A growth-focused portfolio with strong U.S. bias and small-cap value exposure

Report created on Mar 3, 2025

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is primarily composed of three ETFs, with 50% in the Vanguard S&P 500 ETF, 30% in the Vanguard Total International Stock Index Fund ETF, and 20% in the Avantis U.S. Small Cap Value ETF. This allocation provides a strong foundation in large-cap U.S. equities, complemented by international diversification and a focus on small-cap value stocks. Compared to typical benchmarks, this portfolio leans heavily on U.S. equities, which can be beneficial in a growing U.S. market but may expose the investor to regional risks. Consider whether this weighting aligns with your investment goals and risk tolerance.

Growth Info

Historically, the portfolio has shown robust performance, achieving a Compound Annual Growth Rate (CAGR) of 14.19%. This indicates that the portfolio has grown significantly over time, outperforming many standard benchmarks. However, it also experienced a maximum drawdown of -36.46%, highlighting potential vulnerability during market downturns. While past performance is not indicative of future results, understanding these trends can help set realistic expectations. Regularly reviewing performance against personal benchmarks can ensure alignment with your financial objectives.

Projection Info

Forward projections using Monte Carlo simulations suggest a wide range of potential outcomes, with an average annualized return of 15.12%. Monte Carlo simulations use historical data to estimate future performance by running thousands of hypothetical scenarios. While they offer valuable insights, it's crucial to remember that these projections are not guarantees. The portfolio shows a strong likelihood of positive returns, but it's important to prepare for variability. Regularly assess your risk tolerance and investment horizon to ensure they match your long-term goals.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's asset class allocation is heavily weighted towards equities, with 99% in stocks and a minimal 1% in cash. This concentration reflects a growth-oriented strategy, aiming for capital appreciation. While equities offer higher potential returns, they also come with increased volatility. Diversifying across asset classes can help mitigate risk. Consider whether adding fixed income or alternative assets aligns with your risk tolerance and investment objectives. Balancing growth with stability can enhance overall portfolio resilience.

Sectors Info

  • Technology
    22%
  • Financials
    19%
  • Consumer Discretionary
    12%
  • Industrials
    12%
  • Health Care
    8%
  • Telecommunications
    7%
  • Energy
    6%
  • Consumer Staples
    6%
  • Basic Materials
    4%
  • Utilities
    2%
  • Real Estate
    2%

The portfolio is diversified across several sectors, with notable concentrations in Technology (22%) and Financial Services (19%). These sectors are key drivers of economic growth but can also be volatile, particularly during economic shifts or interest rate changes. Compared to common benchmarks, the sector allocation is well-distributed, which helps mitigate sector-specific risks. It's essential to monitor sector trends and adjust allocations as needed to maintain a balanced risk profile. Regularly reviewing sector performance can ensure alignment with market conditions.

Regions Info

  • North America
    72%
  • Europe Developed
    12%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    3%
  • Australasia
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

Geographically, the portfolio is heavily tilted towards North America, with 72% exposure, followed by Europe Developed at 12%. This U.S.-centric focus can benefit from domestic market growth but may lack diversification benefits from international markets. Compared to global benchmarks, the portfolio underweights emerging markets, which can offer higher growth potential but also increased risk. Consider whether increasing exposure to international markets aligns with your diversification goals and risk tolerance. A more balanced geographic allocation can enhance resilience against regional downturns.

Market capitalization Info

  • Mega-cap
    37%
  • Large-cap
    27%
  • Mid-cap
    15%
  • Small-cap
    12%
  • Micro-cap
    9%

The portfolio's market capitalization breakdown is weighted towards large-cap stocks, with 37% in mega and 27% in big companies. This focus provides stability and lower volatility, as large-cap stocks tend to be more established. However, the inclusion of small-cap (12%) and micro-cap (9%) stocks adds growth potential, reflecting a willingness to take on more risk for higher returns. This diversification across market caps can help balance risk and reward. Regularly assess whether this mix aligns with your investment strategy and risk appetite.

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.

The portfolio's current asset allocation can be optimized using the Efficient Frontier, which helps identify the best possible risk-return ratio. This strategy involves adjusting the weights of existing assets to maximize returns for a given level of risk. While the portfolio is already well-structured, exploring optimization can uncover opportunities for improvement. It's important to note that optimization focuses on risk-return efficiency, not necessarily achieving specific diversification goals. Regularly reassessing your portfolio's efficiency can ensure alignment with financial objectives.

Dividends Info

  • Avantis® U.S. Small Cap Value ETF 1.70%
  • Vanguard S&P 500 ETF 1.20%
  • Vanguard Total International Stock Index Fund ETF Shares 3.20%
  • Weighted yield (per year) 1.90%

The portfolio's dividend yield stands at 1.90%, with the Vanguard Total International Stock Index Fund ETF Shares contributing the highest yield at 3.20%. Dividends provide a steady income stream, which can be reinvested to compound returns over time. For growth-focused investors, dividends may play a secondary role, but they still offer value, particularly during market downturns. Consider how dividend income aligns with your cash flow needs and reinvestment strategy. Balancing growth and income can enhance long-term wealth accumulation.

Ongoing product costs Info

  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard S&P 500 ETF 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.08%
  • Weighted costs total (per year) 0.09%

The portfolio's total expense ratio (TER) is impressively low at 0.09%, with the Vanguard S&P 500 ETF having the lowest cost at 0.03%. Keeping costs low is crucial for maximizing long-term returns, as high fees can erode gains over time. This cost efficiency aligns well with best practices for portfolio management, ensuring more of your money is working for you. Regularly reviewing and minimizing costs can enhance overall performance. Consider whether any adjustments are needed to maintain cost-effectiveness.

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