A growth-oriented portfolio with a strong tilt towards small-cap and value stocks

Report created on Aug 23, 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 heavily invested in equities, with a 50% allocation in a U.S. Equity ETF, 25% in an International Small Cap Value ETF, and 25% in a U.S. Small Cap Value ETF. This composition signifies a growth-oriented strategy with a focus on small-cap and value stocks, aiming to capitalize on the potential for higher returns associated with these segments. Compared to a more traditional, diversified approach, this portfolio leans towards higher risk and reward, given its concentration in specific market segments and geographic areas.

Growth Info

Historically, the portfolio has shown a Compound Annual Growth Rate (CAGR) of 16.20%, which is impressive. However, it's important to note the significant maximum drawdown of -40.87%, indicating a high level of volatility and risk. The days that contribute to 90% of the returns being concentrated in just 17.0 days highlight the portfolio's dependency on short, strong market movements for gains. This performance pattern underscores the importance of a long-term investment horizon and a high risk tolerance for investors in this portfolio.

Projection Info

Monte Carlo simulations, which use historical data to project future outcomes, show a wide range of potential returns for this portfolio, with a median (50th percentile) increase of 554.1%. While simulations suggest a high likelihood of positive returns (977 out of 1,000 simulations), it's critical to remember that these projections are not guarantees. They serve to illustrate potential volatility and the range of outcomes an investor might expect, reinforcing the need for risk tolerance in this growth-focused strategy.

Asset classes Info

  • Stocks
    100%

The portfolio is entirely allocated to stocks, with no positions in cash, bonds, or other asset classes. This singular focus on equities maximizes growth potential but also increases volatility and risk, especially during market downturns. Diversifying across different asset classes can help mitigate risk, as bonds and other non-equity investments often move inversely to stock markets, providing a buffer during equity market declines.

Sectors Info

  • Financials
    20%
  • Industrials
    16%
  • Consumer Discretionary
    15%
  • Technology
    15%
  • Energy
    9%
  • Basic Materials
    7%
  • Telecommunications
    6%
  • Health Care
    5%
  • Consumer Staples
    5%
  • Utilities
    2%

Sector allocation shows a diversified spread across financial services, industrials, consumer cyclicals, and technology, each representing significant portions of the portfolio. This sectoral distribution supports the portfolio's growth orientation but may expose it to sector-specific risks, such as regulatory changes or economic cycles affecting consumer spending. Balancing sector exposure can help manage these risks while still targeting growth.

Regions Info

  • North America
    76%
  • Europe Developed
    10%
  • Japan
    9%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Asia Developed
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily weighted towards North America (76%), with smaller exposures to developed markets in Europe and Japan. This concentration in developed markets, particularly the U.S., may limit exposure to emerging market growth opportunities, which can offer diversification benefits and potential for higher returns. Considering a slight increase in emerging markets exposure could enhance long-term growth prospects and diversification.

Market capitalization Info

  • Small-cap
    26%
  • Mid-cap
    25%
  • Mega-cap
    17%
  • Micro-cap
    15%
  • Large-cap
    13%

The portfolio's market capitalization exposure is balanced across small (26%), medium (25%), mega (17%), micro (15%), and big (13%) cap stocks. This distribution indicates a strategic focus on smaller companies, which often offer higher growth potential but come with increased volatility and risk. Ensuring this balance aligns with the investor's risk tolerance and investment horizon is crucial, as small and micro-cap stocks can be significantly affected by market shifts.

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's current risk-return profile suggests there may be opportunities for optimization, particularly in balancing growth objectives with risk management through diversification across asset classes, sectors, and geographies. Employing the Efficient Frontier concept could help in identifying an asset allocation that offers the best possible risk-return trade-off, based on historical performance. However, investors should remember that optimization based on past performance does not guarantee future returns and should align with their risk tolerance and investment horizon.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.60%
  • Avantis® U.S. Equity ETF 1.20%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Weighted yield (per year) 1.92%

The portfolio's overall dividend yield stands at 1.92%, with the International Small Cap Value ETF contributing a higher yield of 3.60%. While the focus on growth stocks often means lower dividend yields, these payments can provide a steady income stream and contribute to total returns, especially in volatile or down markets. Investors should consider the role of dividends in their overall investment strategy and whether a higher yield allocation might suit their income needs.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Equity ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Weighted costs total (per year) 0.23%

The portfolio's total expense ratio (TER) of 0.23% is relatively low, which is beneficial for long-term growth as lower costs translate directly into higher net returns. Keeping costs low is a critical component of successful investing, especially important for portfolios focused on segments like small-cap and value stocks, where the expense ratios can vary significantly. Continually monitoring and managing these costs will be crucial in maximizing returns.

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