time as the underlying indices refresh. Overall, the sector composition matches benchmark‑style diversification fairly well, which is a positive foundation.
Regions
- North America 82%
- Europe Developed 8%
- Japan 5%
- Latin America 2%
- Australasia 1%
- Africa/Middle East 1%
Geographically, the portfolio is heavily tilted toward North America at 82%, with the remainder spread across developed Europe, Japan, Latin America, Australasia, and Africa/Middle East. This is more US‑centric than a typical global equity benchmark, where non‑US markets make up a larger share. A strong home bias can work well when the US outperforms, as it has for much of the last decade. But it also means portfolio fortunes are closely tied to one region’s economy, policy, and currency. The international small‑cap value sleeve adds a useful dose of overseas diversification, particularly into smaller companies that aren’t always well represented in headline global indices.
Market capitalization
- Mid-cap 34%
- Small-cap 31%
- Large-cap 15%
- Mega-cap 11%
- Micro-cap 8%
By market cap, the portfolio leans heavily into mid‑caps (34%) and small‑caps (31%), with only modest exposure to mega‑caps (11%) and large‑caps (15%), plus an 8% slice in micro‑caps. This is quite different from mainstream indices, where mega‑ and large‑caps usually dominate. Smaller companies often have more room to grow but can be more volatile, with wider swings and sometimes less liquidity. The mid‑cap focus, especially combined with momentum, tends to sit between the stability of giants and the punchiness of tiny stocks. This structure can amplify both upside and downside moves compared with a pure large‑cap portfolio, aligning with the higher‑risk, higher‑potential‑return character seen in other metrics.
True holdings
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MU Micron Technology Inc 2.75%
Part of fund(s):- Invesco S&P 500® Momentum ETF
-
NV NVIDIA Corporation 2.05%
Part of fund(s):- Invesco S&P 500® Momentum ETF
-
FL Flex Ltd 1.82%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
-
CW Curtiss-Wright Corporation 1.77%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
-
AV Broadcom Inc 1.63%
Part of fund(s):- Invesco S&P 500® Momentum ETF
-
ST Sterling Construction Company Inc 1.51%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
-
AT Allegheny Technologies Incorporated 1.45%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
-
FT TechnipFMC PLC 1.44%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
-
TT TTM Technologies Inc 1.33%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
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WW Woodward Inc 1.19%
Part of fund(s):- Invesco S&P MidCap Momentum ETF
- Top 10 total 16.93%
Looking through ETF top holdings, there is notable exposure to a handful of individual names like Micron, NVIDIA, Flex, and Broadcom, each around 1–3% of the overall portfolio. Many of these are technology or industrial companies, showing how those sectors anchor the underlying positions. Some stocks may appear in more than one ETF, creating hidden overlap that pushes their effective weight higher than any single fund suggests. Since only top‑10 positions are included, actual overlap is likely understated, especially for broad ETFs. This means concentration in certain companies and themes could be stronger under the surface than the four‑fund list alone implies, even though the portfolio still holds hundreds of total securities.
Factors
Factor exposure is where this portfolio really stands out. It shows high tilts to value (66%), size (76%), and momentum (68%), with more neutral exposure to quality and low volatility, and a lower tilt to yield. Factors are like investing “ingredients” — characteristics that help explain why some stocks behave differently from others over time. A strong size tilt means more exposure to smaller companies, while value focuses on cheaper‑priced stocks, and momentum emphasizes recent winners. This combination can behave very differently from a market‑cap index: it may shine when value, smaller caps, or momentum leadership is strong, but lag when large, expensive growth names dominate. The low yield tilt also lines up with a growth‑oriented style.
Risk contribution
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Invesco S&P MidCap Momentum ETF
Weight: 45.00% 48.9% -
Invesco S&P 500® Momentum ETF
Weight: 25.00% 23.3% -
Avantis® U.S. Small Cap Value ETF
Weight: 15.00% 16.7% -
Avantis® International Small Cap Value ETF
Weight: 15.00% 11.1%
Risk contribution shows how much each holding drives the portfolio’s ups and downs, which can differ from simple weights. The mid‑cap momentum ETF is 45% of the portfolio but contributes almost 49% of overall risk, making it the main volatility driver. The US small‑cap value fund also contributes slightly more risk than its 15% weight, while the large‑cap momentum and international small‑cap value funds add proportionally less. Together, the top three funds account for nearly 89% of portfolio risk. This pattern is normal for a focused, all‑equity portfolio, but it does mean changes in mid‑cap and small‑cap segments will strongly influence overall behavior, more than the simple percentages might suggest at first glance.
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 risk‑vs‑return chart shows the current portfolio has a Sharpe ratio of 0.72, below both the optimal portfolio at 1.0 and the minimum‑variance mix at 0.89. The Sharpe ratio compares excess return to volatility, like judging how much “reward” you get per unit of bumpiness. Being about 3.13 percentage points below the efficient frontier at the same risk level suggests that, using just these four holdings, a different weight mix could historically have delivered better risk‑adjusted returns. Importantly, this is an exercise in reweighting existing pieces, not adding new ones. Even so, the current portfolio still sits in a high‑return, higher‑risk zone, consistent with its growth‑oriented character.
Dividends
- Avantis® International Small Cap Value ETF 2.80%
- Avantis® U.S. Small Cap Value ETF 1.30%
- Invesco S&P 500® Momentum ETF 0.70%
- Invesco S&P MidCap Momentum ETF 0.60%
- Weighted yield (per year) 1.06%
The portfolio’s overall dividend yield is about 1.06%, on the low side relative to broad equity indices. Individual funds vary: the international small‑cap value ETF yields around 2.80%, while both momentum funds are below 1%. Dividends can be a steady source of return, especially for investors who like regular cash flow, but here they play a minor role. Most of the historical and expected return has come, and likely will come, from price movements — especially factor‑driven gains in value, size, and momentum — rather than from income. This low yield is consistent with a growth‑tilted, factor‑focused equity strategy rather than an income‑oriented approach.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Invesco S&P 500® Momentum ETF 0.13%
- Invesco S&P MidCap Momentum ETF 0.34%
- Weighted costs total (per year) 0.28%
The portfolio’s weighted ongoing fee (TER) is about 0.28%, with individual fund costs ranging from 0.13% to 0.36%. TER, or Total Expense Ratio, is the annual fee charged by a fund, and it quietly chips away at returns over time. In the context of factor and smart‑beta ETFs, this overall cost level is quite reasonable and compares well with many actively managed funds. Lower fees leave more of any future returns in the portfolio, and over long periods small differences can compound into meaningful dollar amounts. Here, costs are a clear strength: they’re low enough that they don’t dominate performance, allowing factor exposures and market movements to be the main drivers.
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