A cautious portfolio with strong dividend focus and moderate geographic diversification

Report created on Apr 15, 2025

Risk profile Info

3/7
Cautious
Less risk More risk

Diversification profile Info

3/5
Moderately Diversified
Less diversification More diversification

Positions

This portfolio consists of 73% stocks and 25% cash, with a focus on dividend-paying assets. The asset allocation is balanced between domestic and international equities, with a notable portion in short-term treasury bonds. Compared to a typical benchmark, the portfolio is conservative, emphasizing income over aggressive growth. A higher cash allocation offers stability, aligning with a cautious risk profile. To enhance returns, consider increasing equity exposure slightly, ensuring it aligns with your risk tolerance.

Growth Info

Historically, this portfolio has achieved a CAGR of 7.70%, with a maximum drawdown of -12.60%. This performance indicates moderate growth with manageable risk, typical for a cautious investor. Compared to benchmarks, this return is respectable, reflecting the portfolio's income focus. While past performance is not a guarantee of future results, maintaining a diversified approach can help sustain returns. Consider periodic reviews to ensure alignment with your goals and risk tolerance.

Projection Info

Monte Carlo simulations project a 10.94% annualized return for this portfolio, with 95.9% of simulations showing positive outcomes. The analysis uses historical data to estimate potential future performance, though it cannot predict exact results. These projections suggest a favorable outlook, with a median return significantly above inflation. It's essential to understand that simulations are based on historical trends, which may not repeat. Regular reviews and adjustments can help optimize future outcomes.

Asset classes Info

  • Stocks
    73%
  • Cash
    25%
  • No data
    2%

The portfolio's allocation is primarily in stocks and cash, with a small unclassified portion. This mix provides a stable income stream through dividends while maintaining liquidity with treasury bonds. Compared to benchmarks, the cash allocation is higher, reducing volatility but also potential growth. Diversifying further into other asset classes, like real estate, could enhance returns without significantly increasing risk. Ensure any changes align with your investment goals and risk tolerance.

Sectors Info

  • Financials
    32%
  • Consumer Staples
    7%
  • Health Care
    7%
  • Industrials
    6%
  • Technology
    6%
  • Telecommunications
    5%
  • Consumer Discretionary
    4%
  • Energy
    4%
  • Basic Materials
    2%
  • Utilities
    2%

Financial services dominate the portfolio at 32%, with smaller allocations across nine other sectors. This concentration could lead to increased volatility if the financial sector underperforms. Compared to common benchmarks, there's a notable underrepresentation in real estate. Diversifying into additional sectors could reduce sector-specific risks and enhance stability. Consider a balanced approach to sector allocation, ensuring it aligns with your long-term objectives.

Regions Info

  • North America
    51%
  • Europe Developed
    15%
  • Australasia
    3%
  • Asia Emerging
    2%
  • Japan
    2%
  • Asia Developed
    1%
  • Africa/Middle East
    1%
  • Latin America
    1%

The portfolio is predominantly North American at 51%, with moderate exposure to Europe and minimal allocations elsewhere. This geographic distribution offers some diversification but leans heavily on developed markets. Compared to benchmarks, emerging markets are underrepresented, potentially limiting growth opportunities. To enhance diversification, consider increasing exposure to emerging markets, balancing potential risks with growth prospects. Ensure geographic shifts align with your risk profile.

Market capitalization Info

  • Large-cap
    28%
  • Mid-cap
    28%
  • Mega-cap
    15%
  • Small-cap
    1%

The portfolio's market capitalization is evenly distributed between big and medium companies, with lesser allocations to mega and small caps. This mix provides a balance between stability and growth potential. Compared to benchmarks, small and micro caps are underrepresented, which may limit growth opportunities. Consider increasing small-cap exposure to enhance growth potential, while monitoring risk levels. Ensure any adjustments align with your long-term investment strategy.

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 current portfolio is not optimized on the Efficient Frontier, which seeks the best risk-return ratio. A more efficient portfolio could achieve a higher expected return of 4.41% at the same risk level. This optimization focuses on reallocating current assets rather than adding new ones. Consider periodic reviews to explore potential reallocations that enhance efficiency, ensuring they align with your risk tolerance and investment goals.

Dividends Info

  • Ares Capital Corporation 9.50%
  • Blackstone Secured Lending Fund 8.10%
  • Hercules Capital Inc 9.10%
  • JPMorgan Equity Premium Income ETF 7.90%
  • JPMorgan Nasdaq Equity Premium Income ETF 11.50%
  • Main Street Capital Corporation 6.70%
  • Blue Owl Capital Corporation 12.30%
  • Schwab U.S. Dividend Equity ETF 4.10%
  • Schwab International Dividend Equity ETF 4.20%
  • iShares® 0-3 Month Treasury Bond ETF 4.80%
  • Weighted yield (per year) 6.12%

With a total yield of 6.12%, this portfolio emphasizes income generation through dividends. High-yielding assets, like the Blue Owl Capital Corporation, contribute significantly to this income stream. Dividend income provides stability, especially in volatile markets. Compared to growth-focused portfolios, this approach offers consistent returns. Consider maintaining a balance between dividend and growth stocks to ensure income stability and potential capital appreciation.

Ongoing product costs Info

  • JPMorgan Equity Premium Income ETF 0.35%
  • JPMorgan Nasdaq Equity Premium Income ETF 0.35%
  • Schwab U.S. Dividend Equity ETF 0.06%
  • Schwab International Dividend Equity ETF 0.14%
  • iShares® 0-3 Month Treasury Bond ETF 0.07%
  • Weighted costs total (per year) 0.10%

The portfolio's total expense ratio (TER) is 0.10%, which is impressively low. This cost efficiency supports better long-term performance by minimizing expenses. Compared to industry averages, your portfolio's costs are well-managed. Regularly reviewing and optimizing fund expenses can further enhance returns. While costs are currently low, remain vigilant about any potential increases that could impact performance.

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