Balanced portfolio with a strong focus on US equities and high dividend yields
Report created on Jun 11, 2025Risk profile
4/7
Diversification profile
3/5
Positions
-
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 32.35% -
SC Schwab U.S. Large-Cap Growth ETF
SCHG - US8085243009 29.72% -
VW Vanguard FTSE Emerging Markets Index Fund ETF Shares
VWO - US9220428588 14.69% -
JE JPMorgan Equity Premium Income ETF
JEPI - US46641Q3323 8.43% -
JE JPMorgan Nasdaq Equity Premium Income ETF
JEPQ - US46654Q2030 7.95% -
JP J.P. Morgan Exchange-Traded Fund Trust
JPIE - US46641Q1590 6.87%
The portfolio is predominantly invested in U.S.-based ETFs, with a significant emphasis on large-cap and dividend-paying stocks. The allocation towards the Schwab U.S. Dividend Equity ETF and the Schwab U.S. Large-Cap Growth ETF together accounts for over 60% of the portfolio, indicating a strong bias towards stable, large-cap U.S. equities. The inclusion of the Vanguard FTSE Emerging Markets Index Fund ETF Shares introduces some geographic diversification, albeit modestly. The portfolio's structure suggests a balanced approach, aiming to capture growth while seeking income through dividends.
Growth
With a Compound Annual Growth Rate (CAGR) of 11.02% and a maximum drawdown of -16.63%, the portfolio has demonstrated robust growth with relatively moderate drawdowns. This performance, coupled with the fact that a few days contribute significantly to the portfolio's returns, underscores the impact of market timing and the benefits of long-term holding. Comparing this to benchmark indices would provide further context, but the historical performance suggests a well-executed strategy in balancing growth and risk.
Projection
Monte Carlo simulations, which use historical data to forecast potential future outcomes, indicate a wide range of possible performances for this portfolio. With the majority of simulations showing positive returns and a median projected increase of 245.1%, the portfolio appears well-positioned for future growth. However, it's important to note that these projections are speculative and depend heavily on past market behaviors, which are not guaranteed to repeat.
Asset classes
- Stocks 91%
- Bonds 6%
- Not classified 2%
- Cash 1%
The asset allocation shows a heavy tilt towards stocks (91%), with a minor allocation in bonds (6%) and very limited exposure to other asset classes. This composition aligns with a balanced to growth-oriented investment strategy, favoring the potential higher returns of equities over the stability of bonds or cash. However, the limited diversification across asset classes could expose the portfolio to higher volatility and risk associated with stock market fluctuations.
Sectors
- Technology 27%
- Consumer Discretionary 11%
- Financials 10%
- Health Care 9%
- Consumer Staples 9%
- Telecommunications 9%
- Industrials 7%
- Energy 7%
- Basic Materials 2%
- Utilities 1%
- Real Estate 1%
Sector allocation is diversified across technology, consumer cyclicals, and financial services, among others. The heavy weighting in technology (27%) is consistent with modern growth-oriented portfolios but may introduce higher volatility. The spread across consumer goods, healthcare, and energy sectors adds a layer of defensive positioning, balancing the portfolio's risk profile. This sectoral distribution supports a strategy that seeks to capitalize on growth while mitigating risks through diversification.
Regions
- North America 78%
- Asia Emerging 9%
- Asia Developed 3%
- Africa/Middle East 2%
- Latin America 1%
- Europe Developed 1%
Geographically, the portfolio is heavily weighted towards North America (78%), with emerging markets and other regions making up a smaller portion of the allocation. This North American focus aligns with the investor's region but may limit exposure to potential growth in emerging markets and developed markets outside of North America. Diversifying geographically could reduce region-specific risks and potentially enhance returns.
Market capitalization
- Large-cap 35%
- Mega-cap 33%
- Mid-cap 19%
- Small-cap 3%
- Micro-cap 1%
The market capitalization breakdown indicates a preference for big (35%) and mega-cap (33%) companies, with a smaller allocation towards medium, small, and micro-cap stocks. This emphasis on larger companies is likely a strategy to reduce volatility and capture stable growth, though it may limit potential high-growth opportunities in smaller-cap sectors.
Redundant positions
-
High correlationSchwab U.S. Large-Cap Growth ETFJPMorgan Nasdaq Equity Premium Income ETF
The high correlation between the Schwab U.S. Large-Cap Growth ETF and the JPMorgan Nasdaq Equity Premium Income ETF suggests redundancy, which may limit the portfolio's diversification benefits. Reducing overlap by reallocating assets from highly correlated positions to less correlated ones could enhance the portfolio's risk-adjusted returns.
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 portfolio's current setup suggests room for optimization, particularly by addressing the overlap in highly correlated assets. By doing so, the portfolio could achieve a more efficient risk-return profile, potentially increasing the expected return to 7.41% at a slightly higher risk level. This adjustment would align the portfolio closer to the Efficient Frontier, where the risk-return trade-off is optimized.
Dividends
- JPMorgan Equity Premium Income ETF 8.30%
- JPMorgan Nasdaq Equity Premium Income ETF 11.50%
- J.P. Morgan Exchange-Traded Fund Trust 5.90%
- Schwab U.S. Dividend Equity ETF 3.90%
- Schwab U.S. Large-Cap Growth ETF 0.40%
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 2.90%
- Weighted yield (per year) 3.83%
The portfolio's focus on dividend-yielding ETFs contributes significantly to its income generation, with a total yield of 3.83%. This strategy not only provides a steady income stream but also potentially offers a buffer against market volatility. However, investors should be mindful of the varying dividend yields and consider the growth prospects of high-dividend stocks versus those with lower yields but higher growth potential.
Ongoing product costs
- JPMorgan Equity Premium Income ETF 0.35%
- JPMorgan Nasdaq Equity Premium Income ETF 0.35%
- J.P. Morgan Exchange-Traded Fund Trust 0.41%
- Schwab U.S. Dividend Equity ETF 0.06%
- Schwab U.S. Large-Cap Growth ETF 0.04%
- Vanguard FTSE Emerging Markets Index Fund ETF Shares 0.08%
- Weighted costs total (per year) 0.13%
The Total Expense Ratio (TER) of 0.13% is impressively low, especially for a portfolio with a diverse range of ETFs. This cost efficiency is commendable as it enhances net returns over the long term. Investors should continue to monitor fees to ensure they remain competitive, as even small differences can have a significant impact over time.
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