Factor driven equity portfolio with strong momentum tilt and solid diversification across regions and sectors
Report created on Mar 18, 2026Risk profile
4/7
Diversification profile
3/5
Positions
-
ID Invesco S&P International Developed Momentum ETF
IDMO - US46138E2220 30.00% -
SP Invesco S&P 500® Momentum ETF
SPMO - US46138E3392 30.00% -
AV American Century ETF Trust
AVGV - US0250722164 20.00% -
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 20.00%
The portfolio is built entirely from four equity ETFs, with 100% in stocks and no bonds or cash. Two momentum-focused ETFs make up 60% of the allocation, while a large-cap growth ETF and a diversified equity ETF each hold 20%. This creates a concentrated style exposure but spreads it across different index providers and universes. A fully equity structure matters because it ties results closely to stock market cycles, without the cushion that bonds or cash can provide. For someone targeting growth, this setup can be powerful, but it also means larger swings. The key takeaway is that return potential is high, yet short‑term volatility must be acceptable.
Growth
Historically, the portfolio shows a very strong compound annual growth rate (CAGR) of 24.26%, far above what broad equity benchmarks have typically delivered. CAGR is like your average speed on a long road trip, smoothing out the bumps along the way. The max drawdown of -17.33% means the worst peak‑to‑trough decline was moderate for an all‑equity mix, suggesting past volatility was relatively controlled. Only 24 days made up 90% of returns, highlighting how a small number of big up days drove much of the growth. This pattern is typical of momentum and growth tilts: impressive long‑term compounding, but heavily reliant on staying invested during sharp market rallies.
Projection
The forward projection uses Monte Carlo simulation, which runs 1,000 what‑if scenarios based on historical return and volatility patterns. Think of it as rolling the dice many times using past data to see a range of possible futures, not a single forecast. The median outcome reaches about 2,292% of today’s value, with the 5th percentile still at 722.4% and the 67th at 3,095.5%. The average simulated annual return of 26.42% is extremely high and heavily dependent on the historical sample used. The important caveat is that markets rarely repeat perfectly; these simulations show possibilities, not promises, and actual results could be much lower, especially if conditions change.
Asset classes
- Stocks 100%
All of the portfolio sits in the stock asset class, with 0% in bonds, cash, or alternatives. Asset classes are broad buckets like stocks, bonds, and real estate that respond differently to economic shifts. A 100% equity allocation leans fully into growth and usually outperforms more balanced mixes over very long horizons, but at the cost of sharper drawdowns during market stress. Compared with a classic balanced mix that blends stocks and bonds, this portfolio accepts significantly more volatility. This structure can make sense when the goal is long‑term capital growth and interim ups‑and‑downs are tolerable, but it is less aligned with short‑term spending needs or very low‑risk preferences.
Sectors
- Financials 26%
- Technology 22%
- Industrials 14%
- Telecommunications 10%
- Consumer Discretionary 8%
- Consumer Staples 6%
- Energy 4%
- Health Care 4%
- Basic Materials 3%
- Utilities 3%
- Real Estate 1%
Sector exposure is fairly broad, with meaningful allocations across financial services (26%), technology (22%), industrials (14%), communication services (10%), and several consumer sectors. Healthcare, energy, basic materials, utilities, and real estate are all present, though in smaller weights. This spread across 10+ sectors is a strong sign of diversification, even though there is a mild emphasis on financials and tech. Sector mix matters because different parts of the economy lead at different times; momentum and growth themes can cause certain sectors to dominate during bull markets. The composition here aligns well with modern equity benchmarks, which is beneficial for balancing growth exposure with reasonable sector breadth.
Regions
- North America 69%
- Europe Developed 20%
- Japan 3%
- Asia Developed 3%
- Australasia 2%
- Africa/Middle East 2%
- Asia Emerging 1%
Geographically, the portfolio is anchored in North America at 69%, with additional exposure to developed Europe (20%), Japan (3%), other developed Asia (3%), Australasia (2%), Africa/Middle East (2%), and a small slice of emerging Asia (1%). This leans more toward North America than a typical global index but still includes a substantial international developed component. Geography matters because regional economies, currencies, and policies can behave differently, creating diversification benefits. This allocation is well‑balanced and aligns closely with global standards, while keeping a home‑bias toward the U.S. For many investors, that mix offers a comfortable blend of familiar markets and international diversification.
Market capitalization
- Mega-cap 46%
- Large-cap 34%
- Mid-cap 14%
- Small-cap 4%
- Micro-cap 2%
Market capitalization exposure is tilted to the largest companies, with 46% in mega caps and 34% in big caps, plus 14% medium, 4% small, and 2% micro caps. Market cap is simply company size in the stock market, and larger firms tend to be more stable and widely researched, while smaller firms can be more volatile but sometimes faster‑growing. This profile closely resembles major market indices, which are dominated by the world’s biggest companies. The modest allocation to smaller caps adds some diversification without dramatically increasing risk. Overall, this is a mainstream, large‑cap‑oriented structure that should behave similarly to broad equity markets, while still allowing some participation in smaller, more dynamic names.
True holdings
-
NV NVIDIA Corporation 5.11%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
AV Broadcom Inc 3.64%
Part of fund(s):- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
ME Meta Platforms Inc. 3.36%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
AA Apple Inc 2.14%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Schwab U.S. Large-Cap Growth ETF
-
JP JPMorgan Chase & Co 1.66%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Invesco S&P 500® Momentum ETF
-
MS Microsoft Corporation 1.56%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Schwab U.S. Large-Cap Growth ETF
-
PL Palantir Technologies Inc. 1.47%
Part of fund(s):- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
NF Netflix Inc 1.47%
Part of fund(s):- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
V Visa Inc. Class A 1.36%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Invesco S&P 500® Momentum ETF
- Schwab U.S. Large-Cap Growth ETF
-
WM Walmart Inc. Common Stock 1.34%
Part of fund(s):- American Century ETF Trust
- American Century ETF Trust - Avantis U.S. Large Cap Value ETF
- Invesco S&P 500® Momentum ETF
- Top 10 total 23.13%
Looking through the ETFs, the largest indirect exposures include NVIDIA, Broadcom, Meta, Apple, JPMorgan, Microsoft, and other well‑known blue chips. NVIDIA alone accounts for about 5.11% of the total portfolio through overlapping ETF positions, with several other names above 1%. This overlap means that, even though there are only four ETFs, there is hidden concentration in a handful of large companies, especially in tech and financials. Overlap matters because if a few of these big holdings stumble, multiple ETFs may be hit at once. A practical insight is simply to recognize that diversification across funds does not always equal diversification across underlying companies.
Factors
Factor exposure shows strong tilts to momentum (56.9%) and low volatility (57.5%), with moderate value (25%) and size (20%), but no clear read on quality or yield due to limited data coverage. Factors are like underlying personality traits of stocks—momentum favors recent winners, low volatility prefers steadier names, value tilts toward cheaper companies, and size captures smaller firms. A dominant momentum tilt can enhance returns in trending markets but may suffer when trends abruptly reverse. The strong low‑volatility exposure helps counterbalance that by favoring more stable stocks, which can soften drawdowns. Compared to a neutral market‑weighted baseline, this blend suggests a deliberate focus on performance with some built‑in risk dampening, which is an appealing combination.
Risk contribution
-
Invesco S&P 500® Momentum ETF
Weight: 30.00% 33.8% -
Invesco S&P International Developed Momentum ETF
Weight: 30.00% 27.1% -
Schwab U.S. Large-Cap Growth ETF
Weight: 20.00% 22.6% -
American Century ETF Trust
Weight: 20.00% 16.5%
Risk contribution shows how much each ETF drives overall ups and downs, which often differs from simple weights. The Invesco S&P 500 Momentum ETF is 30% of the portfolio but contributes 33.8% of risk, while the Schwab Large‑Cap Growth ETF at 20% contributes 22.63%. In contrast, the international momentum ETF and the American Century ETF contribute slightly less risk than their weights. With the top three holdings driving 83.51% of total risk, the risk footprint is somewhat concentrated in U.S. momentum and growth. Risk contribution works like an orchestra: a single loud instrument can dominate the sound. Tuning position sizes over time can help keep any one fund from overwhelming the overall risk profile.
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.
Risk‑return optimization compares the current mix to an “efficient frontier,” which shows the best possible return for each risk level using these same holdings in different weights. The optimal portfolio on that curve has the highest Sharpe ratio, meaning the most return per unit of volatility. While specific points aren’t given, the balanced risk contributions and factor tilts suggest the current allocation is reasonably efficient but might still sit slightly below the frontier. If so, reweighting among the four ETFs—without adding anything new—could potentially nudge returns higher for the same risk or reduce volatility without sacrificing return. Periodically checking this alignment helps keep the portfolio’s risk‑return tradeoff sharp and intentional.
Dividends
- American Century ETF Trust 2.10%
- Invesco S&P International Developed Momentum ETF 3.70%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Invesco S&P 500® Momentum ETF 0.70%
- Weighted yield (per year) 1.82%
The portfolio’s total dividend yield is about 1.82%, with the international momentum ETF providing the highest yield at 3.70%, and the growth and U.S. momentum funds yielding under 1%. Dividend yield represents the annual cash payments from holdings as a percentage of the current portfolio value. For an equity‑heavy, growth‑oriented mix, a sub‑2% yield is very much in line with expectations, as the focus is more on price appreciation than income. This setup is well‑suited to reinvesting dividends to compound over time rather than relying on them for living expenses. If income becomes a bigger priority later, shifting toward higher‑yielding equity or adding income‑oriented assets could be considered.
Ongoing product costs
- American Century ETF Trust 0.26%
- Invesco S&P International Developed Momentum ETF 0.25%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Invesco S&P 500® Momentum ETF 0.13%
- Weighted costs total (per year) 0.17%
Weighted average costs are impressively low at a total expense ratio (TER) of about 0.17%. TER is the annual fee charged by funds, quietly deducted from returns, so even small differences compound over decades. The Schwab U.S. Large‑Cap Growth ETF is especially cheap at 0.04%, and the other ETFs are all under 0.30%, which is very competitive for specialized strategies like momentum and actively managed equity. Keeping costs this low strongly supports better long‑term performance, because more of the market’s return stays in the portfolio instead of going to fees. This area is a real strength and already aligned with best practices for cost‑conscious investing.
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