High yield US equity portfolio with concentrated dividend focus and balanced factor tilts
Report created on May 9, 2026Risk profile
4/7
Diversification profile
2/5
Positions
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SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 53.94% -
SC Schwab U.S. Broad Market ETF
SCHB - US8085241029 13.74% -
AA American Airlines Group
AAL - US02376R1023 10.50% -
ET Energy Transfer LP
ET - US29273V1008 10.40% -
O Realty Income Corporation
O - US7561091049 8.59% -
XO Exxon Mobil Corp
XOM - US30231G1022 1.52% -
PP PPL Corporation
PPL - US69351T1060 1.31%
This portfolio is made up entirely of US stocks, mostly held through two broad ETFs plus a few individual names. Over half sits in a US dividend-focused ETF, with another slice in a total-market ETF, and the rest in five single stocks in airlines, energy, utilities, real estate, and integrated oil. That structure means one core fund effectively sets the tone, while a few stock picks meaningfully shape risk and income. A concentrated mix like this is easier to follow than a long list of positions, but it also ties results to a small group of decisions. The overall setup leans toward equity income, with added idiosyncratic risk from the individual stocks.
Growth
From 2016 to early 2026, $1,000 grew to about $2,932, a compound annual growth rate (CAGR) of 11.4%. CAGR is like the average yearly “cruising speed” over the full trip, smoothing out ups and downs. This lagged both the US market (about 15.4% CAGR) and the global market (about 12.9%). The portfolio also saw a maximum drawdown of roughly -39.5% during early 2020, deeper than the benchmarks’ drops of around -34%. That deeper fall, combined with slower compounding, shows how a higher-yield, more concentrated equity mix can trail broad markets over a long stretch, even while delivering solid absolute growth in dollar terms.
Projection
The Monte Carlo projection uses the portfolio’s historical risk and return to simulate many possible 15‑year paths. Think of it as running 1,000 alternate futures, then seeing how the ending values cluster. The median outcome grows $1,000 to about $2,773, with a central “likely” band from roughly $1,798 to $4,127. A wider possible range from about $1,015 to $7,364 shows how uncertain long‑term equity outcomes can be. The average annualized return across simulations is 8.05%, lower than the backward‑looking 11.4% CAGR, reminding that past strength does not guarantee similar future results and that forecasts are only rough, model‑driven guides, not promises.
Asset classes
- Stocks 100%
All of this portfolio sits in one asset class: equities. There are no bonds, cash surrogates, or alternatives in the mix. Asset class allocation matters because different buckets typically react differently to macro shocks; for example, high‑quality bonds often hold up when stocks fall. A 100% stock stance keeps growth potential front and center but leaves the full ride exposed to equity market swings. Relative to many “balanced” portfolios that blend stocks and bonds, this is closer to a pure‑equity approach. The diversification here comes mainly from what kinds of stocks are held, not from mixing different asset classes with contrasting behaviors.
Sectors
- Energy 21%
- Industrials 16%
- Technology 14%
- Health Care 11%
- Consumer Staples 11%
- Real Estate 9%
- Financials 7%
- Telecommunications 5%
- Consumer Discretionary 5%
- Utilities 2%
Sector exposure is spread across many areas, with the biggest weights in energy (21%) and industrials (16%), followed by technology, health care, and consumer staples around low‑teens each. Real estate, financials, telecom, and consumer discretionary add further variety, with utilities as a small slice. Compared with a typical broad US index, energy and real estate look relatively elevated, while technology appears lighter. Sector balance matters because economic shocks often hit sectors differently; for example, tech-heavy portfolios can be more sensitive to interest rate changes, while energy exposure can swing with commodity cycles. Here, the tilt toward income‑oriented areas supports yield but can amplify swings tied to those industries’ specific cycles.
Regions
- North America 100%
Geographically, exposure is 100% to North America, specifically US‑listed companies and US‑focused ETFs. Geography matters because local economies, currencies, and policy environments diverge over time, creating different return paths. Global benchmarks like MSCI ACWI typically split roughly 60% US and 40% the rest of the world, so this portfolio is more home‑biased than a global index. That home bias has been beneficial for long stretches when US markets outperformed, but it also means outcomes depend heavily on the future path of the US economy and dollar. If other regions lead at times, this structure will capture less of that upside than a more globally spread allocation.
Market capitalization
- Large-cap 64%
- Mid-cap 25%
- Mega-cap 7%
- Small-cap 3%
- Micro-cap 1%
By market size, the portfolio leans strongly to larger companies: about 64% large‑cap, 7% mega‑cap, 25% mid‑cap, with only small slivers in small and micro‑caps. Market capitalization exposure matters because bigger companies often have more stable earnings and easier access to financing, while smaller firms can be more volatile but sometimes faster‑growing. This mix is generally in line with broad US benchmarks that are dominated by large companies. That alignment helps keep overall volatility more manageable than a small‑cap‑heavy approach, while still leaving room for some mid‑cap dynamism. The relatively modest micro and small‑cap exposure keeps the portfolio away from the extremes of the size spectrum.
True holdings
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TX Texas Instruments Incorporated 3.00%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
QC Qualcomm Incorporated 2.76%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
UN UnitedHealth Group Incorporated 2.69%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
CV Chevron Corp 2.24%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
KO The Coca-Cola Company 2.17%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
CO ConocoPhillips 2.10%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
PE PepsiCo Inc 2.04%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- Top 10 total 46.48%
Looking through the ETFs’ top holdings, a few large US names show up as key underlying exposures: Texas Instruments, Qualcomm, UnitedHealth, Chevron, Coca‑Cola, ConocoPhillips, and PepsiCo each sit around 2–3% of the portfolio via funds. There is no notable double‑counting between direct stocks and ETF top‑10s, so hidden overlap appears limited based on available data, though coverage beyond ETF top‑10s is missing. The main concentration comes instead from the explicit single‑stock positions in American Airlines, Energy Transfer, and Realty Income. This means overall risk is driven by a handful of direct picks plus a diversified set of large, high‑quality names embedded inside the core ETFs.
Factors
Factor exposures are estimated using statistical models based on historical data and measure systematic (market-relative) tilts, not absolute portfolio characteristics. Results may vary depending on the analysis period, data availability, and currency of the underlying assets.
Factor exposure shows clear tilts. Value is high at 63%, meaning the portfolio leans toward stocks trading at cheaper valuations relative to fundamentals. Quality is also high at 61%, pointing to companies with stronger balance sheets or more stable earnings. Yield is very high at 80%, reflecting the focus on dividend payers, while low volatility is high at 65%, indicating a preference for historically steadier stocks. Size and momentum are near neutral, so they behave more like the broad market. Factor investing treats these traits as return “ingredients”; here, the mix suggests a defensive, income‑oriented flavor that may hold up better in choppy markets but can lag during speculative, growth‑led rallies.
Risk contribution
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Schwab U.S. Dividend Equity ETF
Weight: 53.94% 45.0% -
American Airlines Group
Weight: 10.50% 21.1% -
Energy Transfer LP
Weight: 10.40% 12.3% -
Schwab U.S. Broad Market ETF
Weight: 13.74% 11.9% -
Realty Income Corporation
Weight: 8.59% 7.3% - Top 5 risk contribution 97.6%
Risk contribution shows how much each holding drives the portfolio’s ups and downs, which can differ from simple weight. The main dividend ETF is 54% of assets but contributes about 45% of total risk, so it’s relatively stable per dollar invested. In contrast, American Airlines is only 10.5% of the portfolio yet contributes over 21% of risk, with a risk‑to‑weight ratio above 2, marking it as a major volatility driver. Energy Transfer also adds more risk than its weight alone suggests, while the broad‑market ETF and Realty Income contribute slightly less risk per unit of allocation. Overall, the top three holdings account for over 78% of total risk, highlighting meaningful concentration in a few positions.
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 risk‑return chart shows the current portfolio sitting below the efficient frontier by about 3.3 percentage points at its risk level. The Sharpe ratio—a measure of return per unit of volatility, using 4% as the risk‑free rate—is 0.47 for the current mix. By reweighting only these existing holdings, the model finds a “max Sharpe” portfolio at 0.81, with similar risk but higher expected return, and a minimum‑variance mix with lower risk and a Sharpe of 0.71. This means the same ingredients could be combined in ways that historically delivered better risk‑adjusted outcomes, without adding any new positions, though these optimizations are based on past data that may not repeat.
Dividends
- Energy Transfer LP 6.90%
- Realty Income Corporation 4.80%
- PPL Corporation 3.10%
- Schwab U.S. Broad Market ETF 1.00%
- Schwab U.S. Dividend Equity ETF 3.30%
- Exxon Mobil Corp 2.80%
- Weighted yield (per year) 3.13%
The portfolio’s total dividend yield sits around 3.13%, comfortably above broad US equity yields in recent years. Yield is boosted by holdings like Energy Transfer at 6.9%, Realty Income at 4.8%, and the dividend ETF at 3.3%. Dividends matter because they provide a steady cash stream that can be spent or reinvested, and historically they’ve been an important part of long‑term equity returns. A higher yield focus, though, can tilt a portfolio toward more mature or capital‑intensive businesses, which may grow earnings more slowly than lower‑yielding, high‑growth companies. Here, income plays a clear role in the overall strategy, complementing capital appreciation.
Ongoing product costs
- Schwab U.S. Broad Market ETF 0.03%
- Schwab U.S. Dividend Equity ETF 0.06%
- Weighted costs total (per year) 0.04%
Portfolio costs are impressively low. The weighted total expense ratio (TER) is about 0.04% per year, with the broad market ETF at 0.03% and the dividend ETF at 0.06%. TER is the annual fee charged by funds, expressed as a percentage of assets, and lower costs leave more of each year’s return in the investor’s pocket. Over long horizons, even small fee differences can compound into meaningful dollar amounts. Compared with many active funds that can charge 0.5–1.0% or more, this level is very cost‑efficient and closely aligned with best practices for index‑based investing. The fee structure is a clear strength of this portfolio’s design.
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