Value oriented diversified portfolio with strong small cap and emerging markets exposure and moderate risk

Report created on Nov 7, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is equity heavy with 92% stocks and the remainder in cash bonds and other strategies. Major holdings are concentrated in Avantis value ETFs across large mid and small caps plus emerging markets and two alternative ETFs making up 10%. This allocation is well balanced and aligns closely with global diversification best practices in having broad regional and size exposure while tilting to value. Because the mix leans heavily into active value strategies the portfolio may behave differently than market cap benchmarks; consider whether the current split matches the intended risk target and liquidity needs and rebalance to maintain target weights.

Growth Info

Historically a hypothetical $100,000 investment would have grown at about an 11.54% CAGR which is the Compound Annual Growth Rate a simple way to see average yearly growth like an odometer for returns. The maximum drawdown was about -16.95% showing periods of meaningful volatility but not extreme collapse. Only 15 trading days created 90% of the return path which highlights the importance of staying invested. Benchmark comparisons suggest outperformance on a compound basis but with higher short term swings. Recommendation: focus on long term horizon reinvest dividends and set rebalancing rules to manage drawdown tolerance rather than chasing recent winners.

Projection Info

The forward view uses Monte Carlo simulation which runs many hypothetical return paths based on historical return patterns and randomness to show possible outcomes like simulating many journeys to the same destination. Results show the median simulation ending value well above the start and a 5th percentile result that is much lower, illustrating range and tail risk. The annualized return across simulations sits near current expectations but remember simulations assume historical behavior and stable correlations; they illustrate possibilities not guarantees. Recommendation: use these projections for scenario planning and set risk limits rather than as precise forecasts.

Asset classes Info

  • Stocks
    92%
  • Cash
    5%
  • Bonds
    3%
  • Other
    1%

The asset class mix is dominated by equities with minimal bond exposure and a small allocation to managed futures and alternatives. Compared with typical balanced benchmarks which often hold material fixed income this portfolio is equity tilted which boosts long term return potential but raises volatility and sequence of return risk. Diversification benefits from including managed futures and a small cash buffer but bonds are too small to provide effective downside ballast. Recommendation: if capital preservation or income is a priority add a meaningful bond sleeve or inflation resistant assets to smooth volatility while keeping long term return objectives.

Sectors Info

  • Financials
    21%
  • Industrials
    15%
  • Consumer Discretionary
    14%
  • Energy
    10%
  • Technology
    8%
  • Basic Materials
    8%
  • Telecommunications
    5%
  • Consumer Staples
    4%
  • Health Care
    3%
  • Real Estate
    1%
  • Utilities
    1%

Sector exposures show overweight in financials industrials and consumer cyclicals with underweight in technology and healthcare relative to many large cap benchmarks. Sector tilts matter because some sectors correlate with economic cycles energy and financials can amplify sensitivity to interest rates and commodity moves while tech may behave differently under rate changes. The current sector mix could benefit from cyclical rallies but may lag during tech-driven markets. Recommendation: confirm sector tilts are intentional for value exposure and consider modest trimming or periodic rebalancing to avoid concentration driven drawdown risk.

Regions Info

  • North America
    52%
  • Asia Emerging
    10%
  • Europe Developed
    9%
  • Asia Developed
    7%
  • Japan
    5%
  • Latin America
    2%
  • Africa/Middle East
    2%
  • Australasia
    2%
  • Europe Emerging
    1%

Geographic exposure is concentrated in North America at roughly half the portfolio with meaningful emerging Asia and modest Europe Japan and other regions represented. This provides a decent global footprint but is still US biased compared with a global market cap benchmark where the US may dominate yet international diversification often reduces home country risk. Under or over exposures can create sensitivity to localized economic cycles and currency moves. Recommendation: decide whether the US tilt is strategic; to improve diversification consider incremental increases to developed international or emerging allocations if the goal is to reduce single market concentration.

Market capitalization Info

  • Mid-cap
    25%
  • Small-cap
    21%
  • Large-cap
    20%
  • Micro-cap
    14%
  • Mega-cap
    13%

Market capitalization breakdown shows a clear small and mid cap tilt with medium small and micro caps combining for a majority and relatively lower mega cap weight. Smaller caps historically offer higher expected returns but also higher volatility and liquidity risk especially in stress periods. This size bias supports the value small cap investment philosophy but increases sensitivity to market stress and company-specific outcomes. Recommendation: ensure position sizing and liquidity rules reflect this profile and consider a modest allocation to larger cap holdings if lower drawdowns and smoother tracking to broad benchmarks are desired.

Redundant positions Info

  • Avantis International Large Cap
    Avantis® International Small Cap Value ETF
    High correlation

There are highly correlated international holdings notably between the Avantis International Large Cap and International Small Cap ETFs meaning they tend to move together reducing diversification benefits. Correlation measures how assets move in relation to each other where 1 means perfect movement together and -1 means opposite; think of it like synchronized versus independent swimmers. High correlation can leave the portfolio exposed when a region or factor turns against the strategy. Recommendation: remove or replace overlapping exposures with assets that provide lower correlation such as different factor exposures or geographically distinct strategies to enhance true diversification.

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 Efficient Frontier is a concept showing the set of portfolios that offer the highest expected return for a given level of risk think of it as the best tradeoffs available from existing assets. Optimization here indicates an improved expected return of around 11.17% at the same risk level after removing overlapping assets and reallocating among the same available holdings. This efficiency gain comes from reducing redundancy and improving diversification not from adding new products. Recommendation: pursue optimization by consolidating highly correlated ETFs and then run a constrained portfolio optimization to verify improved risk adjusted returns before implementing changes.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis International Large Cap 2.50%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • iMGP DBi Managed Futures Strategy ETF 4.60%
  • KFA Mount Lucas Index Strategy ETF 0.90%
  • Weighted yield (per year) 2.34%

The blended dividend yield is about 2.34% with some holdings showing higher yields such as emerging markets and international small cap ETFs. Dividends contribute to total return and can provide stable income particularly in low growth periods but yields vary and are not guaranteed. For growth oriented investors reinvesting dividends tends to compound returns while income investors may prefer higher yielding allocations. Recommendation: align dividend strategy with cash flow needs — if income is important consider higher yield allocations or a systematic distribution plan; if growth is priority reinvest dividends to boost compounding.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® Emerging Markets Value ETF 0.36%
  • Avantis International Large Cap 0.25%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iMGP DBi Managed Futures Strategy ETF 0.85%
  • KFA Mount Lucas Index Strategy ETF 0.90%
  • Weighted costs total (per year) 0.32%

The portfolio’s expense structure averages a modest total expense ratio around 0.32% though two alternative ETFs carry higher fees near 0.85–0.90%. TER or Total Expense Ratio is the annual cost of owning a fund like a maintenance fee on a car; lower fees compound into materially better net returns over decades. The overall cost level is reasonable and supports long term performance but higher fee slices should be justified by unique diversification or return sources. Recommendation: audit each fund’s marginal contribution and consider lower cost substitutes for high fee holdings that don’t add distinct uncorrelated returns.

What next?

Ready to invest in this portfolio?

Select a broker that fits your needs and watch for low fees to maximize your returns.

Select broker

Create your own report?

Analyze your portfolio

Join our community!

Join Discord

The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.

Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.

Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.

Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.

By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.

Instrument logos provided by Elbstream.

Help us improve Insightfolio

Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey