Balanced equity income portfolio with strong quality tilt and scope to fine tune risk efficiency

Report created on Mar 27, 2026

Risk 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

The portfolio is built almost entirely from equities, with a modest 3% in bonds and the rest in stock ETFs and one individual company. Over half sits in a broad US large‑cap fund, then meaningful sleeves in US dividends, international stocks, a single utility stock, mid‑caps, and a focused aerospace and defense ETF. Structurally, this is a simple core‑and‑satellite setup: one main index fund as the anchor, surrounded by more specialized funds and a stock to tweak income and style. For someone with a cautious profile, the equity weight is on the higher side, so the key question is whether the growth potential fairly compensates for the extra ups and downs.

Growth Info

Historically, $1,000 grew to about $1,516 over the period, implying a compound annual growth rate (CAGR) of 16.19%. CAGR is like your average speed on a long drive, smoothing out bumps to show typical yearly growth. This result is very close to the US market’s 16.46% and slightly ahead of the global market’s 15.84%, which is a solid outcome. Importantly, max drawdown — the worst peak‑to‑trough drop — was about ‑14.5%, shallower than the US market’s near ‑18.8%. That’s encouraging for a cautious risk score: the portfolio captured almost full equity returns while softening the deepest dips. Still, past numbers don’t guarantee future results, especially over a relatively short window.

Asset classes Info

  • Stocks
    97%
  • Bonds
    3%

The asset allocation is about 97% stocks and 3% bonds, which is much more growth‑oriented than a typical “cautious” mix that often leans heavily on bonds and cash. Stocks tend to deliver higher long‑run returns but can swing sharply in the short term, while bonds usually act as a stabilizer and shock absorber. This equity‑heavy stance has supported strong performance and matches the high expected returns in the simulations, but it also means the portfolio may drop more in sharp market sell‑offs. A general takeaway: if capital preservation and smoother ride are top priorities, gradually lifting the bond or defensive sleeve could better align the asset mix with a cautious risk score without abandoning growth.

Sectors Info

  • Technology
    21%
  • Industrials
    15%
  • Utilities
    11%
  • Financials
    11%
  • Health Care
    9%
  • Consumer Discretionary
    8%
  • Telecommunications
    7%
  • Consumer Staples
    6%
  • Energy
    6%
  • Basic Materials
    2%
  • Real Estate
    2%

This breakdown covers the equity portion of your portfolio only.

Sector exposure is spread across technology, industrials, utilities, financials, health care, consumer areas, energy, telecom, materials, and real estate. Technology is the largest slice at 21%, but not overwhelmingly dominant, while utilities are unusually prominent at 11%, helped by the direct Duke Energy position and dividend‑oriented funds. Compared with broad equity benchmarks, this sector mix is more income and defensively flavored, which can cushion downturns when markets rotate away from high‑growth names. On the flip side, if growth or speculative segments lead a rally, this profile might lag. The balance here is quite healthy: the portfolio’s sector composition matches many diversification best practices, adding resilience without extreme concentration in any single economic area.

Regions Info

  • North America
    87%
  • Europe Developed
    6%
  • Japan
    2%
  • Asia Developed
    1%
  • Australasia
    1%

This breakdown covers the equity portion of your portfolio only.

Geographically, about 87% of exposure is in North America, with smaller slices in developed Europe, Japan, and other developed Asia‑Pacific. That’s a heavier North American tilt than most global benchmarks, which tend to hold more non‑US stocks. A home‑country bias can feel comfortable, especially for a US‑based investor, and has benefited from the strong performance of US markets in recent years. However, it does mean portfolio fortunes are tied closely to the US and Canadian economic and policy environment. Expanding exposure to other regions over time can reduce reliance on one market’s cycle and currency, creating a smoother experience when one part of the world underperforms while another is doing well.

Market capitalization Info

  • Large-cap
    41%
  • Mega-cap
    30%
  • Mid-cap
    23%
  • Small-cap
    3%
  • Micro-cap
    1%

This breakdown covers the equity portion of your portfolio only.

Across market capitalization, the portfolio leans heavily toward mega‑cap and large‑cap stocks, which together account for over 70% of exposure. Mid‑caps have a solid presence, while small‑ and micro‑caps are only minor additions. Large and mega companies tend to be more established, with diversified businesses and stronger balance sheets, which often means lower volatility and more predictable earnings than tiny firms. That fits well with a cautious profile and complements the quality and dividend tilts elsewhere in the portfolio. The smaller position in small and micro‑caps does limit participation in the sometimes explosive upside of very small companies but also helps avoid their more frequent sharp drawdowns and business risks.

True holdings Info

  • Duke Energy Corporation
    9.17%
  • NVIDIA Corporation
    3.84%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Apple Inc
    3.48%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Microsoft Corporation
    2.60%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Amazon.com Inc
    1.82%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Alphabet Inc Class A
    1.61%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Broadcom Inc
    1.35%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Alphabet Inc Class C
    1.29%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Meta Platforms Inc.
    1.26%
    Part of fund(s):
    • Vanguard S&P 500 ETF
  • Tesla Inc
    1.01%
    Part of fund(s):
    • LS 1x Tesla Tracker ETP Securities GBP
    • Vanguard S&P 500 ETF
  • Top 10 total 27.42%

This breakdown covers the equity portion of your portfolio only.

Looking through the ETFs, the largest indirect exposures are familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, Alphabet, Meta, and Tesla. Several of these appear in multiple funds, which quietly concentrates risk in a handful of big US growth companies even though you only hold them via ETFs. Duke Energy is the only major single‑stock position and does not overlap with ETF top holdings, so its risk is more independent. Because only ETF top‑10 holdings are included, true overlap is likely higher than shown. The takeaway: diversification looks broad on the surface but is still meaningfully influenced by the performance of a small group of dominant US giants.

Factors Info

Value
Preference for undervalued stocks
High
Data availability: 22%
Size
Exposure to smaller companies
Neutral
Data availability: 26%
Momentum
Exposure to recently outperforming stocks
Neutral
Data availability: 100%
Quality
Preference for financially healthy companies
Very high
Data availability: 9%
Yield
Preference for dividend-paying stocks
Very high
Data availability: 25%
Low Volatility
Preference for stable, lower-risk stocks
High
Data availability: 97%

Factor exposure shows strong tilts toward yield, quality, and value, with moderate exposure to low volatility and size, and roughly neutral momentum. Factors are like underlying “traits” — such as cheapness (value), financial strength (quality), and income (yield) — that research links to long‑term return patterns. A quality and yield tilt typically means companies with solid balance sheets and steady dividends, which can hold up better in stress periods and support cash flow needs. Value exposure adds a contrarian flavor that may do well when markets rotate away from expensive growth. The moderate low‑volatility bias fits a smoother‑ride goal. Together, these tilts suggest a thoughtful, defensively‑minded equity approach rather than a high‑octane growth chase.

Risk contribution Info

  • Vanguard S&P 500 ETF
    Weight: 52.42%
    60.0%
  • Schwab U.S. Dividend Equity ETF
    Weight: 13.19%
    11.2%
  • Schwab International Equity ETF
    Weight: 10.62%
    10.5%
  • SPDR® S&P Aerospace & Defense ETF
    Weight: 5.70%
    7.6%
  • Vanguard Mid-Cap Index Fund ETF Shares
    Weight: 6.30%
    7.1%
  • Top 5 risk contribution 96.5%

Risk contribution reveals how much each holding drives overall ups and downs, which can differ from its weight. Here, the main S&P 500 ETF is about 52% of assets but almost 60% of total portfolio risk, so it punches slightly above its weight. The aerospace and defense ETF is only 5.7% by weight but contributes 7.6% of risk, signaling higher inherent volatility. The top three holdings together account for nearly 82% of risk, so smaller positions don’t significantly change the portfolio’s behavior. Aligning risk contribution with comfort levels often involves trimming highly influential positions or pairing them with more stabilizing assets, helping ensure no single sleeve dominates how the portfolio behaves in rough markets.

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 an expected return of 16.38% with 12.55% volatility, giving a Sharpe ratio of 1.15. The optimal mix using only your existing holdings improves the Sharpe to 1.72 with slightly lower return but much lower risk, while the minimum variance version further reduces risk at a still‑respectable return. Because the current point sits below the efficient frontier, the same ingredients could be combined more efficiently. Interestingly, the “same‑risk optimized” outcome suggests that at your current risk level, a different weighting might significantly boost expected return, though that number looks unusually high and should be treated cautiously. The practical takeaway: thoughtful reweighting, not new products, could meaningfully sharpen your risk‑reward tradeoff.

Dividends Info

  • Duke Energy Corporation 3.30%
  • Schwab U.S. Dividend Equity ETF 2.60%
  • Schwab International Equity ETF 3.40%
  • Schwab Strategic Trust 7.10%
  • Vanguard Mid-Cap Index Fund ETF Shares 1.50%
  • Vanguard S&P 500 ETF 1.20%
  • SPDR® S&P Aerospace & Defense ETF 0.30%
  • Weighted yield (per year) 1.93%

The overall dividend yield of about 1.93% is modest but meaningfully enhanced by income‑oriented components. The Schwab dividend and international equity ETFs, plus Duke Energy, provide yields in the 2.6–3.4% range, while one small holding shows a very high yield that may not be stable over time. Dividends can be valuable for funding withdrawals or reinvesting to boost compounding, but very high yields sometimes signal elevated risk or unsustainable payouts. For a cautious profile, the current balance is appealing: a reasonable income stream without fully sacrificing growth potential from lower‑yielding broad market and mid‑cap exposures. Over time, checking that yield levels remain supported by earnings strength can help avoid income “traps.”

Ongoing product costs Info

  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Equity ETF 0.06%
  • Schwab Strategic Trust 0.03%
  • Vanguard Mid-Cap Index Fund ETF Shares 0.04%
  • Vanguard S&P 500 ETF 0.03%
  • SPDR® S&P Aerospace & Defense ETF 0.35%
  • Weighted costs total (per year) 0.05%

Costs are impressively low, with a weighted total expense ratio around 0.05%. TER, or total expense ratio, is the annual fee charged by funds, similar to a small management toll on your investments. Keeping TERs this low is a major positive, because every fraction of a percent saved in fees stays invested and can compound over decades. The only noticeably higher‑cost piece is the specialized aerospace and defense ETF at 0.35%, which is still reasonable for a niche strategy. Overall, the cost structure supports better long‑term performance and aligns very well with best practices for a broadly diversified, predominantly passive equity portfolio. From a fee standpoint, you’re already in excellent shape.

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