Balanced growth-focused portfolio with a strong U.S. bias and limited diversification
Report created on Mar 8, 2025Risk profile
5/7
Diversification profile
2/5
Positions
-
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 50.00% -
VO Vanguard Russell 1000 Growth Index Fund ETF Shares
VONG - US92206C6802 50.00%
The portfolio is evenly split between two ETFs: Avantis® U.S. Small Cap Value ETF and Vanguard Russell 1000 Growth Index Fund ETF Shares, each making up 50%. This composition reflects a strong focus on U.S. equities with a growth-oriented tilt. The lack of diversification across asset classes may expose the portfolio to higher volatility. It's important to consider diversifying into other asset classes such as bonds or international equities to mitigate risk and enhance stability.
Growth
Historically, the portfolio has shown a robust Compound Annual Growth Rate (CAGR) of 17.98%, indicating strong past performance. However, it also experienced a significant maximum drawdown of -38.53%, highlighting its susceptibility to market downturns. While past performance is not indicative of future results, it's crucial to assess whether this level of volatility aligns with your risk tolerance and investment goals. Diversifying across asset classes could help mitigate potential drawdowns.
Projection
Monte Carlo simulations, which use historical data to project future outcomes, suggest a wide range of potential returns. The median projection shows a 715.9% increase, with 983 out of 1,000 simulations yielding positive returns. However, these projections are based on historical data and cannot guarantee future performance. It's essential to regularly review and adjust the portfolio to align with changing market conditions and personal investment goals.
Asset classes
- Stocks 100%
The portfolio's allocation is 100% in stocks, lacking diversification across different asset classes. This concentration in equities can lead to higher volatility, especially during market downturns. Diversifying into bonds, real estate, or other asset classes can provide a buffer against market fluctuations and potentially enhance risk-adjusted returns. Consider evaluating your risk tolerance and investment objectives to determine if a more diversified approach would be beneficial.
Sectors
- Technology 27%
- Financials 18%
- Consumer Discretionary 16%
- Industrials 11%
- Telecommunications 8%
- Energy 7%
- Health Care 5%
- Consumer Staples 4%
- Basic Materials 3%
The portfolio is heavily weighted towards technology at 27%, followed by financial services and consumer cyclicals. This sector concentration can lead to increased volatility, particularly if these sectors face downturns. While technology has been a strong performer, it's essential to evaluate whether this concentration aligns with your risk tolerance. Diversifying into other sectors can help balance the portfolio and reduce sector-specific risks.
Regions
- North America 99%
- Latin America 1%
With 99% of the portfolio allocated to North America, there's limited geographic diversification. This heavy U.S. focus may expose the portfolio to regional economic risks. Consider increasing exposure to international markets, including emerging markets, to enhance diversification and capture growth opportunities outside the U.S. This can help mitigate potential risks associated with a single region's economic fluctuations.
Market capitalization
- Mega-cap 34%
- Small-cap 27%
- Micro-cap 23%
- Large-cap 11%
- Mid-cap 6%
The portfolio's market capitalization is skewed towards mega and small caps, with a notable 23% in micro caps. This diverse size exposure can offer both growth potential and volatility. Mega caps provide stability, while small and micro caps offer growth opportunities but with higher risk. Balancing exposure across different market capitalizations can help manage risk and capture a broader range of market opportunities.
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 portfolio can be optimized for a better risk-return ratio using the Efficient Frontier, which identifies the optimal allocation for maximum returns at a given risk level. While the current expected return is slightly below the optimized portfolio's 19.45%, it's essential to consider whether the associated risk level aligns with your comfort zone. Adjusting allocations to achieve a more efficient portfolio can enhance returns without increasing risk significantly.
Dividends
- Avantis® U.S. Small Cap Value ETF 1.80%
- Vanguard Russell 1000 Growth Index Fund ETF Shares 0.60%
- Weighted yield (per year) 1.20%
The portfolio's dividend yield is 1.20%, with the Avantis® U.S. Small Cap Value ETF contributing a higher yield than the Vanguard Russell 1000 Growth Index Fund ETF. Dividends can provide a steady income stream, which is beneficial for income-focused investors. However, given the growth focus of the portfolio, dividends may not be the primary objective. It's important to balance growth and income needs based on your investment goals.
Ongoing product costs
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard Russell 1000 Growth Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.16%
The portfolio's total expense ratio (TER) is 0.16%, which is relatively low and supports better long-term performance. Keeping costs low is crucial, as high fees can erode returns over time. Regularly reviewing and comparing expense ratios across similar investments can help ensure cost efficiency. Maintaining low costs while achieving desired returns is an essential aspect of successful investing.
What next?
Ready to invest in this portfolio?
Select a broker that fits your needs and watch for low fees to maximize your returns.
Create your own report?
Join our community!
Compare your holdings
How much do the funds you hold actually overlap with the ones people weigh them against?
The information provided on this platform is for informational purposes only and should not be considered as financial or investment advice. Insightfolio does not provide investment advice, personalized recommendations, or guidance regarding the purchase, holding, or sale of financial assets. The tools and content are intended for educational purposes only and are not tailored to individual circumstances, financial needs, or objectives.
Insightfolio assumes no liability for the accuracy, completeness, or reliability of the information presented. Users are solely responsible for verifying the information and making independent decisions based on their own research and careful consideration. Use of the platform should not replace consultation with qualified financial professionals.
Investments involve risks. Users should be aware that the value of investments may fluctuate and that past performance is not an indicator of future results. Investment decisions should be based on personal financial goals, risk tolerance, and independent evaluation of relevant information.
Insightfolio does not endorse or guarantee the suitability of any particular financial product, security, or strategy. Any projections, forecasts, or hypothetical scenarios presented on the platform are for illustrative purposes only and are not guarantees of future outcomes.
By accessing the services, information, or content offered by Insightfolio, users acknowledge and agree to these terms of the disclaimer. If you do not agree to these terms, please do not use our platform.
Instrument logos provided by Elbstream.
Help us improve Insightfolio
Your feedback makes a difference! Share your thoughts in our quick survey. Take the survey