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Growth-oriented portfolio with a tilt towards small-cap and value stocks across global markets

Report created on May 3, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio exhibits a strong inclination towards small-cap value stocks, with a significant 55% allocation to international small-cap value ETFs and 15% to U.S. small-cap value ETFs. The inclusion of mid-cap momentum and broad international equity ETFs, alongside a minimal exposure to the S&P 500, suggests a deliberate strategy to diversify across market capitalizations and geographies while maintaining a growth-oriented approach. This structure contrasts with more traditional, large-cap focused portfolios, indicating a higher risk tolerance and a search for potentially higher returns through value and momentum investing strategies.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 13.17% and a maximum drawdown of -41.23%, the portfolio demonstrates robust growth with significant volatility. The days contributing to 90% of returns being concentrated in just 13.0 days highlight the portfolio's susceptibility to sharp, short-term market movements, typical of small-cap and value-oriented investments. This performance, while impressive, underscores the importance of risk tolerance and the ability to withstand periods of high volatility for potential long-term gains.

Projection Info

The Monte Carlo simulation, with 1,000 iterations, projects a wide range of potential outcomes, from a 5th percentile of 19.6% to a 67th percentile of 643.5%. This significant spread indicates the high degree of uncertainty and risk inherent in this portfolio. However, with 972 simulations showing positive returns and an annualized return of 14.75% across all simulations, the forward-looking projections suggest a favorable outlook, albeit with considerable risk.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is exclusively in stocks, with no diversification into bonds, cash, or other asset classes. This singular focus on equities enhances growth potential but also increases exposure to market volatility. Diversifying across different asset classes can mitigate risk without necessarily compromising long-term growth prospects, especially during market downturns when non-equity investments might offer stability.

Sectors Info

  • Financials
    21%
  • Industrials
    20%
  • Consumer Discretionary
    15%
  • Basic Materials
    13%
  • Energy
    9%
  • Technology
    7%
  • Consumer Staples
    6%
  • Health Care
    4%
  • Telecommunications
    2%
  • Real Estate
    2%
  • Utilities
    2%

The sectoral distribution is well-diversified, covering financial services, industrials, consumer cyclicals, and basic materials as the top sectors. This spread across cyclical and defensive sectors can help balance the portfolio's performance across different economic cycles. However, the relatively lower allocation to technology and healthcare might limit exposure to high-growth areas, especially in a rapidly evolving global market landscape.

Regions Info

  • North America
    42%
  • Europe Developed
    28%
  • Japan
    19%
  • Australasia
    6%
  • Africa/Middle East
    3%
  • Asia Developed
    2%

Geographic allocation emphasizes developed markets, with significant exposure to North America and Europe, alongside notable positions in Japan and Australasia. This diversification supports risk management by spreading exposure across different economic and political environments. However, the absence of emerging markets might limit potential high-growth opportunities, particularly in Asia and Latin America, which could add valuable diversification and return potential.

Market capitalization Info

  • Mid-cap
    39%
  • Small-cap
    39%
  • Micro-cap
    9%
  • Large-cap
    6%
  • Mega-cap
    5%

The portfolio's focus on small and medium-cap stocks, comprising 78% of the allocation, aligns with its growth and value orientation. This focus tends to offer higher growth potential but comes with increased volatility and risk compared to larger-cap stocks. Including a broader mix of market capitalizations could enhance stability without significantly diluting growth prospects.

Redundant positions Info

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

The high correlation between the Avantis® International Equity ETF and the Avantis® International Small Cap Value ETF indicates overlapping exposures, which can limit the benefits of diversification. Reducing redundancy by reallocating from highly correlated assets to less correlated options within or across asset classes can enhance portfolio efficiency and risk-adjusted 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.

Click on the colored dots to explore allocations.

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To optimize the portfolio for risk and return, consider reducing overlap in highly correlated assets, which currently offer limited diversification benefits. Employing the Efficient Frontier model can help identify an allocation that maximizes returns for a given level of risk, potentially improving the portfolio's overall performance by adjusting the balance between growth-focused and more stable investments.

Dividends Info

  • Avantis® International Equity ETF 2.90%
  • Avantis® International Small Cap Value ETF 3.80%
  • Avantis® U.S. Small Cap Value ETF 1.90%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Invesco S&P MidCap Momentum ETF 0.50%
  • Weighted yield (per year) 2.80%

The portfolio's average dividend yield of 2.80% contributes to its total return, combining growth and income. This yield is particularly notable in the context of its growth-focused strategy, providing a steady income stream which can be reinvested for compounding effects. However, the focus on dividends should not overshadow the primary growth objectives, especially in sectors or regions where reinvestment opportunities may drive higher long-term returns.

Ongoing product costs Info

  • Avantis® International Equity ETF 0.23%
  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.31%

With an average total expense ratio (TER) of 0.31%, the portfolio's costs are moderately low, supporting higher net returns over the long term. Keeping costs low is crucial for enhancing investment efficiency, especially in a growth-oriented portfolio where compound returns can significantly amplify the impact of ongoing fees.

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