A value tilted global stock portfolio with strong diversification and moderate balanced risk profile

Report created on Nov 7, 2024

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 as a 100% stock strategy with a strong tilt toward value and smaller companies, layered on top of a broad global fund. The core global holding provides market‑wide exposure, while the Avantis funds concentrate on value and small caps in both U.S. and international markets. Compared with a typical balanced benchmark that mixes stocks and bonds, this setup is more growth‑oriented and more volatile. That structure can be powerful for long‑term wealth building but can swing sharply in downturns. Someone using this approach could think about whether the all‑equity stance matches their need for stability, especially for short‑ or medium‑term goals.

Growth Info

Historically, the portfolio shows a compound annual growth rate (CAGR) of 12.08%, meaning a $10,000 investment would have grown to roughly $31,000 over 10 years if that rate held consistently. CAGR is like the average speed on a road trip, smoothing out bumps along the way. The max drawdown of about –23% indicates the worst peak‑to‑trough drop, which is meaningful but milder than deep bear markets. Compared with a standard global equity benchmark, this kind of value‑tilted mix often performs better in certain cycles and lags in growth‑led booms. It’s worth remembering that past performance only shows what happened, not what must happen next.

Projection Info

The forward projection using Monte Carlo simulation suggests a very wide range of possible futures, which is normal for an all‑stock portfolio. Monte Carlo works by taking historical return and volatility patterns, then “re‑rolling the dice” thousands of times to see many paths your money could follow. In this case, the median outcome around +330% and higher percentiles look attractive, but the 5th percentile at +37.8% shows that disappointing long‑term outcomes are still possible. The annualized simulated return around 12.5% is encouraging, yet it’s based on historical behavior. Real‑world results can differ if markets, interest rates, or valuations change meaningfully over the next decades.

Asset classes Info

  • Stocks
    100%

All of the holdings are in stocks, with 0% in bonds, cash, or other asset classes. That makes the portfolio highly growth‑oriented and explains why its risk classification is only “balanced” in name, not in the traditional stocks‑and‑bonds sense. A typical balanced benchmark might hold 40–60% in bonds to cushion volatility; here, the “cushion” must come from diversification across styles, sizes, and regions instead. This equity‑only structure is very coherent for someone with a long horizon and strong stomach for swings. Anyone needing near‑term spending money would usually keep that outside this portfolio in safer, more stable vehicles to avoid selling during market stress.

Sectors Info

  • Financials
    20%
  • Industrials
    16%
  • Consumer Discretionary
    15%
  • Technology
    14%
  • Energy
    9%
  • Basic Materials
    8%
  • Telecommunications
    6%
  • Health Care
    5%
  • Consumer Staples
    4%
  • Utilities
    1%
  • Real Estate
    1%

Sector exposure is broad and well spread: financials, industrials, consumer cyclicals, technology, energy, and basic materials all have meaningful weights, with smaller allocations to communication services, healthcare, consumer defensive, utilities, and real estate. This lines up nicely with global benchmarks and is a strong indicator of diversification. The mild tilt toward more economically sensitive sectors (like financials and cyclicals) fits the value‑tilt theme: these areas often look cheaper on traditional metrics. However, they can be more volatile in recessions or credit‑tightening cycles. Tech exposure is solid but not extreme, which can help reduce vulnerability if high‑growth names go through a rough patch during rising‑rate or de‑rating environments.

Regions Info

  • North America
    60%
  • Europe Developed
    15%
  • Japan
    8%
  • Asia Emerging
    6%
  • Asia Developed
    5%
  • Australasia
    2%
  • Africa/Middle East
    2%
  • Latin America
    1%

Geographically, roughly 60% in North America and 40% spread across Europe, Japan, developed Asia, emerging Asia, and smaller regions gives a solid global footprint. This aligns fairly closely with global market weights, though the U.S. still dominates. That U.S. tilt has been rewarded over the past decade but may not always lead the pack, so having meaningful exposure to developed and emerging markets is a big plus. This allocation is well‑balanced and aligns closely with global standards, helping reduce the risk that any single country or region drives long‑term results. Currency swings and local economic cycles will affect returns, but broad global spread softens single‑market shocks.

Market capitalization Info

  • Mid-cap
    25%
  • Large-cap
    22%
  • Mega-cap
    22%
  • Small-cap
    19%
  • Micro-cap
    11%

The mix across company sizes is unusually well balanced: mega and large caps together are about 44%, with mid caps, small caps, and even micro caps making up more than half of the portfolio. That’s a much stronger tilt toward smaller companies than a typical global index, which leans heavily into mega caps. Smaller and value‑oriented companies have historically delivered higher long‑term returns but with more volatility and sometimes long dry spells. This structure can boost long‑run growth potential and diversify away from a handful of giant companies dominating index performance. It also means bigger short‑term swings and occasional multi‑year periods where large‑cap growth outperforms this kind of tilt.

Redundant positions Info

  • Avantis International Large Cap
    Avantis® International Small Cap Value ETF
    High correlation

Most holdings here are strongly equity‑driven, so they’ll generally move in the same broad direction during big market moves. The especially high correlation between Avantis International Large Cap and Avantis International Small Cap Value means they behave quite similarly across many scenarios, even though one targets smaller firms. Correlation measures how often assets move together; if they’re highly correlated, diversification benefits in crises can be limited. In deep global sell‑offs, all these stock funds are likely to fall together, though small and value stocks might drop more or less depending on the shock. Thinking about whether multiple overlapping value‑tilted international funds are all necessary could slightly simplify and streamline the overall structure.

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.

From a risk‑return angle, this mix looks well thought‑out but could possibly be nudged closer to the Efficient Frontier. The Efficient Frontier is the set of portfolios that deliver the highest expected return for each level of risk, based only on the existing ingredients and their weights. Efficiency here would mean rearranging how much goes into each current ETF rather than adding new ones. Because some holdings are highly correlated and overlapping, trimming or consolidating those could simplify things and slightly improve the overall risk‑return ratio. It’s important to remember that “efficient” doesn’t mean perfect or the least volatile, just the best trade‑off given the current menu of assets.

Dividends Info

  • Avantis® International Small Cap Value ETF 3.30%
  • Avantis® Emerging Markets Value ETF 3.70%
  • Avantis International Large Cap 2.50%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 1.40%
  • Avantis® U.S. Small Cap Value ETF 1.60%
  • Vanguard Total World Stock Index Fund ETF Shares 1.70%
  • Weighted yield (per year) 2.08%

The overall dividend yield of about 2.1% is solid for a value‑tilted global equity portfolio. Individual holdings, especially the international and emerging markets value funds, yield in the 2.5–3.7% range, which helps lift the blended yield. Dividends are cash payments companies make from their profits; over time, they can be reinvested to buy more shares, quietly boosting total return. For someone focused on long‑term growth, reinvesting these payouts is typically powerful. For someone later seeking income, this level of yield offers a decent starting point but would still be somewhat variable because dividends rise and fall with earnings, interest rates, and corporate policies.

Ongoing product costs Info

  • Avantis® International Small Cap Value ETF 0.36%
  • Avantis® Emerging Markets Value ETF 0.36%
  • Avantis International Large Cap 0.25%
  • American Century ETF Trust - Avantis U.S. Large Cap Value ETF 0.15%
  • Avantis® U.S. Small Cap Value ETF 0.25%
  • Vanguard Total World Stock Index Fund ETF Shares 0.07%
  • Weighted costs total (per year) 0.20%

The total expense ratio of around 0.20% is impressively low for such a specialized, value‑tilted global mix. Costs matter because they come off returns every year, like a small headwind against portfolio growth. Here, the ultra‑cheap global core pairs with slightly higher fees on the factor‑tilted funds, landing at a very reasonable blended level. Compared with many actively managed funds or advisory setups charging 0.5–1.0% or more, this cost structure strongly supports better long‑term outcomes. It’s a great sign that fees are already under control, leaving more of the portfolio’s return in the investor’s pocket without needing further aggressive cost cutting.

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