Concentrated small cap value portfolio evenly split between US and international small cap value ETFs

Report created on Dec 13, 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 is a simple two‑ETF structure with a 50/50 split between a U.S. small cap value ETF and an international small cap value ETF. That makes it 100% equities with no bonds or cash and a heavy tilt to small and micro caps versus a typical broad market benchmark that includes large caps and fixed income. This concentrated but clear construction matters because it determines how the portfolio behaves in different market regimes. Recommendation: keep the simplicity if the objective is pure small cap value exposure, or add other asset classes to better align the structure with broader benchmark mixes and personal goals.

Growth Info

Using an example $10,000 starting amount the portfolio’s historical CAGR is 16.39% which means an average annual growth rate over time — CAGR is like measuring a car’s average speed over a long trip. The portfolio outperformed many broad equity averages historically but experienced a max drawdown near -46%, showing deep volatility and risk of large losses in downturns. Also 90% of returns came from just 18 trading days, highlighting concentration of upside. Recommendation: recognize the upside potential but plan for large swings by matching allocations to time horizon and liquidity needs and using rebalancing or cash buffers to manage drawdowns.

Projection Info

A Monte Carlo simulation was run using 1,000 paths to estimate a range of possible outcomes; Monte Carlo uses random sampling based on historical return patterns to show many hypothetical futures. Key percentiles show a 5th percentile end value of 63.1% and a median of 584.3% indicating a wide outcome spread and an annualized simulated return around 17.41%. Simulations are helpful for planning but aren’t guarantees — they assume past distributional behavior and can miss structural market changes. Recommendation: use these scenarios to set realistic goals and contingencies rather than expecting exact outcomes.

Asset classes Info

  • Stocks
    100%

The portfolio is 100% stocks with 0% allocated to bonds, cash, or alternatives, which deviates from balanced benchmark norms that usually include fixed income for risk dampening. Stocks offer higher long‑term expected returns but also higher short‑term volatility; having no fixed income or cash means no explicit hedge or liquidity cushion. Recommendation: if the investor’s time horizon or risk tolerance isn’t extreme, consider introducing a non‑equity sleeve to reduce sequence‑of‑returns risk and provide rebalancing capital, or commit to the full equity stance only with a clear plan for managing volatility.

Sectors Info

  • Financials
    21%
  • Industrials
    20%
  • Consumer Discretionary
    18%
  • Energy
    13%
  • Basic Materials
    13%
  • Technology
    6%
  • Consumer Staples
    3%
  • Health Care
    3%
  • Telecommunications
    2%
  • Real Estate
    1%
  • Utilities
    1%

Sector exposure is tilted toward financials (21%), industrials (20%), consumer cyclicals (18%), energy (13%) and materials (13%), with minimal weight to technology and defensive sectors. This cyclical bias can increase sensitivity to economic cycles interest rate moves and commodity swings; it may outperform in recoveries but lag in slowdowns. The sector mix roughly matches value‑tilted small cap patterns rather than broad market benchmarks. Recommendation: if you want smoother performance, add exposures that reduce cyclicality or consider periodic sector reviews to ensure passive drift hasn’t created unintended concentrations.

Regions Info

  • North America
    55%
  • Europe Developed
    19%
  • Japan
    17%
  • Australasia
    5%
  • Africa/Middle East
    3%
  • Asia Developed
    1%
  • Latin America
    1%
  • Asia Emerging
    1%

Geographic exposure leans North America at 55% with meaningful allocations to developed Europe and Japan and only minimal emerging market exposure. Compared with global benchmarks this is slightly underweight large emerging and certain Asian developed markets. Geographic tilt affects currency risk political and economic sensitivity and diversification benefits across growth drivers. Recommendation: accept the regional tilt if it aligns with the small cap value strategy, or selectively add broader international and emerging allocations to capture different growth drivers and reduce single‑region dependency.

Market capitalization Info

  • Small-cap
    43%
  • Mid-cap
    28%
  • Micro-cap
    28%

The market cap profile is heavily weighted to small (43%), medium (28%) and micro caps (28%) with no large cap exposure. Small and micro caps often offer higher long‑term return potential but come with higher volatility, lower liquidity and wider bid‑ask spreads. This structure is consistent with a small cap value mandate but concentrates company‑level risk. Recommendation: ensure a long investment horizon and tolerance for illiquidity; if stability is needed, a portion of large caps can reduce volatility without removing the small cap return engine entirely.

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.

Efficient Frontier optimization finds the portfolios that offer the highest expected return for a given level of risk using only the assets available; the Efficient Frontier is a curve showing those best risk‑return combinations. With only two similar ETFs optimization can only adjust weights between them, which limits improvement in risk diversification. Recommendation: to meaningfully shift the efficient frontier consider adding asset classes with different return drivers before running optimization; remember efficiency means best risk‑return tradeoff not automatically better diversification or alignment with goals.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Weighted yield (per year) 2.45%

The portfolio yield averages about 2.45% driven by a 3.30% yield from the international small cap value ETF and 1.60% from the U.S. small cap value ETF. Dividends provide income and can cushion total return during flat markets, but small caps often have variable and less predictable dividend streams compared with large caps. For growth oriented investors dividends can be reinvested to accelerate compounding. Recommendation: if income is a priority, consider a portion dedicated to higher‑yielding assets or an income sleeve, otherwise continue reinvesting distributions to support long‑term growth.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Weighted costs total (per year) 0.30%

The blended total expense ratio (TER) sits around 0.30% which is relatively low for active or specialty small cap value exposures and supports better long‑term compounding — TER is the annual fee charged by funds and acts like a drag on returns. Low ongoing costs are a clear strength here and align with good portfolio construction principles. Recommendation: maintain cost awareness by minimizing turnover and avoiding frequent trading which adds execution costs and taxes; lower TERs free up return potential and are especially valuable over long horizons.

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