High income focused stock portfolio with strong yield and low volatility tilts for cautious investors
Report created on Mar 27, 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.
Positions
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SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 70.00% -
GP Goldman Sachs S&P 500 Core Premium Income ETF
GPIX - US38149W6223 15.00% -
AR Ares Capital Corporation
ARCC - US04010L1035 5.00% -
O Realty Income Corporation
O - US7561091049 5.00% -
PC Pimco Corporate & Income Strategy Fund
PCN - US72200U1007 5.00%
The portfolio is tightly focused and income oriented, with about 95% in equities and 5% in bonds. Most of the equity exposure comes from one core dividend ETF at 70%, complemented by a 15% options‑based income ETF and three higher‑yielding securities at 5% each. This structure leans heavily on a single main engine, with smaller positions providing extra yield and diversification. For a cautious risk score, this is still quite equity heavy, but the equity style is more conservative, targeting dividends and lower volatility. The main takeaway is that the portfolio is built to prioritize regular income and smoother equity exposure rather than maximum growth or aggressive speculation.
Growth
Over the measured period, $1,000 grew to about $1,463, which is a solid outcome for an income‑tilted setup. The portfolio’s CAGR, or compound annual growth rate, of 16.61% means it grew roughly that much per year on average, like calculating average speed over a long trip. It did trail both the U.S. and global market by about 5 percentage points per year, which is expected for defensive, income‑oriented approaches that trade some upside for stability. Max drawdown of -15.03% was also smaller than the benchmarks’ declines. That smaller downside is a positive alignment with your cautious risk profile. Just remember past returns over this relatively short window may not repeat the same way.
Asset classes
- Stocks 95%
- Bonds 5%
Asset‑class allocation is very equity dominated, with 95% in stocks and only 5% in bonds. For a cautious risk rating, this is on the higher‑risk side in terms of asset mix, since stocks drive most of the portfolio’s ups and downs. The bond slice, via the Pimco fund, adds a modest stabilizer and some additional income, but it is too small to materially buffer big equity moves. The positive side is that dividend‑focused equities can behave more defensively than broad growth stocks, so the risk is moderated by style instead of asset class. If capital preservation becomes more important than income, increasing true fixed‑income exposure is one lever to consider.
Sectors
- Energy 17%
- Consumer Staples 14%
- Health Care 12%
- Financials 12%
- Technology 11%
- Industrials 9%
- Consumer Discretionary 8%
- Real Estate 5%
- Telecommunications 5%
- Basic Materials 1%
This breakdown covers the equity portion of your portfolio only.
Sector exposure is nicely diversified across traditional, cash‑generating areas, with particular strength in energy, consumer staples, health care, financials, and a moderate technology slice. This mix is more defensive than a typical growth‑heavy benchmark that leans strongly into cutting‑edge tech. Energy and staples help provide resilience when inflation or economic stress appears, while health care and financials often deliver steady earnings and dividends. The 5% real estate and 5% telecom allocations complement the dedicated positions in Realty Income and income‑oriented names, reinforcing the income theme. This sector composition aligns well with cautious, income‑seeking goals and is a strong indicator of thoughtful diversification across different parts of the economy.
Regions
- North America 98%
- Europe Developed 2%
This breakdown covers the equity portion of your portfolio only.
Geographically, the portfolio is overwhelmingly concentrated in North America at 98%, with a small 2% allocation to developed Europe. This strong home‑bias is common for U.S. investors and has been rewarding over the last decade as U.S. markets outperformed many regions. However, it does mean that economic, political, or policy shocks in the U.S. could affect a very large share of your holdings at once. A more globally diversified mix would usually include a higher portion of international developed and possibly some emerging markets exposure. The positive here is simplicity and familiarity, but the trade‑off is missing some potential diversification benefits that come from different growth cycles and currency drivers overseas.
Market capitalization
- Large-cap 58%
- Mid-cap 26%
- Mega-cap 7%
- Small-cap 3%
- Micro-cap 1%
This breakdown covers the equity portion of your portfolio only.
Market‑cap exposure is tilted toward larger companies, with about 65% in mega and large caps and a smaller share across mid, small, and micro caps. Large‑cap and mega‑cap businesses tend to be more established, with stable cash flows and better access to capital, which aligns with the income and low‑volatility style. The 26% in mid caps and a modest slice in smaller companies add some growth potential and diversification without dominating risk. This structure generally supports smoother performance than a small‑cap‑heavy portfolio, though it can lag when smaller, more cyclical companies are leading the market. Overall, this split is consistent with a defensive, quality‑oriented equity approach that still allows some room for upside.
True holdings
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CV Chevron Corp 3.16%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
CO ConocoPhillips 2.88%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
VZ Verizon Communications Inc 2.85%
Part of fund(s):- Goldman Sachs S&P 500 Core Premium Income ETF
- Schwab U.S. Dividend Equity ETF
- Vanguard Communication Services Index Fund ETF Shares
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MR Merck & Company Inc 2.76%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
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KO The Coca-Cola Company 2.76%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
TX Texas Instruments Incorporated 2.67%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
AB Abbott Laboratories 2.66%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
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AM Amgen Inc 2.65%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- Top 10 total 32.39%
Looking through the top positions, overlap risk appears moderate and focused in classic dividend names like Chevron, Coca‑Cola, Verizon, and Merck via the ETFs. There is no hidden double‑up in your two individual stocks, which keeps concentration in Ares Capital and Realty Income very transparent. Because only ETF top‑10 holdings are shown, true overlap is likely higher, but this snapshot still signals a tilt toward mature, cash‑generating companies. This pattern supports steady dividends but reduces exposure to fast‑growing, more speculative businesses. The main takeaway: hidden concentration is more about style (dividend and value) than single‑company bets, which can be comfortable for cautious investors seeking predictability.
Factors
Factor exposure shows strong tilts toward yield, low volatility, value, and quality, with decent momentum and a mild size effect. Factors are like the underlying “ingredients” driving returns: yield targets high dividends, value seeks cheaper stocks, low volatility favors steadier names, and quality looks for strong balance sheets and profits. This combination usually behaves defensively, holding up better in choppy or declining markets but often lagging in speculative growth rallies. The relatively high momentum exposure suggests many holdings have been recent winners, which can help in trending markets but may hurt if leadership suddenly rotates. Overall, these tilts are very aligned with cautious, income‑focused goals and help explain the portfolio’s smoother downside profile.
Risk contribution
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Schwab U.S. Dividend Equity ETF
Weight: 70.00% 75.9% -
Goldman Sachs S&P 500 Core Premium Income ETF
Weight: 15.00% 13.1% -
Ares Capital Corporation
Weight: 5.00% 4.8% -
Realty Income Corporation
Weight: 5.00% 3.7% -
Pimco Corporate & Income Strategy Fund
Weight: 5.00% 2.6%
Risk contribution highlights how much each holding actually drives portfolio volatility, which can differ from its weight. Here, the main dividend ETF at 70% of assets contributes roughly 76% of total risk, acting as the clear “engine” of both returns and fluctuations. The income ETF and Ares Capital together add another 18%‑ish of risk, while Realty Income and the Pimco fund contribute relatively less than their weights. When the top three positions account for nearly 94% of risk, it shows that risk is quite concentrated, though still within diversified vehicles rather than single speculative names. A simple takeaway: any changes to that core ETF’s weight will have a big impact on the overall risk and behavior.
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 the risk‑return chart, the current portfolio has a solid Sharpe ratio of 1.2, meaning you’re getting decent return per unit of volatility. The efficient frontier shows combinations of your existing holdings that could deliver better trade‑offs. The optimal portfolio on that curve has a higher Sharpe of 1.44 with slightly lower risk and slightly higher return, while the minimum‑variance mix still improves risk‑adjusted metrics relative to your current setup. There’s even a same‑risk configuration that could target higher expected returns at a similar volatility level. Because the portfolio sits below the frontier, reweighting among current holdings—not adding new ones—could potentially make your risk/return balance more efficient over time.
Dividends
- Ares Capital Corporation 8.00%
- Goldman Sachs S&P 500 Core Premium Income ETF 8.70%
- Realty Income Corporation 5.40%
- Pimco Corporate & Income Strategy Fund 10.70%
- Schwab U.S. Dividend Equity ETF 2.60%
- Weighted yield (per year) 4.33%
The portfolio’s total yield around 4.33% is a standout feature, especially with several individual holdings yielding between roughly 5% and 11%. Dividend yield is the annual cash payout relative to price and can feel like a “paycheck” from your investments. The blend of a moderate‑yield core ETF and higher‑yield satellites balances reliability with income enhancement. Higher yields can signal either attractive income or higher underlying risk, so it is encouraging that much of this yield comes from diversified funds and established businesses. For an investor prioritizing cash flow, this setup is well aligned; just remember that dividends are not guaranteed and can be cut in severe downturns or company‑specific stress.
Ongoing product costs
- Goldman Sachs S&P 500 Core Premium Income ETF 0.29%
- Pimco Corporate & Income Strategy Fund 0.85%
- Schwab U.S. Dividend Equity ETF 0.06%
- Weighted costs total (per year) 0.13%
Costs are impressively low, with a total expense ratio of about 0.13% across the portfolio. TER, or total expense ratio, is the annual fee charged by funds, similar to a small management toll on your assets. Keeping this toll low is one of the most reliable ways to improve long‑term outcomes, because every dollar not paid in fees keeps compounding for you. The core Schwab ETF’s 0.06% TER is especially cost‑efficient, and even the 0.29% on the Goldman Sachs ETF is reasonable for an options‑based income strategy. The higher‑cost Pimco fund nudges fees up slightly, but given its small weight, overall cost discipline here is a clear strength and well aligned with best practices.
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