A growth focused equity portfolio with strong diversification and a tilt toward small cap value

Report created on Aug 11, 2024

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 almost entirely in stocks, split between broad market index funds and small cap value tilts. With roughly half in a total US market fund, a fifth in total international, and the rest in US and international small cap value, the structure leans clearly toward growth-oriented equities. Compared with a typical blended benchmark that might include a sizable bond allocation, this setup is more aggressive and more equity heavy. That matters because higher stock exposure can mean higher long-term growth but also deeper short-term drops. Someone using this mix might keep it as a core growth engine, paired with separate safer assets if they want to temper volatility.

Growth Info

Historically, this mix shows a very strong compound annual growth rate (CAGR) of about 15.3%. CAGR is just the “average speed” your money grew per year, smoothing out bumps. For example, a $10,000 starting amount growing at that rate for 10 years would have ended many times higher than the original investment. The max drawdown near -37% shows that during rough markets, the portfolio could temporarily lose more than a third of its value. This pattern is common for equity-heavy setups and still broadly lines up with growth benchmarks, suggesting solid long-term behavior for the level of risk taken.

Projection Info

Forward projections here use Monte Carlo simulation, which runs many what-if scenarios based on historical patterns of returns and volatility. In simple terms, it rolls the dice 1,000 times using past-like conditions to see a range of possible futures. The median outcome above 500% growth and annualized simulated return over 16% point to very optimistic ranges, though these are not guarantees. The 5th percentile ending around 52% growth highlights that weaker paths are still possible. Since simulations rely on past data and certain assumptions, they can’t predict new crises or regime shifts, but they are still useful to gauge the possible spread of outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

With 99% in stocks and 1% in cash, the asset class mix is sharply tilted toward growth. Compared with a common diversified benchmark that might hold 20–40% in bonds or other defensive assets, this design chooses return potential over downside cushioning. This is great for someone with a long horizon and strong stomach for swings, but it can be uncomfortable during big market drops. Broad stock exposure across many companies still gives internal diversification, which is a big plus. If stability or short-term spending needs ever become more important, adding a modest slice of defensive assets in a separate bucket could smooth the ride.

Sectors Info

  • Technology
    22%
  • Financials
    17%
  • Industrials
    14%
  • Consumer Discretionary
    13%
  • Health Care
    7%
  • Telecommunications
    7%
  • Energy
    6%
  • Basic Materials
    6%
  • Consumer Staples
    4%
  • Real Estate
    2%
  • Utilities
    2%

Sector exposure is nicely spread: technology leads, followed by financials, industrials, consumer cyclicals, and meaningful positions in healthcare, energy, and others. This looks reasonably close to global equity benchmarks, which is a strong indicator of healthy diversification. A tech and consumer tilt can boost returns in growth-friendly environments but may wobble more when interest rates rise or when economic growth slows. Having 11 sectors represented above a small threshold helps reduce the impact of any single industry shock. Keeping this broad sector balance over time, rather than chasing hot areas, usually supports more stable long-term outcomes.

Regions Info

  • North America
    68%
  • Europe Developed
    13%
  • Japan
    8%
  • Asia Emerging
    3%
  • Asia Developed
    3%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, about two-thirds is in North America, with decent allocations to Europe, Japan, and smaller slices in emerging markets. This is broadly in line with global market-cap benchmarks that are naturally US-heavy, so it’s a very standard, globally diversified equity stance. The modest emerging markets exposure adds some growth potential but avoids going overboard on higher-risk regions. This balanced mix helps reduce the impact if any single country or region struggles for a few years. For someone living in the US, the home bias is reasonable, yet there is still enough international exposure to benefit if non-US markets lead for a stretch.

Market capitalization Info

  • Mega-cap
    30%
  • Mid-cap
    21%
  • Large-cap
    21%
  • Small-cap
    17%
  • Micro-cap
    10%

The market cap breakdown spans mega, large (“big”), mid, small, and even micro caps, which is a real strength. Many benchmarks lean heavily into mega and large caps; this setup adds deliberate exposure to smaller companies and value-tilted names. Smaller stocks can be more volatile day to day but historically have sometimes offered higher long-run return potential. This blend of sizes helps reduce reliance on a handful of giant firms and spreads growth drivers across the corporate spectrum. For someone okay with extra variability, maintaining this small-cap tilt can be a powerful way to pursue higher expected long-term returns.

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.

On a risk–return basis, this portfolio sits on the aggressive side of the “Efficient Frontier” for all-equity mixes. The Efficient Frontier is just the set of allocations that give the best possible tradeoff between risk and return using the existing building blocks. Within just these four funds, shifting weights slightly among broad market and small cap value positions might nudge efficiency, but the current setup already balances broad exposure with targeted tilts nicely. Efficiency here does not mean maximum diversification or lowest volatility, only the best ratio of expected return for the risk level chosen within these components.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.82%

The overall dividend yield around 1.8% is modest but healthy for a growth-focused equity portfolio. Dividend yield is simply the cash payout investors receive each year as a percentage of the portfolio’s value. Higher yields from the international and small cap value holdings nicely complement the lower yields from broad US stocks. This mix suggests most of the long-term return is expected from price growth, not income, which fits a growth profile well. For someone not relying on the portfolio for current spending, reinvesting dividends over time can significantly boost compounding. For future income goals, yield-targeted tweaks could be considered later.

Ongoing product costs Info

  • 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) 0.12%

The total expense ratio (TER) of about 0.12% is impressively low, especially given the inclusion of more specialized small cap value strategies. TER is the ongoing annual fee charged by funds. Keeping fees this low means more of the portfolio’s return stays in your pocket, which compounds significantly over the years. The large positions in ultra-low-cost index ETFs offset the higher costs of the small cap value funds, which is a smart structure. This cost profile is clearly aligned with best practices and supports better long-term performance without needing any drastic changes on the fee side.

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