A Growth-Oriented Portfolio with a Strong Emphasis on Small Cap and Emerging Markets

Report created on Jul 19, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is structured with a significant allocation towards small-cap value ETFs in both the U.S. and international markets, comprising 40% of the total. This is complemented by substantial positions in broad market ETFs, including the Vanguard S&P 500 ETF and Vanguard FTSE Developed and Emerging Markets Index Fund ETF Shares. The emphasis on small-cap and emerging markets indicates a strategy aimed at capitalizing on the higher growth potential of these segments, albeit with increased volatility and risk. The portfolio is broadly diversified across sectors and geographies, with a notable lean towards financial services and technology.

Growth Info

Historically, the portfolio has demonstrated a Compound Annual Growth Rate (CAGR) of 14.30%, with a maximum drawdown of -39.31%. These figures suggest that while the portfolio has offered strong returns, it has also experienced significant volatility, evidenced by the substantial drawdown. The days contributing to 90% of returns being concentrated in just 15 days highlight the portfolio's susceptibility to sharp, short-term movements, underscoring the importance of a long-term investment horizon to weather volatility.

Projection Info

Utilizing Monte Carlo simulation, a method that forecasts potential outcomes by varying random inputs within historical ranges, the portfolio's future performance scenarios range widely. The median projection suggests a 323.5% return, with a lower-end 5th percentile at 10.9% and a higher-end 67th percentile at 507.0%. This wide distribution underscores the inherent uncertainty in predicting stock market performance, especially in portfolios with high exposure to small-cap and emerging markets.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's allocation is heavily skewed towards stocks, with a 99% investment in equities and only a 1% holding in cash. This allocation is reflective of a growth-oriented strategy, prioritizing capital appreciation over income or stability. The absence of bonds or other fixed-income assets further emphasizes the portfolio's aggressive stance, suitable for investors with a higher risk tolerance and a longer investment horizon.

Sectors Info

  • Financials
    21%
  • Technology
    17%
  • Industrials
    14%
  • Consumer Discretionary
    13%
  • Energy
    7%
  • Basic Materials
    7%
  • Health Care
    6%
  • Consumer Staples
    6%
  • Telecommunications
    6%
  • Real Estate
    2%
  • Utilities
    2%

Sectoral distribution shows a balanced mix, with the highest allocations in financial services and technology, followed by industrials and consumer cyclicals. This sectoral composition is well-aligned with a growth-focused investment approach, leveraging sectors that typically offer higher growth potential. However, the concentration in these sectors also introduces sector-specific risks, which should be monitored for overexposure.

Regions Info

  • North America
    61%
  • Europe Developed
    10%
  • Asia Emerging
    9%
  • Asia Developed
    7%
  • Japan
    5%
  • Africa/Middle East
    3%
  • Latin America
    2%
  • Australasia
    2%
  • Europe Emerging
    1%

Geographic exposure is predominantly in North America (61%), with diversified investments across developed and emerging markets in Europe, Asia, and other regions. This global distribution enhances the portfolio's diversification, reducing the impact of regional downturns. However, the significant tilt towards North America may expose the portfolio to regional economic and political risks, suggesting a potential area for rebalancing to ensure global diversification.

Market capitalization Info

  • Mega-cap
    23%
  • Small-cap
    21%
  • Mid-cap
    20%
  • Large-cap
    18%
  • Micro-cap
    16%

The portfolio's market capitalization exposure is well-distributed among mega, small, medium, big, and micro-cap stocks. This diversified cap-size allocation can potentially offer a balance between the stability of larger companies and the growth potential of smaller firms. However, the notable allocation to small and micro-cap stocks aligns with the portfolio's growth-oriented strategy, accepting higher volatility for the prospect of higher 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.

Considering the Efficient Frontier, an analysis aimed at maximizing returns for a given level of risk, the portfolio's current allocation appears to be well-positioned. However, ongoing review and potential rebalancing could further optimize its position on the Efficient Frontier, ensuring the best possible risk-return trade-off. This optimization process is dynamic and should be revisited periodically to adjust for changes in market conditions and investment objectives.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.80%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • WisdomTree Emerging Markets SmallCap Dividend Fund 2.70%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 2.70%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 2.06%

The portfolio's dividend yield stands at an overall 2.06%, with individual ETF yields ranging from 1.20% to 3.80%. While not the primary focus of this growth-oriented strategy, dividends contribute to the portfolio's total return and offer a modest income stream. The variation in yields across the ETFs reflects the differing dividend policies and sectoral compositions of the underlying investments.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • WisdomTree Emerging Markets SmallCap Dividend Fund 0.58%
  • Vanguard FTSE Developed Markets Index Fund ETF Shares 0.05%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.19%

The portfolio's total expense ratio (TER) of 0.19% is impressively low, particularly given the broad international exposure and the inclusion of specialized small-cap funds. Keeping costs low is crucial for enhancing long-term returns, as even small differences in fees can compound significantly over time. This low-cost approach aligns well with best practices in portfolio management.

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