A growth-oriented portfolio with a strong tilt towards small-cap value stocks and international diversification
Report created on Jul 26, 2025Risk profile
5/7
Diversification profile
4/5
Positions
-
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 50.00% -
VX Vanguard Total International Stock Index Fund ETF Shares
VXUS - US9219097683 30.00% -
AV Avantis® International Small Cap Value ETF
AVDV - US0250728021 10.00% -
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 10.00%
The portfolio is heavily weighted towards small-cap value stocks, with a 50% allocation to the Avantis® U.S. Small Cap Value ETF and a 10% allocation to the Avantis® International Small Cap Value ETF. The remaining 40% is split between Vanguard's Total International Stock Index Fund ETF Shares (30%) and Total Stock Market Index Fund ETF Shares (10%). This composition suggests a growth-oriented strategy with a focus on value stocks, which historically have provided higher returns but with added volatility. The portfolio is broadly diversified across geographic regions and sectors, albeit with a significant tilt towards North America.
Growth
Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 14.58%, with a maximum drawdown of -42.31%. The drawdown indicates the portfolio's vulnerability during market downturns, typical of growth-oriented strategies with a focus on small-cap stocks. The days contributing to 90% of returns being concentrated in just 14 days highlight the portfolio's reliance on short, significant market movements for gains. This performance, while historically strong, underscores the portfolio's higher risk profile.
Projection
Monte Carlo simulations, based on historical data, project a wide range of outcomes for this portfolio. With 977 out of 1,000 simulations showing positive returns, the median projected growth is impressive at 470.4%. However, the wide range between the 5th percentile (45.2%) and the 67th percentile (730.0%) outcomes underlines the high level of uncertainty and risk associated with this investment strategy. While promising, these projections are based on past data and cannot guarantee future performance.
Asset classes
- Stocks 99%
- Cash 1%
The portfolio's asset allocation is almost entirely in stocks (99%), with a minimal cash holding (1%). This allocation aligns with its growth profile but contributes to higher volatility and risk. Stocks, especially small-cap and value stocks, offer the potential for high returns but can be more susceptible to market fluctuations. Investors should be aware of the risk-return trade-off inherent in such a stock-heavy allocation.
Sectors
- Financials 24%
- Industrials 16%
- Consumer Discretionary 14%
- Technology 11%
- Energy 10%
- Basic Materials 7%
- Consumer Staples 5%
- Health Care 5%
- Telecommunications 4%
- Real Estate 1%
- Utilities 1%
The sector allocation is led by Financial Services (24%), Industrials (16%), and Consumer Cyclicals (14%), followed by Technology (11%) and Energy (10%). This sector spread is indicative of a strategy seeking to capitalize on cyclical and growth sectors, which can offer higher returns during economic expansions but may also face greater declines in downturns. The underrepresentation in more stable sectors like Healthcare and Consumer Defensive suggests a higher risk appetite.
Regions
- North America 62%
- Europe Developed 16%
- Japan 8%
- Asia Emerging 5%
- Asia Developed 3%
- Australasia 2%
- Africa/Middle East 2%
- Latin America 1%
With 62% of assets in North America and significant investments in developed Europe (16%) and Japan (8%), the portfolio is well-diversified geographically but leans heavily towards developed markets. The exposure to emerging markets is limited, which may reduce potential volatility from these regions but also limits exposure to their growth potential. Diversifying further into emerging markets could offer both growth opportunities and additional risk.
Market capitalization
- Small-cap 28%
- Micro-cap 26%
- Mega-cap 17%
- Mid-cap 13%
- Large-cap 12%
The portfolio's focus on small (28%) and micro (26%) cap stocks is clear, with lesser allocations to mega (17%), medium (13%), and big (12%) cap stocks. This tilt towards smaller companies is consistent with a strategy aiming for higher growth potential but comes with increased volatility and risk, as smaller companies are often more sensitive to economic changes and market swings.
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 allocation suggests it is positioned near the Efficient Frontier, aiming for an optimal risk-return balance given its asset mix. However, continuous monitoring and rebalancing are essential to maintain this efficiency, especially considering the portfolio's tilt towards higher-risk small-cap stocks. Adjustments may be needed to adapt to changing market conditions and to ensure alignment with the investor's risk tolerance and investment horizon.
Dividends
- Avantis® International Small Cap Value ETF 3.70%
- Avantis® U.S. Small Cap Value ETF 1.70%
- Vanguard Total Stock Market Index Fund ETF Shares 1.20%
- Vanguard Total International Stock Index Fund ETF Shares 2.80%
- Weighted yield (per year) 2.18%
The portfolio's overall dividend yield is 2.18%, with individual ETF yields ranging from 1.20% to 3.70%. While not the primary focus of a growth-oriented strategy, these dividends can provide a steady income stream and help mitigate volatility. However, the emphasis remains on capital appreciation rather than income generation.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Vanguard Total International Stock Index Fund ETF Shares 0.05%
- Weighted costs total (per year) 0.18%
With a Total Expense Ratio (TER) of 0.18%, the portfolio is cost-efficient, minimizing the drag on returns from management fees. This low cost structure is commendable and supports the portfolio's growth objectives by ensuring that a larger portion of returns is retained by the investor.
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