Dividend and real estate focused portfolio with strong quality tilt and moderate diversification across US stocks
Report created on Aug 15, 2026Risk profile
4/7
Diversification profile
3/5
Positions
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DG iShares Core Dividend Growth ETF
DGRO - US46434V6213 40.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 40.00% -
VN Vanguard Real Estate Index Fund ETF Shares
VNQ - US9229085538 20.00%
The portfolio is built from three low-cost US-listed ETFs: two broad dividend‑oriented equity funds at 40% each, plus a 20% allocation to a real estate ETF. So 80% of the portfolio is in general stocks and 20% in listed property, giving it a clear income and “cash‑flow” flavor rather than pure growth. With only three holdings, it looks simple on the surface, but each ETF owns many underlying companies, so diversification happens inside the funds. This kind of structure makes the portfolio easy to manage day to day, while still behaving like a diversified basket of dividend‑paying businesses plus real estate.
Growth
Over the period from 2016 to 2026, a $1,000 investment in this portfolio grew to about $3,104, which works out to a compound annual growth rate (CAGR) of 12.03%. CAGR is the “average speed” of growth per year, smoothing out the bumps. The portfolio lagged the broad US market by about 3.4 percentage points a year and trailed the global market by 0.7 points, which is typical for an income‑tilted mix in a strong growth decade. The worst historical drop, or max drawdown, was about -35%, slightly deeper than the benchmarks but recovered in around eight months, showing resilience after shocks.
Projection
The forward projection uses a Monte Carlo simulation, which is basically a large set of “what if” scenarios generated from past return and volatility patterns. It runs 1,000 possible 15‑year paths and shows where a $1,000 investment might end up if markets behave similarly to history. The median outcome is about $2,745, with a wide range from roughly $1,038 to $7,258 between the more extreme cases. This highlights that even with an average simulated annual return of 7.85%, results can vary a lot. As always, these are statistical experiments, not promises, and actual future markets can be better or worse than the inputs suggest.
Asset classes
- Stocks 80%
- Real Estate 20%
Asset‑class‑wise, the mix is straightforward: 80% in general equities and 20% in listed real estate. That 20% property slice is meaningful enough to change the portfolio’s behavior, because real estate often reacts differently to interest rates, inflation, and economic cycles than regular stocks. Compared to a typical global equity index, this is a higher real estate allocation, which can increase sensitivity to property‑specific trends and financing conditions. At the same time, the strong equity majority keeps the portfolio tied to overall corporate profit growth, so it remains mostly an equity‑driven strategy with an added real‑asset flavor through REITs.
Sectors
- Real Estate 20%
- Health Care 15%
- Technology 14%
- Consumer Staples 12%
- Financials 12%
- Energy 8%
- Industrials 7%
- Consumer Discretionary 5%
- Telecommunications 3%
- Utilities 3%
- Basic Materials 1%
This breakdown covers the equity portion of your portfolio only.
Sector exposure is fairly broad, with real estate at 20% and notable allocations to health care, technology, consumer staples, and financials. This spread means the portfolio is not overly tied to one single industry, which supports its moderate diversification score. Compared with broad market indices, real estate and classic “defensive” areas like consumer staples and health care are more prominent, while some cyclical or speculative areas are comparatively smaller. Portfolios leaning into defensive and income‑oriented sectors often show more stability in slower economic periods, but may lag in booming, growth‑led markets where highly cyclical or speculative sectors race ahead.
Regions
- North America 100%
This breakdown covers the equity portion of your portfolio only.
Geographically, the portfolio is 100% in North America, effectively fully US‑centric. This is common for dividend and REIT strategies focused on a single market, and it keeps currency exposure simple for a US‑based investor. The flip side is that it doesn’t tap into growth or diversification from other regions, even though non‑US markets represent a large share of global stock market value. When everything is tied to one economy and one policy environment, local events and regulations can influence the entire portfolio at once, rather than being spread across different countries and currencies.
Market capitalization
- Large-cap 54%
- Mid-cap 29%
- Small-cap 8%
- Mega-cap 7%
- Micro-cap 2%
This breakdown covers the equity portion of your portfolio only.
By market capitalization, the portfolio leans clearly to larger companies: a majority in large caps, with meaningful mid‑cap exposure and smaller slices in small, micro, and mega caps. Large‑cap stocks are usually established businesses with more stable earnings, which can fit naturally with a dividend and quality tilt. The mid‑ and small‑cap portions add some growth and idiosyncratic behavior, helping diversification. The limited micro‑cap exposure keeps the portfolio away from the most volatile corner of the market. Overall, this mix suggests a focus on stability with a dash of smaller‑company dynamism, rather than a heavy bet on very small or very speculative names.
True holdings
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VR Vanguard REIT II Index Fund Institutional Plus Shares 2.88%
Part of fund(s):- Vanguard Real Estate Index Fund ETF Shares
-
HD The Home Depot Inc 2.66%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- iShares Core Dividend Growth ETF
-
PG Procter & Gamble Company 2.48%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- iShares Core Dividend Growth ETF
-
AB Abbott Laboratories 1.88%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
AM Amgen Inc 1.84%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
MR Merck & Company Inc 1.70%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
WE Welltower Inc 1.68%
Part of fund(s):- Vanguard Real Estate Index Fund ETF Shares
-
KO The Coca-Cola Company 1.68%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
UN UnitedHealth Group Incorporated 1.64%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
-
VZ Verizon Communications Inc 1.53%
Part of fund(s):- Schwab U.S. Dividend Equity ETF
- Top 10 total 19.98%
This breakdown covers the equity portion of your portfolio only.
Looking through the ETFs’ top holdings, a few names like Home Depot, Procter & Gamble, major health‑care companies, and big REITs show up as notable drivers, though top‑10 data only covers about 38% of the portfolio. Overlap means some companies may be owned through more than one ETF, which quietly increases concentration in those names even if they look small at the total‑portfolio level. Because we only see each ETF’s top 10, this overlap is likely understated. Still, the pattern suggests a cluster around large‑cap, cash‑generative businesses and big real estate operators, which is consistent with the portfolio’s dividend and quality focus.
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 strong tilts toward value, yield, quality, and low volatility, with size and momentum roughly market‑like. Factors are like investing “ingredients” — traits such as cheapness (value), stability (low volatility), or profitability (quality) that research links to long‑term returns. High value and yield scores reflect a preference for companies priced reasonably relative to fundamentals and paying meaningful dividends. Elevated quality and low‑volatility tilts point to financially solid and historically steadier stocks. Together, these tilts suggest the portfolio may hold up relatively well in choppy or down markets, but it can lag more aggressive growth or momentum‑driven rallies, as the past decade’s performance comparison hints.
Risk contribution
-
Schwab U.S. Dividend Equity ETF
Weight: 40.00% 39.3% -
iShares Core Dividend Growth ETF
Weight: 40.00% 39.2% -
Vanguard Real Estate Index Fund ETF Shares
Weight: 20.00% 21.6%
Risk contribution shows how much each ETF drives the portfolio’s overall ups and downs. Even though the two dividend equity ETFs each hold 40% weight, they contribute about 39% of risk each, while the 20% real estate ETF contributes slightly more than its share at around 22% of risk. A risk/weight ratio above 1 for the REIT fund means it’s somewhat more volatile than its slice suggests. With only three holdings, all of the portfolio’s risk is concentrated in this small set, but the broadly diversified nature of each ETF helps distribute risk internally across many companies and industries.
Redundant positions
-
High correlationSchwab U.S. Dividend Equity ETFiShares Core Dividend Growth ETF
The two dividend‑focused ETFs move almost identically, as shown by their very high correlation. Correlation measures how often and how strongly assets move together; when it’s close to 1, they tend to rise and fall in sync. That means those two funds behave almost like a single building block from a diversification standpoint, even though they are different products. The real estate ETF likely provides more differentiated behavior, especially around interest‑rate and property‑market shocks. Overall, the portfolio gets most of its diversification from mixing equity with real estate, rather than from holding equity funds that behave very differently from one another.
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‑versus‑return chart, the current portfolio sits below the efficient frontier curve, with a Sharpe ratio of 0.51. The Sharpe ratio is a way of comparing return to volatility after adjusting for a risk‑free rate, like checking how much “extra” return you get per unit of bumpiness. Here, both the minimum‑variance mix and the max‑Sharpe mix, using the same three ETFs in different weights, deliver higher Sharpe ratios around 0.77–0.79 at almost the same risk level. That means, in theory, simply reweighting these existing holdings could improve the tradeoff between volatility and expected return without adding new funds.
Dividends
- iShares Core Dividend Growth ETF 1.90%
- Schwab U.S. Dividend Equity ETF 3.00%
- Vanguard Real Estate Index Fund ETF Shares 3.50%
- Weighted yield (per year) 2.66%
The overall dividend yield is about 2.66%, with the equity ETFs yielding around 1.9% and 3.0%, and the REIT fund around 3.5%. Dividend yield is like the “cash interest” you collect from owning shares, before any price changes. This level of yield is higher than the broad US growth‑oriented market, reflecting the portfolio’s deliberate income tilt. Over time, reinvested dividends can be a big part of total return, especially in sideways markets where prices don’t move much. The tradeoff is that income‑focused portfolios sometimes favor mature businesses over fast‑growing ones, which can affect long‑term growth potential relative to the highest‑growth benchmarks.
Ongoing product costs
- iShares Core Dividend Growth ETF 0.08%
- Schwab U.S. Dividend Equity ETF 0.06%
- Vanguard Real Estate Index Fund ETF Shares 0.12%
- Weighted costs total (per year) 0.08%
Costs are impressively low, with total expense ratios of 0.08%, 0.06%, and 0.12% for the three ETFs, and a portfolio‑weighted TER of about 0.08%. TER is the annual fee charged by the funds, taken out before returns are reported, much like a small membership fee for professional management and index tracking. Keeping costs this low is a meaningful strength, because every fraction of a percent saved in fees stays in the portfolio to compound over time. This cost level aligns well with the cheapest broad index products on the market, giving the strategy a solid structural advantage compared with higher‑fee alternatives.
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