A growth-focused portfolio with a heavy tilt towards US small-cap value stocks

Report created on May 3, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

2/5
Low Diversity
Less diversification More diversification

Positions

This portfolio is heavily weighted towards the Avantis® U.S. Small Cap Value ETF, making up 80% of the allocation, with the remaining 20% in the SPDR® Portfolio S&P 500 ETF. This composition suggests a strong growth orientation, leaning significantly towards small-cap value stocks. The dominance of a single asset class (stocks) indicates low diversification, with a complete absence of bonds, commodities, or alternative investments.

Growth Info

Historical performance showcases a Compound Annual Growth Rate (CAGR) of 15.60%, which is impressive. However, the maximum drawdown of -45.63% underscores the high-risk nature of this portfolio. The days contributing to 90% of returns being so few suggests that the portfolio's performance is heavily reliant on short, sharp gains, a characteristic of volatile small-cap investments.

Projection Info

The Monte Carlo simulation, with 1,000 runs, offers a wide range of potential outcomes, indicating a significant level of uncertainty. With a median projected return of 480.1% and a high percentile of simulations yielding positive returns, the forward-looking scenario seems optimistic. Yet, the wide spread between the 5th and 67th percentiles highlights the risk of substantial variability in returns.

Asset classes Info

  • Stocks
    100%

The portfolio's asset allocation is entirely in stocks, with no diversification into other asset classes like bonds or real estate. This approach maximizes potential growth but also increases volatility and risk, especially during market downturns. The absence of cash or fixed-income assets means there's little to buffer against stock market volatility.

Sectors Info

  • Financials
    27%
  • Consumer Discretionary
    15%
  • Industrials
    15%
  • Technology
    12%
  • Energy
    11%
  • Consumer Staples
    6%
  • Basic Materials
    5%
  • Health Care
    4%
  • Telecommunications
    4%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocation is diversified across financial services, consumer cyclicals, industrials, and technology, among others. This spread can provide some balance; however, the heavy focus on financial services and cyclic sectors could lead to higher volatility in response to economic cycles. The minimal exposure to defensive sectors like healthcare and utilities may limit the portfolio's resilience during market downturns.

Regions Info

  • North America
    98%
  • Latin America
    1%

With 98% of assets in North America, the portfolio has a strong domestic focus, limiting exposure to international growth opportunities and diversification benefits. The negligible allocation to Latin America and complete absence of exposure to developed Europe, Asia, and emerging markets increases the portfolio's susceptibility to regional economic conditions in North America.

Market capitalization Info

  • Small-cap
    40%
  • Micro-cap
    38%
  • Mega-cap
    9%
  • Large-cap
    7%
  • Mid-cap
    5%

The portfolio's emphasis on small and micro-cap stocks (78% combined) targets high growth potential but comes with increased risk and volatility. The limited exposure to mega and big-cap stocks (16% combined) means the portfolio may miss out on the stability and potential dividends these larger companies often provide.

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.

Considering the portfolio's high risk and low diversification score, there's room for optimization towards achieving a better risk-return ratio. Utilizing the Efficient Frontier could identify a more diversified asset allocation that potentially offers similar returns with reduced volatility. However, any optimization should align with the investor's growth objectives and risk tolerance.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.90%
  • SPDR® Portfolio S&P 500 ETF 1.30%
  • Weighted yield (per year) 1.78%

The dividend yields from the two ETFs contribute to the portfolio's total yield of 1.78%. While dividends provide a steady income stream and can help mitigate some volatility, the primary focus on growth through capital appreciation means dividends play a secondary role in the portfolio's overall return strategy.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • SPDR® Portfolio S&P 500 ETF 0.02%
  • Weighted costs total (per year) 0.20%

The portfolio's total expense ratio (TER) of 0.20% is relatively low, which is beneficial for long-term growth as lower costs mean more of the investment returns are retained. The extremely low cost of the SPDR® Portfolio S&P 500 ETF helps offset the higher cost of the small-cap ETF, maintaining overall cost efficiency.

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