Optimizing a growth-focused portfolio with a strong tilt towards small-cap value ETFs

Report created on Nov 2, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily weighted towards small-cap value ETFs, with a significant 70% allocation to international small-cap value and 20% to U.S. small-cap value, supplemented by a 10% allocation to a broad-market S&P 500 ETF. This composition underscores a strategic focus on growth through small-cap value stocks, which historically offer higher return potential albeit with increased volatility. The portfolio's diversification across sectors and geographies, with a notable absence of bonds or alternative asset classes, positions it firmly within a growth-oriented risk profile.

Growth Info

With a Compound Annual Growth Rate (CAGR) of 15.27% and a maximum drawdown of -43.02%, the portfolio demonstrates robust historical performance, indicative of high growth potential balanced by significant volatility. The days contributing most to returns highlight the portfolio's susceptibility to short-term market movements, emphasizing the importance of a long-term investment horizon to mitigate the impact of volatility.

Projection Info

Monte Carlo simulations, which forecast potential outcomes based on historical data, suggest a wide range of possible future performances for this portfolio. With 985 out of 1,000 simulations showing positive returns and a median projected growth of 637.1%, the analysis supports the portfolio's strong growth potential. However, the significant spread between the 5th and 67th percentiles underscores the inherent risk and uncertainty in these projections.

Asset classes Info

  • Stocks
    100%

The portfolio's allocation is exclusively in stocks, reflecting a high-risk, high-reward strategy suitable for growth-focused investors. This singular focus on equities, particularly within small-cap value segments, amplifies both potential returns and volatility, making it crucial for investors to have a high risk tolerance and a long-term investment horizon.

Sectors Info

  • Industrials
    21%
  • Financials
    18%
  • Consumer Discretionary
    16%
  • Basic Materials
    16%
  • Energy
    10%
  • Technology
    8%
  • Consumer Staples
    4%
  • Health Care
    3%
  • Telecommunications
    3%
  • Utilities
    1%
  • Real Estate
    1%

Sectoral allocation highlights a preference for industrials, financial services, consumer cyclicals, and basic materials, which collectively form the majority of the portfolio. This sectoral spread suggests a strategic bet on economic recovery and growth sectors, which can offer significant returns during market upswings but may also be more volatile during downturns.

Regions Info

  • North America
    38%
  • Europe Developed
    24%
  • Japan
    24%
  • Australasia
    7%
  • Africa/Middle East
    3%
  • Asia Developed
    2%
  • Asia Emerging
    1%

Geographic diversification is broad, with significant exposures to North America, Europe, and Japan. This wide geographic spread helps mitigate risks associated with regional economic downturns or geopolitical events. However, the minimal exposure to emerging markets may limit potential high-growth opportunities available in these regions.

Market capitalization Info

  • Mid-cap
    39%
  • Small-cap
    34%
  • Micro-cap
    12%
  • Mega-cap
    5%
  • Large-cap
    4%

The portfolio's focus on medium, small, and micro-cap stocks aligns with its growth-oriented strategy, aiming to capitalize on the higher growth potential of smaller companies. While this approach can yield substantial returns, it also carries higher risk due to the increased volatility and lower liquidity of smaller firms.

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 expected return is slightly below the optimal level suggested by Efficient Frontier analysis, which indicates a potential for risk-return optimization without increasing the risk level. Adjusting the asset allocation could align the portfolio closer to the Efficient Frontier, potentially enhancing returns for the same level of risk.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.40%
  • Avantis® U.S. Small Cap Value ETF 1.70%
  • SPDR® Portfolio S&P 500 ETF 1.10%
  • Weighted yield (per year) 2.83%

The portfolio's average dividend yield of 2.83% contributes to its total return, with the international small-cap value ETF offering a notably higher yield. While dividends provide a steady income stream, the primary focus of this portfolio appears to be capital appreciation through value investing in small-cap stocks.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.30%

With an average Total Expense Ratio (TER) of 0.30%, the portfolio's costs are relatively low, especially considering the specialized nature of the small-cap value ETFs. Keeping costs low is crucial for enhancing long-term returns, as even small percentage differences can significantly impact compounded growth over time.

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