A high octane equity portfolio emphasizing momentum and small cap value with solid diversification scores

Report created on Dec 29, 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 a pure equity mix, with half in a large cap momentum fund and the other half split between U.S. and international small cap value. Compared with a broad market index that often blends stocks and bonds, this setup is more growth-tilted and more volatile. Having everything in stocks can speed up long-term growth, but it also means deeper swings in bad markets. Keeping this profile makes sense if the time horizon is long and there’s comfort with ups and downs. If that’s not the case, adding a stabilizing sleeve and dialing back factor tilts could smooth the ride.

Growth Info

Historically, this portfolio shows a very strong compound annual growth rate (CAGR) of 18.84%. CAGR is just the “average speed” of growth per year, like a car’s average miles per hour on a road trip. A $10,000 starting amount growing at that rate for 10 years would have ended much higher than a classic broad-market benchmark. The trade-off is a max drawdown of about -37%, meaning at one point the value was roughly a third below its peak. That kind of drop is normal for aggressive equity mixes. It’s important to remember past numbers don’t guarantee the same outcome going forward.

Projection Info

The Monte Carlo analysis, which runs 1,000 simulated futures based on historical patterns, points to a wide range of potential outcomes. Monte Carlo is like rolling the dice on market paths many times to see what might happen, using past returns and volatility as a guide. The median (50th percentile) result of about 833% suggests strong potential compounding, while the 5th percentile around 100% shows that flat-ish long-term outcomes are also possible. Nearly all simulations ended positive, but this still doesn’t eliminate risk. These simulations are only rough maps, not promises, especially if future markets behave very differently from the past.

Asset classes Info

  • Stocks
    100%

All of the holdings sit in one asset class: stocks. That explains the “growth” risk profile and the portfolio’s relatively high risk score. In contrast, many benchmark or target-date style mixes blend stocks with bonds and sometimes cash to reduce volatility and soften drawdowns. Staying 100% in equities can be powerful for long horizons and for investors who don’t need to tap the money soon. For anyone with a medium or shorter horizon, or who tends to worry during downturns, gradually introducing more defensive assets could bring the overall risk closer to traditional balanced portfolios. The current configuration is firmly in the aggressive camp.

Sectors Info

  • Financials
    20%
  • Technology
    20%
  • Industrials
    15%
  • Consumer Discretionary
    11%
  • Telecommunications
    8%
  • Energy
    7%
  • Basic Materials
    6%
  • Consumer Staples
    5%
  • Health Care
    3%
  • Utilities
    2%
  • Real Estate
    1%

Sector exposure is broad across financials, technology, industrials, consumer cyclicals, energy, and more, with no single area overwhelmingly dominant. This is a strong point: the mix roughly resembles major benchmarks, so it avoids extreme overexposure to one theme. Momentum and small cap value tilts can still cause performance to lean toward sectors that are temporarily in favor, which may create bursts of outperformance followed by choppier periods. Tech-heavy or cyclical-tilted phases, for example, can react strongly to changes in interest rates or economic growth. Keeping an eye on whether any one sector drifts far above others over time can help maintain the healthy diversification currently in place.

Regions Info

  • North America
    77%
  • Europe Developed
    9%
  • Japan
    8%
  • Australasia
    2%
  • Africa/Middle East
    1%
  • Asia Developed
    1%

Geographically, the portfolio is anchored in North America at about 77%, with moderate exposure to Europe and Japan and minimal allocation to emerging markets. This roughly mirrors many U.S.-centric benchmarks that emphasize domestic stocks while sprinkling in developed international exposure. That home bias can be comforting, since news and companies are more familiar, and U.S. markets have done very well over the last decade. The flip side is that if non-U.S. or emerging markets have a long stretch of outperformance, the portfolio might lag more global mixes. Regularly revisiting the split between domestic and international holdings can help keep the geographic balance aligned with long-term goals.

Market capitalization Info

  • Large-cap
    22%
  • Mega-cap
    21%
  • Small-cap
    21%
  • Mid-cap
    21%
  • Micro-cap
    14%

Market capitalization is well spread: mega, big, mid, small, and even micro caps are all meaningfully represented. This is quite balanced and more diversified than many benchmark portfolios that lean heavily toward mega and large caps. Smaller firms, especially in value strategies, often have higher growth and risk, leading to more pronounced ups and downs. Larger companies tend to be more stable but may grow slower. Blending all size segments this way broadens the opportunity set and helps avoid overreliance on a few giant firms. Keeping an eye on whether small and micro caps become too dominant over time can help manage volatility without abandoning the growth tilt.

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.

On a risk-return chart, known as the Efficient Frontier, this portfolio sits as an aggressive, high-return, high-volatility point. The Efficient Frontier is the curve showing the best possible return for each risk level, using only the existing building blocks and different weightings between them. Within this three-fund lineup, tweaking the shares of momentum vs. small cap value can nudge the mix toward slightly lower volatility or higher return potential, but it won’t change the fact that it’s a 100% equity design. “Efficiency” here means squeezing the most expected return from a chosen risk level, not maximizing diversification, income, or other personal goals.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.00%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Invesco S&P 500® Momentum ETF 0.70%
  • Weighted yield (per year) 1.50%

The overall dividend yield of about 1.5% is modest, but that’s typical for a growth-tilted, factor-heavy equity setup. Dividends are the cash payments companies share with investors, like a small paycheck on top of price gains. Here, income is mainly a secondary feature: the focus is on capital growth from price appreciation and factor exposure. This fits well for long-term accumulation where reinvesting dividends can quietly boost compounding. For an investor who eventually needs higher regular income, such as in retirement, shifting gradually toward higher-yielding holdings or building a separate income sleeve could help, while still keeping the core growth engine in place.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Invesco S&P 500® Momentum ETF 0.13%
  • Weighted costs total (per year) 0.22%

The total expense ratio (TER) around 0.22% is impressively low for a portfolio using specialized factor funds. TER is like an annual membership fee taken as a small percentage of your investment. Lower costs leave more of the returns in your pocket, and over decades this difference can become surprisingly large. Compared with many active or niche strategies that charge much more, this fee level is very competitive and supports better long-term outcomes. Keeping these costs low and monitoring them occasionally for any creeping increases is a smart ongoing habit, especially since the current structure already lines up well with cost-conscious best practices.

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