Globally diversified equity portfolio with balanced factor exposure and room to sharpen risk efficiency
Report created on Jun 6, 2024Risk profile
4/7
Diversification profile
4/5
Positions
-
IX iShares Core MSCI Total International Stock ETF
IXUS - US46432F8344 47.50% -
QQ Invesco NASDAQ 100 ETF
QQQM - US46138G6492 22.50% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 10.00% -
VE Vanguard FTSE Developed Markets Index Fund ETF Shares
VEA - US9219438580 10.00% -
VT Vanguard Value Index Fund ETF Shares
VTV - US9229087443 10.00%
The portfolio is a five‑ETF, all‑stock mix with a clear tilt toward international markets and large caps. Nearly half sits in a broad international ETF, backed by a sizable growth engine from a NASDAQ 100 fund and diversifiers in U.S. value and small‑cap value. This structure is simple, easy to monitor, and broadly diversified across thousands of companies. Having everything in equities means higher long‑term growth potential but also sharper swings than a mix that includes bonds or cash. For someone comfortable riding out volatility, this focused equity approach can be powerful. For anyone wanting smoother short‑term outcomes, adding some defensive assets outside this lineup could be worth considering.
Growth
Historically, $1,000 grew to about $1,858 over the period, a compound annual growth rate (CAGR) of 12.07%. CAGR is like your “average speed” over the whole journey, smoothing out bumps along the way. The portfolio slightly lagged the U.S. market but beat the global market, which is a solid outcome given the broad diversification. The max drawdown of about -27% shows the kind of hit it took in tough stretches, similar to global stocks but a bit worse than the U.S. market. Only 20 days drove 90% of returns, underlining why staying invested through ups and downs matters more than trying to time short bursts of performance.
Asset classes
- Stocks 100%
All of the allocation is in stocks, with no bonds, cash, or alternatives. That creates a very growth‑oriented profile, consistent with an equity investor who prioritizes long‑term appreciation over short‑term stability. Compared with many “balanced” mixes that may hold 40–60% in bonds, this is much more aggressive. The advantage is greater potential returns over long horizons; the tradeoff is that in major downturns, there’s no built‑in stabilizer from fixed income. For someone with a long horizon and steady income outside the portfolio, this can still be sensible. Anyone needing near‑term withdrawals might want to park that cash in safer assets outside this setup.
Sectors
- Technology 22%
- Financials 18%
- Industrials 13%
- Consumer Discretionary 10%
- Health Care 7%
- Telecommunications 7%
- Consumer Staples 6%
- Energy 6%
- Basic Materials 5%
- Utilities 3%
- Real Estate 2%
Sector exposure is well spread, with technology leading but not dominating and meaningful allocations to financials, industrials, and several smaller sectors. Tech‑heavy allocations can be more volatile when interest rates move or when growth stories are questioned, but here tech sits at about one‑fifth of the mix rather than an extreme tilt. The presence of financials, industrials, and consumer areas helps smooth sector‑specific shocks and is nicely aligned with broad global benchmarks. This balance supports resilience across different economic environments—growth booms, manufacturing cycles, or consumer‑driven recoveries—rather than betting heavily on a single storyline.
Regions
- North America 47%
- Europe Developed 23%
- Japan 9%
- Asia Developed 8%
- Asia Emerging 6%
- Australasia 3%
- Africa/Middle East 2%
- Latin America 1%
Geographically, exposure is roughly half North America and half the rest of the world, with notable allocations to Europe, Japan, and other developed and emerging regions. This is more globally diversified than many U.S.‑centric portfolios and aligns well with worldwide market weights. The benefit is reduced dependence on any single economy or currency; weak performance in one region can be offset by strength elsewhere. It also gives access to different interest rate regimes and growth profiles. The flip side is that returns can lag a purely U.S. portfolio during long stretches when the U.S. outperforms, but the global spread is a strong diversification feature.
Market capitalization
- Mega-cap 41%
- Large-cap 31%
- Mid-cap 15%
- Small-cap 7%
- Micro-cap 5%
The market‑cap mix is anchored in mega and large caps, together over 70%, with meaningful mid and smaller‑company exposure. Large, established firms tend to be more stable and widely researched, which can dampen extreme volatility compared with a pure small‑cap strategy. At the same time, having around 12% in small and micro caps adds a dose of higher‑risk, higher‑potential growth, especially during economic expansions. This blend keeps the core of the portfolio in global blue chips while still giving some participation in more dynamic smaller businesses. It’s a solid, benchmark‑like structure with a slight growth kick from the smaller end of the market.
True holdings
-
NV NVIDIA Corporation 1.92%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
23 Taiwan Semiconductor Manufacturing Co. Ltd. 1.69%
Part of fund(s):- iShares Core MSCI Total International Stock ETF
-
AA Apple Inc 1.66%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
MS Microsoft Corporation 1.28%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
AM Amazon.com Inc 1.02%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
WM Walmart Inc. Common Stock 0.95%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Vanguard Value Index Fund ETF Shares
-
TS Tesla Inc 0.86%
Part of fund(s):- Invesco NASDAQ 100 ETF
- LS 1x Tesla Tracker ETP Securities GBP
-
ME Meta Platforms Inc. 0.80%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
GO Alphabet Inc Class A 0.79%
Part of fund(s):- Invesco NASDAQ 100 ETF
-
GO Alphabet Inc Class C 0.73%
Part of fund(s):- Invesco NASDAQ 100 ETF
- Top 10 total 11.71%
Looking through ETF top holdings, exposure leans toward mega names like NVIDIA, TSMC, Apple, Microsoft, Amazon, and Alphabet. Each shows up through multiple funds, creating hidden concentration even though you only hold ETFs. This overlap is normal in broad index products but means part of the portfolio’s fate ties closely to large global tech and platform companies. Because only top‑10 ETF holdings are captured, real overlap is probably higher than reported. The upside is strong participation in dominant businesses; the tradeoff is being more sensitive to swings in these few giants than the simple ETF count might suggest.
Factors
Factor exposure is strikingly balanced across value, size, momentum, quality, yield, and low volatility, all sitting in the neutral band. Factor exposure describes how much a portfolio leans into specific traits—like cheapness (value) or trend following (momentum)—that research links to returns. Here, no single factor stands out as a strong tilt, meaning behavior should resemble a broad global market rather than a niche style play. That’s actually a positive for investors seeking a “plain vanilla” core that doesn’t rely on any particular factor premium. It also means outcomes will be driven more by overall market direction and asset mix than by specialized factor bets.
Risk contribution
-
iShares Core MSCI Total International Stock ETF
Weight: 47.50% 44.7% -
Invesco NASDAQ 100 ETF
Weight: 22.50% 26.8% -
Avantis® U.S. Small Cap Value ETF
Weight: 10.00% 11.7% -
Vanguard FTSE Developed Markets Index Fund ETF Shares
Weight: 10.00% 9.5% -
Vanguard Value Index Fund ETF Shares
Weight: 10.00% 7.3%
Risk contribution shows how much each holding drives the portfolio’s overall ups and downs, which can differ from simple weights. The international ETF is about half the portfolio and contributes roughly half the risk, so its impact is proportional. The NASDAQ 100 and U.S. small‑cap value funds punch slightly above their weights, each adding more risk than their allocation share—typical for growth and small‑cap strategies. Together, the top three positions generate over 80% of total risk. That’s not alarming, but it does mean changes to these three will meaningfully alter volatility. Adjusting their sizes is the main lever for dialling overall risk up or down.
Redundant positions
-
High correlationVanguard FTSE Developed Markets Index Fund ETF SharesiShares Core MSCI Total International Stock ETF
Correlation measures how closely assets move together, from -1 (opposites) to +1 (identical). The international ETF and the developed‑markets ETF are extremely tightly correlated at 0.98, meaning they tend to rise and fall almost in lockstep. Holding both still increases coverage slightly, but it adds less diversification than the ticker count suggests. In practice, those two operate as one big developed‑ex‑U.S. sleeve. That’s not inherently a problem, but it’s useful context: if the goal is to broaden diversification, future tweaks might look at either simplifying that pair or adding exposures that behave differently rather than layering similar funds on top of each other.
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‑return chart shows the current portfolio has a Sharpe ratio of 0.67, below what’s achievable with the same ingredients. The Sharpe ratio compares return to volatility, like measuring how much “reward” you get for each unit of risk. The optimal mix of your existing ETFs reaches a Sharpe of 0.93 with slightly lower risk and higher return, and even the minimum‑variance blend looks more efficient. Being about 3 percentage points below the efficient frontier at today’s risk level means there’s room to improve by reweighting, not by adding new products. Small allocation shifts could meaningfully sharpen risk‑adjusted performance while keeping the same simple fund lineup.
Dividends
- Avantis® U.S. Small Cap Value ETF 1.40%
- iShares Core MSCI Total International Stock ETF 3.20%
- Invesco NASDAQ 100 ETF 0.50%
- Vanguard FTSE Developed Markets Index Fund ETF Shares 3.00%
- Vanguard Value Index Fund ETF Shares 2.00%
- Weighted yield (per year) 2.27%
The portfolio’s overall dividend yield of about 2.27% comes mainly from international and value holdings, while the NASDAQ 100 adds relatively little income. Dividends are cash payments from companies and can provide a “baseline” return that shows up even when prices move sideways. For an all‑equity portfolio, this yield is reasonable and in line with a globally diversified mix that tilts slightly toward value. It can support modest reinvestment or small withdrawals without entirely relying on selling shares. Still, the main driver here is capital growth, not income, so anyone seeking higher regular cash flow would typically look to complement this with other income‑focused assets.
Ongoing product costs
- Avantis® U.S. Small Cap Value ETF 0.25%
- iShares Core MSCI Total International Stock ETF 0.07%
- Invesco NASDAQ 100 ETF 0.15%
- Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
- Vanguard Value Index Fund ETF Shares 0.04%
- Weighted costs total (per year) 0.10%
The weighted total expense ratio (TER) is about 0.10%, which is impressively low for such broad global coverage. TER is the annual fee the funds deduct behind the scenes, like a small drag on performance every year. Keeping this number down is one of the easiest ways to improve long‑term results, because savings compound over decades just like returns do. Here, the use of low‑cost index funds and a reasonably priced small‑cap value ETF keeps expenses firmly in the “best practice” zone. From a cost perspective, this setup is already in great shape, and there’s no pressing need to chase marginally cheaper options.
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