A growth-focused portfolio with significant US exposure and small-cap value emphasis

Report created on Dec 29, 2024

Risk profile Info

5/7
Growth
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

The portfolio primarily comprises three ETFs, with a heavy focus on the Vanguard Total Stock Market Index Fund ETF at 60%. This ETF provides broad exposure to the US stock market. The remaining 40% is equally split between two Avantis small-cap value ETFs, emphasizing both US and international small-cap stocks. This composition leans towards growth with a moderate level of diversification, as it lacks significant exposure to bonds or alternative assets. To enhance diversification, consider integrating other asset classes like fixed income or real estate.

Growth Info

Historically, this portfolio has performed strongly, with a compound annual growth rate (CAGR) of 15.64%. This impressive growth is above many benchmarks, although it experienced a significant maximum drawdown of -38.29%. This volatility is typical for growth-focused portfolios. While past performance is no guarantee of future results, it suggests a high potential for returns, albeit with notable risk. Regularly reviewing performance against benchmarks can help ensure alignment with your investment goals.

Projection Info

The Monte Carlo simulation projects a wide range of potential outcomes, with a median return of 484.22% and a 5th percentile return of 44.89%. This analysis uses historical data to simulate future performance, offering insights into potential risks and rewards. However, it's important to remember that these projections are not guaranteed. To mitigate risk, consider periodically reassessing your portfolio and making adjustments based on changing market conditions and personal goals.

Asset classes Info

  • Stocks
    100%

The portfolio is heavily weighted towards stocks, with 99.76% in this asset class. This allocation aligns with a growth strategy, but it may expose the portfolio to higher volatility. Diversification across multiple asset classes, such as bonds or real estate, can help reduce risk and provide more stable returns over time. Evaluating the potential benefits of including alternative asset classes could enhance the portfolio's resilience against market fluctuations.

Sectors Info

  • Technology
    21%
  • Financials
    17%
  • Industrials
    13%
  • Consumer Discretionary
    13%
  • Health Care
    8%
  • Energy
    7%
  • Basic Materials
    6%
  • Telecommunications
    6%
  • Consumer Staples
    5%
  • Real Estate
    2%
  • Utilities
    2%

Sector allocation reveals a concentration in technology at 20.52% and financial services at 17.28%. While these sectors have driven recent market growth, they can also be more volatile. A balanced sector distribution can help mitigate sector-specific risks. Consider diversifying into underrepresented sectors to enhance stability. Monitoring sector trends and adjusting allocations in response to economic changes can optimize performance.

Regions Info

  • North America
    82%
  • Europe Developed
    8%
  • Japan
    6%
  • Australasia
    2%
  • Africa/Middle East
    1%

With 81.56% exposure to North America, the portfolio is heavily biased towards the US market. While this aligns with many investors' preferences, it limits international diversification. Adding exposure to other regions, particularly emerging markets, could improve diversification and offer new growth opportunities. Regularly reviewing geographic allocations can ensure they align with your long-term goals and risk tolerance.

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's risk-return profile can potentially be optimized using the Efficient Frontier, which balances risk and return among current assets. This approach seeks the best possible risk-return ratio but doesn't necessarily enhance diversification. Periodically reviewing and adjusting allocations can help maintain an optimal balance as market conditions change.

Dividends Info

  • Avantis® International Small Cap Value ETF 4.30%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total Stock Market Index Fund ETF Shares 1.20%
  • Weighted yield (per year) 1.90%

The portfolio yields a modest dividend of 1.9%, with contributions from Avantis International and US Small Cap Value ETFs. Dividends can provide a steady income stream and cushion against market volatility. For growth-focused investors, reinvesting dividends can enhance compounding returns. If income generation is a priority, consider increasing exposure to higher-yielding assets.

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%
  • Weighted costs total (per year) 0.14%

The portfolio's total expense ratio (TER) is 0.14%, which is impressively low. This cost efficiency supports better long-term performance by minimizing the drag on returns. Continuously monitoring and comparing fund expenses can ensure cost-effectiveness. If opportunities arise to reduce costs further without sacrificing performance, consider making adjustments.

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