Globally diversified value tilted equity portfolio with balanced risk profile and strong historical results
Report created on Mar 22, 2026Risk profile
- Secure Speculative
The risk profile, derived from past market volatility, reflects the level of risk the portfolio is exposed to. This assessment helps align your investments with your financial goals and comfort with market fluctuations.
Diversification profile
- Focused Diversified
The diversification assessment evaluates the spread of investments across asset classes, regions, and sectors. This ensures a balanced mix, reducing risk and maximizing returns by not concentrating in any single area.
What type of investor this portfolio is suitable for
Balanced Investors
A portfolio like this typically fits an investor who is growth-oriented, comfortable with meaningful ups and downs, and focused on long-term wealth building rather than short-term stability. They likely have a horizon of at least 10–20 years, such as saving for retirement or future financial independence, and can tolerate temporary drawdowns of 20–30% without panicking. They may appreciate academic evidence behind factors like value and size, preferring a rules-based, diversified strategy over stock-picking. Income is a secondary goal, with dividends seen more as a supporting feature than the main objective. Emotional resilience and a willingness to stay the course through market cycles are key traits.
Positions
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State Street® SPDR® Portfolio S&P 500® ETF
SPYM - US78464A8541 50.00% -
Avantis® International Small Cap Value ETF
AVDV - US0250728021 20.00% -
Avantis International Large Cap
AVIV - US0250723642 15.00% -
Avantis® U.S. Small Cap Value ETF
AVUV - US0250728773 15.00%
The portfolio is a pure equity mix with four ETFs: a broad US large cap fund at 50%, plus three Avantis value-tilted funds covering US small caps and international large and small caps. This structure blends a core market exposure with meaningful tilts toward smaller companies and cheaper valuations. A 100% stock allocation is aggressive compared with classic “balanced” mixes that include bonds, so short-term swings can be sizable even if long-term growth potential is strong. The big positive is that this setup keeps things simple and transparent. Anyone using a similar approach is effectively saying they can stomach ups and downs in search of higher long-run growth.
Growth
From late 2021 to March 2026, a hypothetical $1,000 grew to $1,629, a compound annual growth rate (CAGR) of 12.35%. CAGR is like average speed on a road trip: it smooths the journey into one steady pace. Over the same period, the US market reached $1,608 (11.25% CAGR) and the global market $1,481 (9.22% CAGR). The portfolio also had a max drawdown of -23.89%, slightly shallower than both benchmarks. Max drawdown is the worst peak-to-trough fall and shows pain during bad times. Beating both US and global markets with similar or slightly lower drawdowns is a strong outcome, though of course past performance can’t guarantee future results.
Projection
The Monte Carlo projection takes the portfolio’s historical return and volatility and then simulates 1,000 different 10‑year paths, like rolling the dice on future markets many times. It shows a median cumulative return of about 432%, meaning $1,000 could land around $5,316 in the 50th percentile scenario. The downside 5th percentile is +70%, while the 67th percentile is about +605%. Importantly, 984 out of 1,000 simulations end positive, and the average annualized simulated return is 14.07%. These numbers are encouraging, but they’re based on past behavior; if markets behave differently in the future, actual outcomes could be better or worse than the projection suggests.
Asset classes
- Stocks 50%
All reported assets are stocks, with 50% explicitly tagged as stock and the rest implicitly equity via the ETFs. This means there’s no built-in ballast from bonds or cash to cushion market drops. A pure equity stance typically offers higher expected returns over decades but can be emotionally challenging in deep bear markets. Relative to many “balanced” benchmarks, which may hold 40–60% bonds, this is clearly on the growth-oriented side. For someone comfortable with volatility and a long time horizon, such a structure is coherent. For shorter timeframes or lower risk tolerance, layering in some defensive assets could smooth the ride.
Sectors
- Financials 10%
- Industrials 10%
- Energy 7%
- Consumer Discretionary 7%
- Basic Materials 7%
- Technology 2%
- Consumer Staples 2%
- Health Care 2%
- Telecommunications 1%
- Utilities 1%
- Real Estate 1%
Sector data shows exposure spread across financial services, industrials, energy, consumer cyclicals, basic materials, and smaller allocations to technology, defensive, healthcare, communications, utilities, and real estate. No single sector dominates, and several cyclical areas (like financials and industrials) are well represented, which fits with a value and small-cap tilt. This composition is more old-economy biased than many broad indexes that are heavily tech-driven. That can be helpful when growth and tech stocks are out of favor but may lag when high-growth sectors lead the market. Overall, the sector mix looks well-balanced and avoids the extreme concentration seen in many headline indexes today.
Regions
- North America 19%
- Europe Developed 16%
- Japan 10%
- Australasia 3%
- Africa/Middle East 1%
- Asia Developed 1%
Geographically, the portfolio is nicely global: around 19% North America, 16% Europe developed, 10% Japan, plus smaller slices to Australasia, developed Asia, and Africa/Middle East. That’s more internationally tilted than many US-based investors, who often sit at 60–70% US by default. This broader spread reduces reliance on any single country’s economy, politics, or currency. It also means returns will diverge from a US-only benchmark—occasionally underperforming when the US leads, and potentially outperforming when other regions catch up. This allocation is well-balanced and aligns closely with global standards, supporting resilience across different regional economic cycles.
Market capitalization
- Small-cap 15%
- Mid-cap 15%
- Micro-cap 8%
- Large-cap 6%
- Mega-cap 6%
Market-cap exposure is quite diversified: about 15% small, 15% mid, 8% micro, and 12% combined big and mega caps. That’s a strong tilt toward smaller companies compared with typical cap-weighted indexes, which are dominated by mega and large caps. Smaller firms can offer higher growth potential and often line up with value strategies, but they usually bring higher volatility and can drop more sharply in recessions. The presence of micro caps further increases this effect. This structure may shine over very long periods but demands patience through rough patches when smaller companies fall out of favor or face tighter financing conditions.
True holdings
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NVIDIA Corporation 3.66%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Apple Inc 3.32%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Microsoft Corporation 2.48%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Amazon.com Inc 1.74%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Alphabet Inc Class A 1.54%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Broadcom Inc 1.28%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Alphabet Inc Class C 1.23%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Meta Platforms Inc. 1.20%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
-
Tesla Inc 0.96%Part of fund(s):
- LS 1x Tesla Tracker ETP Securities GBP
- State Street® SPDR® Portfolio S&P 500® ETF
-
Berkshire Hathaway Inc 0.79%Part of fund(s):
- State Street® SPDR® Portfolio S&P 500® ETF
- Top 10 total 18.19%
Looking through ETF top holdings, the biggest underlying exposures are familiar mega-cap names like NVIDIA, Apple, Microsoft, and Amazon, each under 4% of the total. These appear mainly via the S&P 500 ETF, and some names show up in multiple funds, creating overlapping exposure. Even so, no single stock dominates, and the largest positions are still modest as a share of the overall portfolio. Coverage is only about a third of total holdings because we see just ETF top-10s, so actual overlap is likely a bit higher than reported. Still, this pattern suggests broad diversification with some inevitable clustering in the largest global companies.
Factors
Factor exposure is dominated by value (85%), plus solid tilts to size (42.8%), momentum (50.5%), and low volatility (60%). Factor investing targets traits like cheapness (value), smaller size, recent winners (momentum), and smoother price moves (low volatility) that research links to long-term returns. A strong value tilt means the portfolio leans into cheaper stocks, which can outperform after long growth-led runs but may lag when investors chase high-growth names. The low-vol bias can slightly cushion drawdowns, while momentum can help ride trends. With coverage around 58%, signals aren’t perfect, but the mix suggests a thoughtful, research-driven approach rather than pure market mirroring.
Risk contribution
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State Street® SPDR® Portfolio S&P 500® ETF
Weight: 50.00% 49.5% -
Avantis® International Small Cap Value ETF
Weight: 20.00% 18.6% -
Avantis® U.S. Small Cap Value ETF
Weight: 15.00% 18.3% -
Avantis International Large Cap
Weight: 15.00% 13.6%
Risk contribution measures how much each holding drives overall volatility, which can differ from simple weight. Here, the S&P 500 ETF is 50% of the portfolio and contributes about 49.5% of risk, very aligned. The US small cap value fund, at 15% weight, contributes 18.3% of risk, a bit more than its size because smaller value stocks tend to be choppier. The three largest positions together generate about 86.4% of total portfolio risk, so most of the ups and downs come from these core funds. That concentration is normal for a focused four-ETF setup and can be managed by adjusting position sizes if a smoother profile is desired.
Redundant positions
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High correlationAvantis International Large CapAvantis® International Small Cap Value ETF
The two international Avantis funds—large cap and small cap value—are highly correlated, meaning they tend to move in similar directions at the same time. Correlation is like how two dancers move: if they always step together, they don’t diversify each other much during a fall. High correlation isn’t automatically bad, especially when both funds provide access to different segments (size and value) of the same broad region. But it does limit the diversification benefit between them, so tweaks across the four ETFs primarily influence exposure type (value vs. broad market, US vs. international) rather than creating entirely independent risk buckets.
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.
On the risk‑return chart, the current portfolio has expected return of 12.61%, risk of 16.61%, and a Sharpe ratio of 0.64. The Sharpe ratio measures return per unit of risk; higher is better. The optimal mix of these same ETFs has a Sharpe of 0.76, and even the minimum-variance blend scores 0.72. Because the current point sits below the efficient frontier, the same holdings could be reweighted to get either higher expected return for similar risk or similar return with lower risk. This is good news: no new products are needed, just fine-tuning the weights to move closer to the most efficient combinations.
Dividends
- Avantis® International Small Cap Value ETF 3.10%
- Avantis International Large Cap 3.10%
- Avantis® U.S. Small Cap Value ETF 1.80%
- State Street® SPDR® Portfolio S&P 500® ETF 1.40%
- Weighted yield (per year) 2.06%
The portfolio’s total dividend yield sits around 2.06%, with international value funds yielding about 3.10%, US small value 1.80%, and the S&P 500 ETF 1.40%. Dividends are regular cash payments from companies and can be a meaningful part of long-term equity returns, especially when reinvested. This yield level is moderate: higher than many growth-heavy portfolios but not an income-first setup. For investors in the accumulation phase, reinvesting these dividends can accelerate compounding over years. For those eventually seeking cash flow, the value and international tilt provides a good base that could support a reasonable income stream later without chasing ultra-high yields.
Ongoing product costs
- Avantis® International Small Cap Value ETF 0.36%
- Avantis International Large Cap 0.25%
- Avantis® U.S. Small Cap Value ETF 0.25%
- Weighted costs total (per year) 0.15%
The Avantis funds have expense ratios between 0.25% and 0.36%, and the total portfolio TER comes out to a low 0.15%. TER (Total Expense Ratio) is like an annual service fee charged by the funds; every dollar not spent on fees stays invested to grow. These costs are impressively low, supporting better long-term performance compared with many actively managed options that may charge 0.75%–1% or more. Over decades, the difference can compound into thousands of dollars on even modest portfolios. From a cost perspective, this setup is well-aligned with best practices and leaves more of the return in the investor’s pocket.
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