A growth-focused portfolio with a strong emphasis on U.S. equities and moderate diversification

Risk profile

  • Secure
    Speculative

The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.

Diversification profile

  • Focused
    Diversified

The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.

What type of investor this portfolio is suitable for

Growth Investors

This portfolio suits an investor with a growth-oriented mindset, moderate risk tolerance, and a long-term horizon. It emphasizes capital appreciation through U.S.-centric equity exposure, making it ideal for individuals seeking to build wealth over time. The investor should be comfortable with potential volatility and willing to endure market fluctuations for higher returns. A focus on growth rather than income aligns with younger investors or those with extended investment horizons.

Positions

  • iShares Core S&P 500 ETF
    IVV - US4642872000
    60.00%
  • Avantis® U.S. Small Cap Value ETF
    AVUV - US0250728773
    15.00%
  • iShares Core S&P Mid-Cap ETF
    IJH - US4642875078
    15.00%
  • Avantis® International Small Cap Value ETF
    AVDV - US0250728021
    10.00%

The portfolio is heavily weighted towards U.S. equities, with 60% in the iShares Core S&P 500 ETF, 15% in the Avantis® U.S. Small Cap Value ETF, and 15% in the iShares Core S&P Mid-Cap ETF. The remaining 10% is allocated to the Avantis® International Small Cap Value ETF. This composition shows a strong preference for U.S. stocks, aligning with a growth-focused strategy. While the allocation provides exposure to different market segments, it may benefit from further diversification beyond U.S. borders to mitigate potential domestic market risks.

Growth Info

Historically, the portfolio has delivered a robust Compound Annual Growth Rate (CAGR) of 12.64%, indicating strong performance over time. However, it experienced a significant maximum drawdown of -37.47%, highlighting its vulnerability during market downturns. Compared to benchmarks, this performance suggests a high-risk, high-reward profile. Investors should consider whether they are comfortable with such volatility, especially if nearing retirement or other financial goals that require stability.

Projection Info

The Monte Carlo simulation, which uses historical data to project future outcomes, suggests a 50th percentile end value of 252.5% and a 67th percentile of 462.1%. This indicates a wide range of potential outcomes, reflecting the inherent uncertainty in investing. While 911 out of 1,000 simulations showed positive returns, the 5th percentile projects a -27.5% outcome, emphasizing the importance of risk management. Investors should prepare for variability and ensure their financial plans can withstand potential downturns.

Asset classes Info

  • Stocks
    100%
  • Cash
    0%
  • Bonds
    0%
  • Other
    0%
  • No data
    0%

The portfolio is solely invested in stocks, with no exposure to bonds, cash, or other asset classes. This 100% stock allocation aligns with a growth strategy but may increase volatility and risk, particularly in bear markets. Diversifying into other asset classes could enhance stability and reduce risk, especially for investors with lower risk tolerance or shorter investment horizons. Consider adding bonds or other assets to balance potential returns with risk.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    12%
  • Consumer Discretionary
    12%
  • Health Care
    9%
  • Telecommunications
    6%
  • Energy
    6%
  • Consumer Staples
    5%
  • Basic Materials
    5%
  • Real Estate
    3%
  • Utilities
    2%

Sector allocation is led by Technology (22%) and Financial Services (17%), with notable exposure to Industrials and Consumer Cyclicals. This sector balance aligns with common benchmarks, suggesting diversified sector exposure. However, over-reliance on technology could lead to higher volatility, particularly during interest rate hikes. Investors might consider adjusting sector weights to align with personal risk tolerance and market outlook.

Regions Info

  • North America
    90%
  • Europe Developed
    5%
  • Japan
    3%
  • Australasia
    1%
  • Africa/Middle East
    0%
  • Latin America
    0%
  • Asia Developed
    0%
  • Asia Emerging
    0%

The portfolio is predominantly focused on North America (90%), with minimal exposure to Europe Developed (5%) and Japan (3%). This geographic concentration increases vulnerability to U.S. market fluctuations. Diversifying into emerging markets or other developed regions could enhance global exposure and reduce dependency on the U.S. economy. Investors should evaluate whether this geographic distribution aligns with their long-term goals and risk appetite.

Market capitalization Info

  • Mega-cap
    28%
  • Small-cap
    22%
  • Large-cap
    21%
  • Mid-cap
    21%
  • Micro-cap
    8%

Market capitalization distribution is well-balanced, with Mega (28%), Small (22%), Big (21%), and Medium (21%) caps. This spread provides exposure to various company sizes, offering a blend of growth and stability. However, the 8% allocation to Micro caps introduces additional risk due to their potential volatility. Investors should assess whether this exposure matches their risk tolerance and consider adjusting allocations if necessary.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.50%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • iShares Core S&P Mid-Cap ETF 1.30%
  • iShares Core S&P 500 ETF 1.20%
  • Weighted yield (per year) 1.60%

With a total dividend yield of 1.60%, the portfolio offers modest income potential. The Avantis® International Small Cap Value ETF contributes a significant 4.50% yield, enhancing overall returns. For growth-oriented investors, dividends provide a steady income stream, but those seeking higher income might explore additional high-yield options. Balancing growth and income can optimize returns while meeting cash flow needs.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • iShares Core S&P Mid-Cap ETF 0.05%
  • iShares Core S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.10%

The portfolio's Total Expense Ratio (TER) is impressively low at 0.10%, supporting better long-term performance by minimizing costs. Lower fees can significantly enhance compounding returns over time, aligning with best practices for cost-efficient investing. Continue monitoring expense ratios and consider cost-effective alternatives if fees rise. This focus on cost management is a strong indicator of portfolio efficiency.

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.

The portfolio can be optimized using the Efficient Frontier, which aims to achieve the best possible risk-return ratio with current assets. Adjusting allocations to align with this model could potentially enhance returns without increasing risk. However, such optimization should consider personal investment goals and risk tolerance. Efficiency focuses on maximizing returns for a given level of risk, not necessarily achieving diversification.

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