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A factor tilted equity portfolio using momentum and value with strong diversification and moderate risk

Report created on Dec 16, 2025

Risk profile Info

4/7
Balanced
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is built entirely from stock ETFs, with a big tilt toward momentum in large and mid caps and value in small caps and international markets. The largest position sits in a single US momentum fund, giving it a strong growth and factor tilt compared with a plain total market benchmark. That matters because factor-tilted portfolios often behave differently than broad indexes, sometimes outperforming but also swinging more. Keeping the structure equity-only but diversified across several factor styles is solid. To smooth the ride further, someone could consider adding a small slice of defensive assets like high‑quality bonds or cash, especially if withdrawals are expected within the next five to ten years.

Growth Info

Historic numbers are very strong, with a Compound Annual Growth Rate (CAGR) of about 15.7%. CAGR is like your average speed on a long road trip: it tells you the steady yearly rate that would get you from start to finish. A max drawdown of roughly ‑24% is actually relatively moderate for a 100% stock portfolio, suggesting risk control has been decent so far. The fact that 90% of returns came from only 19 days highlights how market gains are highly concentrated. Staying fully invested is crucial; trying to time in and out could easily miss those key days and significantly lower long‑term growth.

Projection Info

The Monte Carlo simulation, which runs many “what if” scenarios using past return and volatility patterns, shows a wide but promising range of possible outcomes. A 5th percentile result near 62% growth and a median around 462% highlight both downside risk and big upside potential. The average simulated return of about 14.6% lines up nicely with historical behavior, which is reassuring but not a guarantee. Monte Carlo still leans on history, so it can miss regime shifts like long periods of low returns or unusually high inflation. It’s useful for sanity‑checking expectations; from there, it helps to plan contributions and withdrawal rates that still work if actual returns land closer to the lower end.

Asset classes Info

  • Stocks
    100%

All assets sit in stocks, which is aggressive compared with a typical “balanced” benchmark that usually mixes stocks and bonds. Being 100% in equities boosts expected long‑term growth but also makes the portfolio more sensitive to market crashes and sequence‑of‑returns risk, especially near big spending goals. The positive part is that within stocks, diversification across sizes, regions, and styles is strong, which helps spread company‑specific risk. For someone truly balanced in risk tolerance, layering in a modest allocation to more stable assets could better align with a mid‑range risk profile while still keeping the equity engine as the primary growth driver.

Sectors Info

  • Financials
    23%
  • Technology
    21%
  • Industrials
    16%
  • Consumer Discretionary
    9%
  • Telecommunications
    8%
  • Consumer Staples
    5%
  • Basic Materials
    5%
  • Energy
    5%
  • Utilities
    3%
  • Health Care
    3%
  • Real Estate
    2%

Sector exposure is broad: financials and technology lead, with healthy representation from industrials, consumer areas, energy, and others. This looks similar to many global equity benchmarks, which is great because it avoids over‑reliance on any one theme. A meaningful tech and financial tilt can fuel growth but may feel more volatile during interest‑rate spikes or credit stress. The fact that every major sector is present is a strong indicator of diversification. It can be helpful to occasionally check that no single sector’s weight drifts far beyond typical global ranges, especially after big run‑ups, and gently rebalance if one theme becomes uncomfortably dominant.

Regions Info

  • North America
    71%
  • Europe Developed
    10%
  • Asia Emerging
    5%
  • Japan
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographically, around 71% sits in North America, with the rest spread across developed and emerging regions. That’s a mild home bias toward the US, but still closer to global market weights than many portfolios, which is a plus. Global diversification helps soften the impact if one country or region hits a rough patch for several years. Exposure to developed markets outside North America and a slice of emerging economies brings in different growth drivers, currencies, and policy regimes. Periodically checking the split between domestic and international stocks can help keep it aligned with comfort level, especially if the US or another region significantly outperforms and drifts higher over time.

Market capitalization Info

  • Large-cap
    28%
  • Mega-cap
    28%
  • Mid-cap
    22%
  • Small-cap
    15%
  • Micro-cap
    7%

The spread across company sizes is nicely balanced: roughly 56% in mega and big caps, with meaningful mid, small, and even micro‑cap exposure. Large caps tend to be more stable and widely followed, while smaller companies are often more volatile but can offer higher growth over long periods. This mix supports both resilience and return potential. The presence of small and micro caps also amplifies the value and momentum tilts, since those factors can be more pronounced in smaller firms. Keeping these size buckets in check through occasional rebalancing helps prevent the portfolio from drifting too far toward either very stable giants or very volatile smaller names.

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.

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On a risk‑return chart known as the Efficient Frontier, this portfolio likely sits in the higher‑return, higher‑risk zone among choices using these same ETFs. The Efficient Frontier is simply the set of allocations that offer the best trade‑off between volatility and expected return for a given set of assets. “Efficiency” here refers to that ratio, not necessarily to diversification or simplicity. A small shift from pure equity toward a mix that includes some defensive assets could move it closer to the theoretical frontier for a balanced risk level. Within the current funds, small tweaks between momentum and value allocations might also fine‑tune volatility without drastically lowering long‑term growth expectations.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Invesco S&P International Developed Momentum ETF 1.60%
  • Invesco S&P 500® Momentum ETF 0.70%
  • Invesco S&P MidCap Momentum ETF 0.70%
  • Weighted yield (per year) 1.51%

The overall dividend yield is about 1.5%, which is modest but consistent with a growth‑oriented equity portfolio. Some of the value‑focused and emerging markets holdings offer higher yields above 3%, while the momentum funds sit below 1%. Dividends can be a helpful source of steady cash flow, especially for reinvestment during accumulation or income later on. In this setup, most return is expected from price growth rather than income. That’s totally fine for long‑term growth goals. For someone prioritizing current cash flow, it could make sense to pair this equity engine with more income‑oriented holdings in a different account or sleeve, rather than reshaping this growth‑tilted structure.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® Emerging Markets Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco S&P International Developed Momentum ETF 0.25%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Invesco S&P MidCap Momentum ETF 0.34%
  • Weighted costs total (per year) 0.23%

The blended Total Expense Ratio (TER) of about 0.23% is impressively low for a portfolio using specialized factor ETFs. TER is the yearly fee taken by funds to cover management and operations, and lower costs leave more of the return in your pocket, especially over decades. This cost level compares very favorably with many active or factor strategies that often run much higher. Keeping this fee advantage is a real strength. When considering any changes, it’s worth weighing whether a new fund’s potential benefit truly justifies a higher fee, or whether sticking with similarly priced options keeps long‑term performance more predictable and cost‑efficient.

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