Growth-oriented portfolio with a focus on small cap and emerging market value ETFs

Report created on May 30, 2025

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 weighted towards small cap value ETFs across various geographies, with a significant emphasis on the US market. The allocation is 52% in US small cap value, 30% in emerging markets value, and 18% in international small cap value. This composition suggests a strategic bet on the potential for higher returns from smaller companies and emerging markets, which are often associated with higher volatility but potentially higher growth rates over the long term.

Growth Info

Historically, this portfolio has achieved a Compound Annual Growth Rate (CAGR) of 8.06%, with a maximum drawdown of -22.68%. These figures indicate a relatively strong performance, especially considering the higher risk associated with small cap and emerging market investments. The days contributing to 90% of returns being so few highlights the portfolio's vulnerability to significant market movements, underscoring the importance of a long-term investment horizon to mitigate short-term volatility.

Projection Info

The Monte Carlo simulation, based on 1,000 iterations, suggests a wide range of outcomes for this portfolio, from a 5th percentile worst-case scenario of -34.4% to a 67th percentile best-case scenario of 233.7%. The median projection of 136.9% indicates optimistic growth potential, though the broad spread underscores the high risk and uncertainty inherent in this growth-focused strategy.

Asset classes Info

  • Stocks
    99%
  • Cash
    1%

The portfolio's assets are nearly entirely in stocks (99%), with a negligible cash holding (1%), and no bond investments. This asset class distribution aligns with the portfolio's growth profile but lacks the diversification benefits that bonds or other asset classes might provide, particularly in terms of reducing volatility and providing income.

Sectors Info

  • Financials
    27%
  • Industrials
    17%
  • Consumer Discretionary
    16%
  • Energy
    10%
  • Basic Materials
    10%
  • Technology
    6%
  • Consumer Staples
    5%
  • Telecommunications
    3%
  • Health Care
    3%
  • Real Estate
    1%
  • Utilities
    1%

Sector allocation shows a heavy concentration in financial services, industrials, and consumer cyclicals, which are sectors often associated with economic growth. However, the relatively lower allocation to sectors like technology, healthcare, and real estate might limit exposure to some of the high-growth areas of the global economy.

Regions Info

  • North America
    53%
  • Asia Emerging
    16%
  • Asia Developed
    10%
  • Europe Developed
    8%
  • Japan
    6%
  • Latin America
    3%
  • Africa/Middle East
    2%
  • Australasia
    2%
  • Europe Emerging
    1%

Geographic exposure is heavily skewed towards North America and emerging markets in Asia, with lesser allocations to developed markets in Europe and Japan. This geographic distribution supports the portfolio's growth orientation but may increase exposure to regional economic and political risks, particularly in emerging markets.

Market capitalization Info

  • Small-cap
    34%
  • Micro-cap
    27%
  • Mid-cap
    18%
  • Large-cap
    11%
  • Mega-cap
    7%

The focus on small to micro-cap companies (61% combined) is consistent with the portfolio's search for growth opportunities. These market segments can offer significant growth potential but also come with higher volatility and risk compared to larger, more established companies.

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.

Considering the Efficient Frontier, this portfolio might be optimized by adjusting asset allocations to achieve a better risk-return ratio. While the current focus on small cap and emerging markets is aligned with growth objectives, diversifying across more asset classes and sectors could potentially enhance returns for the same level of risk.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.60%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis® U.S. Small Cap Value ETF 1.80%
  • Weighted yield (per year) 2.69%

The overall dividend yield of 2.69% is modest, reflecting the growth rather than income focus of the portfolio. The highest yields are found in the emerging markets and international small cap value ETFs, which may provide some income alongside the potential for capital appreciation.

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%
  • Weighted costs total (per year) 0.30%

The average portfolio cost (Total Expense Ratio, or TER) of 0.30% is relatively low, which is beneficial for long-term growth as costs can significantly impact net returns over time. Keeping costs low is particularly important in a portfolio targeting sectors and regions that may have higher inherent risks.

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