A globally diversified growth-focused portfolio with significant small cap value exposure

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

Growth Investors

This portfolio is well-suited for an investor with a growth-oriented mindset, willing to accept moderate to high risk for the potential of higher returns. The broad diversification across global equities, with a focus on small-cap value stocks, aligns with a long-term horizon. Such an investor is likely focused on capital appreciation rather than income generation, making this portfolio ideal for building wealth over time. Regular monitoring and adjustments can help maintain alignment with evolving financial goals and market conditions.

Positions

  • Vanguard Total World Stock Index Fund ETF Shares
    VT - US9220427424
    75.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    15.00%
  • Avantis® International Small Cap Value ETF
    AVDV - US0250728021
    10.00%

The portfolio comprises three ETFs, with a predominant allocation to the Vanguard Total World Stock Index Fund ETF at 75%, followed by Avantis U.S. Small Cap Value ETF at 15%, and Avantis International Small Cap Value ETF at 10%. This structure suggests a strong emphasis on global equity exposure, particularly in large-cap stocks, while also incorporating small-cap value stocks for potential higher returns. Compared to a typical growth-focused benchmark, the portfolio has a balanced approach between global large caps and small caps, enhancing diversification. Consider maintaining this balance to capture growth across different market segments and regions.

Growth Info

Historically, the portfolio has delivered a strong Compound Annual Growth Rate (CAGR) of 13.48%, which is impressive relative to many equity benchmarks. The maximum drawdown of -37.06% indicates significant volatility, typical for growth portfolios. The concentration of returns in just 14 days underscores the importance of staying invested through market cycles to capture gains. This historical performance suggests a robust growth trajectory, but it's essential to be prepared for potential downturns. Regularly reviewing performance against benchmarks can help ensure alignment with growth objectives.

Projection Info

Using Monte Carlo simulations, which analyze potential future outcomes based on historical data, the portfolio shows a promising outlook. With a median projected growth of 374.2% and a 67th percentile projection of 615.8%, the simulations suggest significant upside potential. However, the 5th percentile at 7.1% highlights the inherent uncertainty in future market conditions. While these projections are useful, they rely on past data and cannot predict future events. Monitoring economic indicators and adjusting allocations as needed can help manage risks and optimize returns.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%
  • Other
    0%
  • Bonds
    0%
  • No data
    0%

The portfolio's asset allocation is heavily weighted towards stocks at 99%, with a negligible 1% in cash. This high equity exposure aligns with a growth-oriented strategy, aiming for capital appreciation over income generation. Compared to a diversified benchmark, this allocation is aggressive, focusing on maximizing returns through equities. While this approach can yield substantial gains, it also increases exposure to market volatility. Consider periodically reassessing the allocation to ensure it aligns with risk tolerance and financial goals.

Sectors Info

  • Technology
    20%
  • Financials
    19%
  • Industrials
    13%
  • Consumer Discretionary
    13%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    6%
  • Consumer Staples
    5%
  • Real Estate
    2%
  • Utilities
    2%

The portfolio is well-diversified across sectors, with notable allocations in technology (20%), financial services (19%), and industrials (13%). This aligns closely with common benchmarks, ensuring broad exposure to various economic segments. The tech-heavy allocation may lead to higher volatility, especially during interest rate hikes. Balancing sector weights can help mitigate risks associated with sector-specific downturns. Regularly reviewing sector performance and trends can help maintain a balanced exposure that aligns with market conditions.

Regions Info

  • North America
    66%
  • Europe Developed
    15%
  • Japan
    7%
  • Asia Emerging
    4%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    2%
  • Latin America
    1%
  • Europe Emerging
    0%

Geographically, the portfolio is predominantly exposed to North America (66%), with additional allocations in Europe Developed (15%) and Japan (7%). This allocation provides a solid foundation in established markets while offering some diversification through international exposure. Compared to global benchmarks, the portfolio slightly underweights emerging markets, which could limit potential growth opportunities. Consider increasing exposure to emerging markets to enhance diversification and capture growth in rapidly developing regions. This can help balance the portfolio's geographic risk and return potential.

Market capitalization Info

  • Mega-cap
    32%
  • Large-cap
    24%
  • Mid-cap
    20%
  • Small-cap
    16%
  • Micro-cap
    8%

The portfolio's market capitalization distribution is skewed towards larger companies, with 32% in mega caps and 24% in big caps. Medium caps account for 20%, while small and micro caps make up 16% and 8%, respectively. This distribution provides a mix of stability from larger companies and growth potential from smaller ones. Compared to typical benchmarks, the portfolio's small-cap exposure is higher, aligning with a growth strategy. Maintaining this balance can help capture opportunities across different company sizes, enhancing diversification.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.10%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard Total World Stock Index Fund ETF Shares 1.90%
  • Weighted yield (per year) 2.09%

The portfolio's overall dividend yield is 2.09%, with contributions from each ETF. While dividends provide a steady income stream, the portfolio's focus is primarily on growth rather than income. For growth-oriented investors, dividends can still play a role in total returns, providing a cushion during market volatility. Compared to income-focused portfolios, the yield is modest but consistent with a growth strategy. Monitoring dividend yields and payout trends can help assess the income contribution to overall returns.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.13%

The portfolio's total expense ratio (TER) is a low 0.13%, with the Vanguard ETF contributing the most cost-effectiveness at 0.07%. Keeping costs low is crucial for improving long-term returns, as high fees can erode gains over time. Compared to industry averages, this TER is impressively low, supporting better performance. Continuously monitoring and managing costs can ensure the portfolio remains efficient. Consider reviewing TERs periodically and exploring cost-effective options to maintain a low-cost structure.

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's risk-return profile can potentially be optimized using the Efficient Frontier, a concept that identifies the best possible risk-return ratio based on current assets. This optimization focuses on reallocating existing assets to improve returns for a given level of risk. While the portfolio is already well-diversified, exploring optimization opportunities can enhance performance. Regularly reviewing the portfolio's position on the Efficient Frontier can help ensure it remains aligned with growth objectives and risk tolerance.

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