A value tilted globally diversified stock portfolio with modest bonds and strong long term growth focus

Report created on Nov 7, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

5/5
Highly Diversified
Less diversification More diversification

Positions

The portfolio is almost fully invested in stocks, with 95% in equities and 5% in long duration bonds. Within stocks, there is a clear tilt toward value and smaller companies layered on top of a broad large cap index position. For a “balanced” risk profile, this is more growth‑oriented than usual, as many balanced portfolios might hold 40–60% in bonds. That higher stock share raises both growth potential and volatility. Someone using this mix could consider keeping enough cash outside the portfolio for emergencies and near‑term needs so they are not forced to sell during downturns, letting this equity‑heavy structure work over a longer time frame.

Growth Info

Using the reported CAGR of 11.62%, a hypothetical $10,000 invested over 10 years would have grown to roughly $30,000, assuming the return stayed similar each year. CAGR, or Compound Annual Growth Rate, is like averaging your speed on a long road trip: it smooths out ups and downs into a single annual number. The max drawdown of about -23% shows that, at worst, this mix has historically dropped roughly a quarter from a peak, which is normal for an equity‑heavy allocation. While these results are strong and align well with equity benchmarks, it’s important to remember that past performance does not guarantee future results.

Projection Info

The Monte Carlo analysis uses 1,000 simulations of possible future paths based mainly on historical behavior, like running many “what if” market scenarios. The median outcome of about +193% suggests a typical path might roughly triple capital over the chosen horizon, while the 5th percentile at -13.5% reminds that a poor sequence of returns can still leave you behind. The average simulated annualized return of 9.86% is slightly lower than historical CAGR, which is a healthy, conservative expectation. Monte Carlo models cannot foresee new shocks or regime changes, but they do give a sense of the range of plausible outcomes and the chance of staying invested through volatility.

Asset classes Info

  • Stocks
    95%
  • Bonds
    5%

Asset class mix is a standout feature: 95% stock and 5% bonds. Many balanced portfolios are closer to 60% stock and 40% bonds, so this setup is more like an aggressive growth profile with a small stabilizer. The good news is that this high equity share aligns with long‑term wealth building and makes good use of global diversification. The flip side is that drawdowns can be deep and emotionally challenging. If someone wanted smoother rides, they could shift a bit more toward defensive assets over time, matching the mix to real‑world needs like retirement dates, big purchases, or known spending milestones.

Sectors Info

  • Financials
    19%
  • Technology
    15%
  • Industrials
    14%
  • Consumer Discretionary
    14%
  • Energy
    9%
  • Basic Materials
    7%
  • Telecommunications
    6%
  • Health Care
    5%
  • Consumer Staples
    4%
  • Utilities
    1%
  • Real Estate
    1%

Sector exposure is nicely spread: financials, technology, industrials, and consumer cyclicals together make up a large share, with meaningful but smaller slices in energy, basic materials, communication services, healthcare, and consumer defensive. This broad exposure closely resembles diversified equity benchmarks, which is a strong indicator of sector diversification. The value and small‑cap tilt can increase exposure to economically sensitive areas like financials and industrials, which may do well in recoveries but can be hit harder in recessions or rate shocks. A simple check‑in every year or two to see whether any sector unintentionally grows into an outsized weight can help keep risk aligned with comfort levels.

Regions Info

  • North America
    63%
  • Europe Developed
    12%
  • Japan
    7%
  • Asia Emerging
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, about 63% sits in North America with the rest spread across developed Europe, Japan, other developed Asia, emerging Asia, Latin America, and smaller allocations to Africa and the Middle East. This pattern is reasonably close to global market weights and aligns well with common world equity benchmarks, which is a big positive for diversification. It reduces dependence on any single region’s economy or political environment. At the same time, the U.S. remains the anchor, which has historically been beneficial but may not always lead. Keeping this roughly global mix and resisting the urge to chase recent regional winners can help smooth out long‑term outcomes.

Market capitalization Info

  • Mid-cap
    23%
  • Large-cap
    21%
  • Mega-cap
    20%
  • Small-cap
    18%
  • Micro-cap
    12%

Market capitalization exposure is impressively balanced: meaningful chunks in mega, big, medium, small, and even micro caps. This is quite different from many portfolios that are dominated by mega and large companies only. Smaller and value‑oriented firms can offer higher expected returns but are bumpier along the way, so this spread fits a growth‑seeking but volatility‑tolerant mindset. This allocation also helps avoid over‑reliance on a handful of giant companies. As markets evolve, it can be helpful to periodically confirm that the tilt toward smaller and value names still fits one’s comfort with swings and that the overall size mix hasn’t drifted too far from the intended design.

Redundant positions Info

  • Avantis International Large Cap
    Avantis® International Small Cap Value ETF
    High correlation

Several holdings are highly correlated, especially the international large and small value funds that tend to move in similar directions when global value stocks rise or fall. Correlation is a measure of how often assets move together; if they usually move the same way, they don’t add much shock absorption during downturns. While overlapping exposure isn’t bad—this setup clearly tilts intentionally toward value—it can mean complexity without much extra diversification. If simplification became a goal, one could consider trimming overlapping pieces while keeping the desired regional and size tilts, aiming to preserve the strategy but with fewer moving parts and easier ongoing monitoring.

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 chart called the Efficient Frontier, this portfolio would likely sit in the higher risk, higher return zone because of the heavy equity and factor tilts. The Efficient Frontier represents combinations of these existing holdings that offer the best trade‑off between volatility and expected return, not necessarily the most diversification or lowest drawdown. Before fine‑tuning weights, it could be useful to address overlapping, highly correlated international value positions that don’t add much diversification. Then, by modestly shifting between the equity sleeve and the long‑duration bonds, or between broad and tilted equity funds, the mix might move closer to the most “efficient” point for the chosen risk level.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis International Large Cap 2.50%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.40%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 4.90%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 2.14%

The portfolio’s total yield around 2.14% comes from a mix of moderate stock dividends and the relatively high yield on the long‑duration Treasury fund. Value and international funds provide some of the stronger yields, while growth‑oriented U.S. stocks contribute less. A yield a bit above broad market averages can be helpful for investors who like a modest cash flow, but this mix is still primarily a growth engine rather than an income machine. Dividends can cushion returns in flat markets, yet they can fluctuate as companies change policies. Anyone depending on this income should keep a buffer outside the portfolio for stable near‑term cash needs.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® Emerging Markets Value ETF 0.36%
  • Avantis International Large Cap 0.25%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Extended Duration Treasury Index Fund ETF Shares 0.06%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.20%

With an overall expense ratio around 0.20%, costs are impressively low for an actively tilted, factor‑style approach. Fees act like a slow leak in a tire; the less air you lose each year, the farther you travel over decades. This TER compares favorably with many actively managed strategies and stays close to low‑cost index territory, which supports better long‑term performance. Since the largest allocations sit in reasonably priced funds, there isn’t an obvious cost issue here. Periodically checking whether any holding becomes a cost outlier and favoring cheaper, similar alternatives when they exist can keep the fee drag minimized without changing the overall strategy.

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