Growth oriented equity heavy portfolio with value small caps and broad international exposure

Report created on Aug 11, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

4/5
Broadly Diversified
Less diversification More diversification

Positions

This portfolio is heavily equity oriented with four ETFs split roughly 50% broad US equity 30% broad international equity and 20% split across U.S. and international small cap value funds. Compared with a balanced 60/40 benchmark this is equity biased and aligns with a growth profile focused on capital appreciation rather than income or downside protection. The structure is straightforward and easy to manage which reduces implementation complexity. Recommendation: keep the simple core satellite approach but explicitly document target weights tolerance bands and a rebalancing cadence to maintain intended risk exposure over time.

Growth Info

Historical metrics show a strong compounded annual growth rate (CAGR) of 14.95% and a maximum drawdown of -36.42%. CAGR, or Compound Annual Growth Rate, measures average annual growth like averaging a car’s speed across a long trip. Using a hypothetical $10,000 over ten years that CAGR would have grown the investment materially though past returns include deep drawdowns and concentrated upside days. Recommendation: use these figures to set realistic expectations while planning for periodic large declines; focus on time horizon and dollar cost averaging rather than assuming past returns will repeat.

Projection Info

A Monte Carlo simulation using 1,000 runs was used to project a range of possible future outcomes based on historical return distributions and volatility. Monte Carlo modelling simulates many possible future paths to show percentiles of outcomes not a single forecast. Results show a wide dispersion with the 5th percentile near a modest loss and the median and upper percentiles showing large gains, illustrating high return potential and high variability. Recommendation: interpret these projections as scenario guidance only and combine them with stress tests and downside planning rather than treating them as guaranteed outcomes.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The allocation is 99% stocks and 1% cash so it’s essentially a pure equity portfolio. Asset class diversification reduces volatility because different classes (stocks bonds cash alternatives) often move differently. With almost no fixed income or alternatives this portfolio will mirror equity market swings closely which is appropriate for a growth profile but increases short-term risk. Recommendation: consider adding a strategic allocation to bonds or low-volatility alternatives if the goal includes smoothing returns or preserving capital during downturns while keeping most assets dedicated to equity growth.

Sectors Info

  • Technology
    23%
  • Financials
    18%
  • Industrials
    13%
  • Consumer Discretionary
    12%
  • Health Care
    7%
  • Telecommunications
    7%
  • Basic Materials
    6%
  • Energy
    5%
  • Consumer Staples
    5%
  • Utilities
    2%
  • Real Estate
    2%

Sector exposure is tilted toward technology at 23% followed by financials 18% and industrials 13% with other sectors represented. Sector concentration matters because certain sectors react differently to macro changes; for example tech-heavy portfolios can be more volatile during rising interest rate periods. This composition broadly resembles common equity benchmarks but with a notable tech bias. Recommendation: monitor sector drift over time and consider modest rebalancing or tactical overlays if sector moves create unintended concentration relative to long-term targets.

Regions Info

  • North America
    63%
  • Europe Developed
    15%
  • Japan
    8%
  • Asia Emerging
    5%
  • Asia Developed
    4%
  • Australasia
    2%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographic exposure is North America 63% Europe developed 15% Japan 8% and smaller exposures to emerging and other regions. Geography affects diversification because different economies and currencies perform differently over cycles. Compared to global market benchmarks the U.S. tilt is prominent but not extreme for many U.S.-based growth portfolios. Recommendation: confirm that the international allocation meets the portfolio’s intended diversification goals and consider a periodic review of emerging market weight if the investor seeks greater long-term diversification benefits from faster-growing regions.

Market capitalization Info

  • Mega-cap
    34%
  • Large-cap
    24%
  • Mid-cap
    20%
  • Small-cap
    13%
  • Micro-cap
    7%

Market cap breakdown shows mega caps 34% big caps 24% mid caps 20% small 13% and micro 7% providing a blend across sizes with a meaningful large-cap anchor. Exposure to small and micro caps via value-focused Avantis funds increases potential for higher long-term returns but also introduces more volatility and liquidity considerations. Market cap balance helps capture different return drivers across company sizes. Recommendation: keep an eye on turnover and trading costs for the smaller cap sleeve and confirm that small cap weight fits the tolerance for higher short-term drawdowns.

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.

Efficient Frontier optimization finds the mix of these exact assets that offers the best expected return for a given amount of portfolio risk. The Efficient Frontier is the set of portfolios that provide the highest expected return for each level of volatility and is calculated from the current assets’ historical return and covariance. Optimization here can identify potential weight shifts to improve risk adjusted returns but is limited to existing securities and assumes historical relationships persist. Recommendation: use optimization outcomes as a starting point then layer in constraints for taxes liquidity and behavioral tolerance before implementing changes.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.10%
  • Vanguard Total International Stock Index Fund ETF Shares 2.70%
  • Weighted yield (per year) 1.85%

The portfolio’s blended dividend yield is about 1.85% with the Avantis international small cap fund yielding 3.3% and the Vanguard US total market around 1.1%. Dividend yield is the annual cash income divided by price and matters more for income-oriented investors or when reinvested to compound returns. For a growth-focused strategy yield is a secondary contributor but the higher yield in value-oriented small caps provides some income ballast. Recommendation: if income is a priority consider modestly increasing higher-yielding components or a targeted income sleeve while tracking tax implications of dividend income.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total Stock Market Index Fund ETF Shares 0.03%
  • Vanguard Total International Stock Index Fund ETF Shares 0.05%
  • Weighted costs total (per year) 0.09%

Total expense ratio (TER) across the portfolio is very low at about 0.09% driven by ultralow-cost Vanguard core funds while the active Avantis small cap value ETFs carry higher fees of 0.25% and 0.36%. TER, or Total Expense Ratio, measures the annual cost to own a fund and acts like a drag on returns over time. Low overall costs are a clear strength that supports better long-term compounding. Recommendation: compare active small cap net performance versus their fees periodically and consider fee sensitivity if similar net outcomes can be achieved with lower-cost alternatives.

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