A U.S. large cap core with sizeable small cap value and emerging market exposures

Report created on Aug 16, 2024

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

The portfolio is heavily equity oriented with a single large cap core position at 45% in a broad S&P 500 ETF plus meaningful tilts to U.S. small cap value (20%) and several international and emerging market value and small cap ETFs making up the remainder. Total expense ratio or TER is the weighted annual cost of holdings and here the blended TER is low which is a strength. The mix shows a concentrated core plus satellite approach. Recommendation: consider whether the multiple small cap and emerging ETFs are intended as distinct bets or mostly overlapping exposures and simplify where overlap adds no diversification.

Growth Info

Historic returns show a compound annual growth rate or CAGR of 16.09% which means an investment grew on average at that annual pace. For example if $10,000 had grown at 16.09% for ten years it would be roughly $44,000 illustrating strong historical growth. The maximum drawdown was -17.9% showing the largest peak to trough decline in the observed window. This portfolio outperformed many balanced benchmarks historically but past performance does not guarantee future results. Recommendation: use these stats to set expectations for volatility and to confirm whether you can tolerate similar drawdowns going forward.

Projection Info

The Monte Carlo simulation uses repeated random sampling of historical return patterns to estimate a range of possible future outcomes and here 1,000 scenarios were run. Key percentiles show wide dispersion from a 5th percentile outcome around 134.5% to a 67th around 916.8%, with a median large gain and nearly all simulations positive. Simulations assume historical distributions persist so they are useful for scenario planning but not as guarantees. Recommendation: treat these projections as planning tools to stress test goals and to size downside buffers like emergency cash or fixed income.

Asset classes Info

  • Stocks
    100%

This portfolio is 100% equities with zero allocation to bonds or cash which drives higher expected return but also higher short term volatility. Broadly diversified across many equity ETFs the absence of fixed income departs from typical balanced profiles that include bonds for income and drawdown mitigation. Given the stated Profile_Balanced classification the all equity stance is an aggressive implementation of that profile. Recommendation: consider adding a modest bond or cash sleeve to lower sequence of returns risk if the investor requires capital preservation or nearer term withdrawals.

Sectors Info

  • Technology
    24%
  • Financials
    18%
  • Consumer Discretionary
    13%
  • Industrials
    11%
  • Telecommunications
    7%
  • Energy
    7%
  • Basic Materials
    7%
  • Health Care
    6%
  • Consumer Staples
    4%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is concentrated with Technology at 24% and Financial Services at 18% together making up over 40% of the portfolio while other sectors are present in smaller amounts. A technology tilt can boost long term growth but increases sensitivity to interest rate cycles and sentiment shifts; financials add cyclical exposure tied to credit conditions. Matching sector weights to a benchmark is sensible when the objective is market tracking. Recommendation: review whether sector tilts are intentional for return seeking or incidental through fund overlap and rebalance if you want smoother sector exposures.

Regions Info

  • North America
    71%
  • Asia Emerging
    7%
  • Europe Developed
    7%
  • Asia Developed
    5%
  • Japan
    4%
  • Africa/Middle East
    2%
  • Australasia
    1%
  • Latin America
    1%

Geographic weights are tilted to North America at 71% with modest allocations to Asia emerging, Europe developed, and other regions. This home market bias can capture familiarity and lower currency friction but it reduces diversification benefits from broader global exposure. Emerging markets are present but underweight relative to the rest of the world market in aggregate which may limit access to different growth drivers. Recommendation: if global diversification is an explicit goal, consider reallocating a portion of U.S. equity weight to diversified international or emerging market exposures.

Market capitalization Info

  • Mega-cap
    29%
  • Large-cap
    22%
  • Mid-cap
    21%
  • Small-cap
    16%
  • Micro-cap
    11%

Market capitalization mix shows meaningful representation across caps with Mega 29%, Big 22%, Medium 21%, Small 16% and Micro 11%. That provides a decent spread and especially notable small and micro cap exposure driven by the value small cap ETFs which can capture value and size premia. Smaller caps typically offer higher expected long term returns but also higher volatility and liquidity differences. Recommendation: retain small cap exposure if seeking long term outperformance but monitor allocation sizes and rebalance regularly to avoid unintended drift toward one cap segment.

Redundant positions Info

  • Avantis® International Small Cap Value ETF
    Dimensional ETF Trust - Dimensional International Small Cap Value ETF
    High correlation
  • Dimensional ETF Trust - Dimensional Emerging Markets Value ETF
    Avantis® Emerging Markets Value ETF
    Avantis® Emerging Markets Equity ETF
    High correlation
  • Schwab U.S. Large-Cap Growth ETF
    Vanguard S&P 500 ETF
    High correlation

Several holdings are highly correlated which means they tend to move together and so do not add much true diversification. Correlation measures how similarly two assets move where +1 is perfect tandem movement and -1 is opposite. Examples include overlapping international small cap ETFs and multiple emerging market value funds, plus the large cap growth ETF correlating strongly with the S&P 500 core holding. Recommendation: consolidate or replace highly correlated duplicates with genuinely distinct exposures to improve diversification and reduce portfolio complexity and total fees.

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 can likely be improved along the Efficient Frontier which is the set of allocations that offer the highest expected return at each level of risk or the lowest risk for a given return. This optimization only rearranges the current assets and their weights and does not introduce new securities. Given the identified highly correlated groups, removing or consolidating duplicates is a first practical step before running optimization. Recommendation: perform a constrained optimization based on your risk score and liquidity needs and prefer simpler allocations that sit nearer the efficient set.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® Emerging Markets Equity ETF 2.60%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Dimensional ETF Trust - Dimensional Emerging Markets Value ETF 2.80%
  • Dimensional ETF Trust - Dimensional International Small Cap Value ETF 2.50%
  • Schwab U.S. Large-Cap Growth ETF 0.30%
  • Vanguard S&P 500 ETF 1.10%
  • Weighted yield (per year) 1.74%

The portfolio’s blended dividend yield is modest at 1.74% with notable variation across funds from about 0.3% to over 3%. Dividends can provide steady income and a cushion in down markets and are part of total return alongside capital gains. Higher yielding holdings in international and emerging value strategies can help income oriented objectives while growth tilted funds offer lower yield but higher reinvestment potential. Recommendation: align dividend weight with your income needs — increase yield if you need cash flow or keep a lower yield if the priority is capital growth.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® Emerging Markets Equity ETF 0.33%
  • Avantis® Emerging Markets Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Dimensional ETF Trust - Dimensional Emerging Markets Value ETF 0.43%
  • Dimensional ETF Trust - Dimensional International Small Cap Value ETF 0.42%
  • Schwab U.S. Large-Cap Growth ETF 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • Weighted costs total (per year) 0.18%

Overall costs are impressively low with a blended TER of 0.18% which supports better long term compounding since lower fees leave more returns for the investor. Some individual ETFs charge higher fees, but their smaller weights keep total costs down. Fees compound over decades so incremental TER reductions matter. Recommendation: where funds are overlapping in exposure consider switching to lower cost equivalents or consolidating holdings to maintain diversification while trimming fees further for improved long term net returns.

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