Concentrated global small cap value portfolio with strong factor tilts and meaningful return swings
Report created on Jul 15, 2026Risk profile
5/7
Diversification profile
3/5
Positions
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AV Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 80.00% -
AV Avantis® International Small Cap Value ETF
AVDV - US0250728021 20.00%
This portfolio is extremely focused: it holds just two equity ETFs, both targeting small cap value companies. Around 80% sits in a US small cap value fund, with the remaining 20% in international small cap value. That means all of the exposure is in one corner of the market, rather than spread across sizes and styles. This kind of focus matters because it shapes how the portfolio moves when markets change. Small cap value stocks can behave very differently from large, broad market indices. The structure makes the portfolio simple to understand and align with factor research, but it also means performance will likely diverge a lot from mainstream benchmarks over time.
Growth
Over the period shown, a hypothetical $1,000 grew to $2,705, a compound annual growth rate (CAGR) of 15.82%. CAGR is like average speed on a road trip: it smooths the path to show how fast wealth grew per year. The portfolio slightly lagged the US market benchmark but beat the global market, which is solid given its niche focus. The trade-off has been sharper drops: the max drawdown was about -48%, versus roughly -34% for the benchmarks. Drawdown measures the biggest peak-to-trough fall, giving a feel for the worst pain so far. Only 19 days delivered 90% of returns, highlighting how a small number of strong days have driven results.
Projection
The Monte Carlo projection uses past return and volatility patterns to simulate many possible 15‑year paths, like running the future 1,000 times with slightly different dice rolls. The median outcome roughly turns $1,000 into $2,831, with a wide “likely” band from about $1,748 to $4,330. That range shows how uncertain long-term results can be, even with the same starting portfolio. The model suggests a bit over 70% of simulations end with a gain, and an average annualized return of 8.24% across all paths. These numbers are not promises; they simply show what could happen if the future somewhat rhymes with the past, which it never does perfectly.
Asset classes
- Stocks 100%
All of the portfolio is in stocks, with no allocation to bonds, cash-like assets, or alternatives. That makes the growth engine very clear: equity markets are the sole driver of returns. In general, stocks offer higher long-term return potential but can swing more sharply in the short term than bonds or cash. A 100% equity allocation usually means more sensitivity to economic cycles, earnings news, and investor sentiment. The absence of other asset classes keeps the structure straightforward and aligned with a growth-focused profile, but it also means there is no built-in cushion from traditionally steadier assets when equities go through major downturns or long flat periods.
Sectors
- Financials 24%
- Consumer Discretionary 18%
- Industrials 15%
- Energy 14%
- Basic Materials 8%
- Technology 7%
- Consumer Staples 5%
- Health Care 4%
- Telecommunications 3%
- Real Estate 1%
Sector exposure is fairly spread out but with some clear tilts. Financials lead at 24%, followed by consumer discretionary at 18%, industrials at 15%, and energy at 14%. Compared with typical broad market indices, this mix leans more into cyclical areas that are closely tied to economic conditions, and less into large-cap tech and health care. Sector weights matter because different industries react differently to interest rates, inflation, and growth expectations. For example, portfolios with more cyclical sectors often see bigger booms when the economy is strong and sharper setbacks in recessions. Here, the spread across many sectors helps diversification, even though it remains squarely in small cap value territory.
Regions
- North America 81%
- Europe Developed 8%
- Japan 7%
- Australasia 2%
- Africa/Middle East 1%
- Latin America 1%
- Asia Developed 1%
Geographically, the portfolio is heavily tilted to North America at 81%, with smaller slices in developed Europe (8%), Japan (7%), and tiny allocations across other regions. This means most of the economic and currency exposure is anchored in one main region, even though the strategy reaches overseas. Compared with a global equity benchmark, which is more diversified across regions, this is a clear home bias. Geography matters because different regions go through their own economic and political cycles. A strong tilt to one region can be rewarding when it outperforms, as US markets often have in recent decades, but it also ties a lot of the portfolio’s fate to that single economic environment.
Market capitalization
- Small-cap 47%
- Micro-cap 40%
- Mid-cap 12%
Almost the entire portfolio is in the smaller end of the market. About 47% is in small caps, 40% in micro caps, and only 12% in mid caps. Market capitalization, or “market cap,” is just the company’s size based on share price times number of shares. Smaller companies often have more room to grow but can be more volatile and sensitive to funding conditions. Micro caps, in particular, can move sharply on news and may trade with lower liquidity. This heavy tilt toward the lower end of the size spectrum supports the portfolio’s strong size factor exposure, but it also explains why return swings and drawdowns can be more pronounced than in large cap–dominated portfolios.
True holdings
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VS ViaSat Inc 0.92%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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MA Matson Inc 0.84%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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LE Lear Corporation 0.67%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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SN Stonex Group Inc 0.65%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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M Macy’s Inc 0.65%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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AV Avnet Inc 0.64%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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SM SM Energy Co 0.64%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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LN Lantheus Holdings Inc 0.61%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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VS Vishay Intertechnology Inc 0.57%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
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GA GATX Corporation 0.56%
Part of fund(s):- Avantis® U.S. Small Cap Value ETF
- Top 10 total 6.75%
Looking through the ETFs’ disclosed top 10 holdings, no single company dominates the combined portfolio; the largest look‑through exposure, ViaSat, is under 1%. Others like Matson, Lear, and SM Energy are also small positions. Overlap appears limited within the top 10 lists, suggesting no obvious hidden single‑stock concentration based on available data. Because only the top 10 from each ETF are used, most underlying holdings are not visible here, so actual overlap could be higher. Even so, the picture points to a broad spread across many small companies. That kind of dispersion helps avoid any one stock driving the portfolio’s total ups and downs disproportionately.
Factors
Factor exposure is the defining feature of this portfolio. Value exposure is extremely high at 95%, and size exposure is also very high at 93%. Factors are like underlying “personality traits” of stocks that research has linked to long-run returns. A strong value tilt means the portfolio focuses on companies trading at lower prices relative to fundamentals, which can help in periods when beaten‑down or cheaper stocks rebound. The strong size tilt reflects its heavy focus on smaller firms, which historically have sometimes outperformed but with more volatility. Other factors like momentum, yield, and low volatility sit near neutral, so they don’t play a major role. Overall, this is a concentrated bet on small cap value behavior.
Risk contribution
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Avantis® U.S. Small Cap Value ETF
Weight: 80.00% 87.2% -
Avantis® International Small Cap Value ETF
Weight: 20.00% 12.8%
Risk contribution shows how much each holding drives the portfolio’s total volatility, which can differ from simple weight. Here, the US small cap value ETF is 80% of the weight but contributes about 87% of total risk, meaning it has a slightly outsized impact on ups and downs. The international ETF, at 20% weight, contributes around 13% of risk, so it’s relatively less volatile or more diversifying versus the US sleeve. This pattern is common when one region or style is more turbulent than another. The key takeaway is that despite holding two funds, the risk profile is dominated by the US small cap value exposure, so its behavior largely defines the ride.
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 efficient frontier analysis shows the current mix is on or very close to the frontier, which means that, given just these two ETFs, the risk/return balance is already quite efficient. The Sharpe ratio, a measure of risk‑adjusted return comparing excess return to volatility, is 0.56 for the current allocation. The optimal and minimum‑variance combinations of the same funds both show higher Sharpe ratios around 0.75 with slightly lower expected returns and risk. That suggests there are alternative weightings that could improve risk‑adjusted performance using only these holdings, but the existing setup is not far off. In practice, the portfolio is already making reasonably good use of the ingredients it has.
Dividends
- Avantis® International Small Cap Value ETF 2.80%
- Avantis® U.S. Small Cap Value ETF 1.30%
- Weighted yield (per year) 1.60%
The combined dividend yield is about 1.60%, with the US small cap value ETF yielding 1.30% and the international version 2.80%. Dividend yield is the annual cash payout as a percentage of price, like the “interest” a stock portfolio pays out. This level is modest and suggests that most of the return expectation is from price movement and potential earnings growth, not from income. That’s common for small cap strategies, where companies may reinvest more of their profits into expansion. Dividends can still provide a small cushion during flat markets and can be reinvested to compound over time, but they are not the dominant feature of this portfolio’s return profile.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Weighted costs total (per year) 0.27%
The portfolio’s ongoing fund costs are relatively low for actively tilted small cap value strategies. The weighted total expense ratio (TER) is about 0.27%, with the US fund at 0.25% and the international fund at 0.36%. TER is the annual fee percentage taken by the funds to cover management and operations, quietly reducing returns each year. Lower costs mean more of the underlying performance flows through to you. For a focused, factor‑driven small cap value approach, these fees are quite competitive. Over long periods, keeping expenses at this kind of level can meaningfully support compounding, especially compared with higher‑fee strategies chasing similar exposures.
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