A high growth tilted portfolio mixing broad market exposure small value and dividend factors
Report created on Nov 13, 2024Risk profile
5/7
Diversification profile
3/5
Positions
-
VT Vanguard Total Stock Market Index Fund ETF Shares
VTI - US9229087690 40.00% -
AV Avantis® International Small Cap Value ETF
AVDV - US0250728021 20.00% -
AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 20.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 20.00%
The portfolio is built from four stock ETFs, with 40% in a broad total market fund, 40% in small cap value tilts, and 20% in a dividend-focused fund. This structure leans clearly toward growth and factor tilts rather than plain market matching. That matters because small value and dividend strategies can behave differently from the overall market, sometimes outperforming but also swinging more. Overall, this allocation is well-balanced and aligns closely with global standards for a growth profile. To refine things further, it could help to decide whether the current 40/40/20 split between broad market, small value, and dividends is intentional or if you’d prefer a simpler core-plus-satellite split.
Growth
With a historical Compound Annual Growth Rate (CAGR) of 15.62%, a hypothetical $10,000 invested would have grown aggressively over the test period. CAGR is like calculating the average speed of a long road trip: it smooths out ups and downs and shows the “typical” yearly growth. Against common equity benchmarks, this level of return is strong and suggests the factor tilts have been rewarded. However, the max drawdown of -38.19% shows the portfolio can still fall very sharply in bad markets. Because past performance does not guarantee future results, it’s useful to treat these numbers as a rough weather report rather than a precise forecast.
Projection
The Monte Carlo analysis used 1,000 simulations to estimate future outcomes based on historical patterns. Monte Carlo is basically a “what if” engine: it shuffles and replays return scenarios to see a range of possible futures. Here, the median (50th percentile) scenario suggests roughly a 5.5x growth, while the downside 5th percentile still shows a loss but not a wipeout. The fact that 988 out of 1,000 simulations were positive and the average simulated annualized return is 16.47% is encouraging. Still, simulations can’t predict new crises or structural changes, so this should be viewed as a ballpark of potential, not a promise.
Asset classes
- Stocks 100%
All investable assets are currently in stocks, with 0% in cash or other asset classes. This creates a pure equity profile, which is totally aligned with a growth orientation but can lead to large swings in portfolio value. Compared with more diversified blends that might include bonds or alternatives, this setup maximizes long-term return potential at the cost of higher short-term volatility. For someone with a long horizon and strong stomach for market drops, this can work very well. For anyone uneasy with big declines, adding even a modest cushion of lower-volatility assets could help smooth the ride without completely changing the growth focus.
Sectors
- Technology 18%
- Financials 15%
- Industrials 14%
- Consumer Discretionary 13%
- Energy 10%
- Health Care 8%
- Consumer Staples 7%
- Basic Materials 6%
- Telecommunications 6%
- Real Estate 1%
- Utilities 1%
Sector exposure is broad, with meaningful weights in technology, financials, industrials, consumer cyclicals, energy, healthcare, and consumer defensive, plus smaller allocations elsewhere. This sector composition matches benchmark data in many ways, which is a strong indicator of diversification. However, the tilt toward small value and dividends naturally leans a bit more into financials, industrials, and economically sensitive areas, which can shine in recoveries but lag in deep recessions. Tech at 18% is substantial but not extreme, which reduces the risk of being overly dependent on high-growth names during interest rate spikes. Periodically checking whether any single sector drifts far above these levels can keep risk in check.
Regions
- North America 82%
- Europe Developed 8%
- Japan 7%
- Australasia 2%
- Africa/Middle East 1%
- Asia Developed 1%
Geographically, about 82% is in North America, with the rest spread across developed markets in Europe, Japan, and Australasia, plus small allocations elsewhere. This is very similar to common benchmarks for U.S.-based investors and aligns with the global market’s current makeup. The global diversification is solid, though the international exposure is still clearly secondary. That can be beneficial when the U.S. outperforms, as it has in the last decade, but it may mean missed opportunities if other regions lead. For investors who want more balance, gradually increasing non-U.S. exposure could reduce dependence on one country’s economy and currency.
Market capitalization
- Mid-cap 25%
- Large-cap 24%
- Small-cap 21%
- Mega-cap 16%
- Micro-cap 12%
The mix across company sizes is unusually well spread: roughly 16% mega, 24% large, 25% mid, 21% small, and 12% micro caps. This broad coverage is a strength because it captures the entire business spectrum, from global giants to nimble smaller companies. Small and micro caps often carry higher risk and volatility but can provide strong long-term growth; mega and large caps bring more stability. This allocation is well-balanced and aligns closely with global standards for a diversified equity growth strategy. If volatility ever feels too intense, slightly dialing back small and micro exposure could make returns smoother while still keeping a growth tilt.
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 mix likely sits reasonably close to the Efficient Frontier for an all-equity, factor-tilted approach. The Efficient Frontier is the set of portfolios that offer the best possible trade-off between risk and return, assuming only the current ingredients and different weights between them. Efficiency here doesn’t necessarily mean maximum diversification, just the best ratio of expected reward to volatility. Given the strong historical CAGR and moderate but meaningful diversification across size, sector, and geography, the structure looks coherent. Fine-tuning could involve modestly adjusting the balance between total market, small value, and dividend exposure if you want either slightly higher potential growth or slightly smoother returns.
Dividends
- Avantis® International Small Cap Value ETF 3.30%
- Avantis® U.S. Small Cap Value ETF 1.60%
- Schwab U.S. Dividend Equity ETF 2.80%
- Vanguard Total Stock Market Index Fund ETF Shares 1.10%
- Weighted yield (per year) 1.98%
The overall dividend yield of about 1.98% comes from a mix of a high-dividend ETF and more growth-oriented funds. Dividends are cash payments companies make to shareholders, and they can provide a steadier income stream than price gains alone. The dedicated dividend ETF at 2.80% and the international small value fund at 3.30% pull the yield up nicely, while the total market and U.S. small value funds contribute more growth than income. For someone who cares about both growth and a modest cash payout, this balance works well. If income becomes a bigger priority later, increasing the dividend-focused slice could be one way to do it.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Schwab U.S. Dividend Equity ETF 0.06%
- Vanguard Total Stock Market Index Fund ETF Shares 0.03%
- Weighted costs total (per year) 0.15%
The weighted Total Expense Ratio (TER) of about 0.15% is impressively low, especially given the use of active-like factor ETFs. TER is the annual fee charged by the funds, and even small differences compound over decades. Your portfolio’s cost is well below many active strategies, which strongly supports better long-term performance. The broad market ETF at 0.03% and the dividend ETF at 0.06% are extremely efficient, while the Avantis funds remain reasonably priced for their factor exposure. There is no obvious cost bloat here. The main cost focus going forward is simply staying disciplined about using low-fee vehicles whenever you rebalance or add new contributions.
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