High income focused us equity portfolio with strong value tilt and efficient risk profile
Report created on Mar 26, 2026Risk 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
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FX Fidelity 500 Index Fund
FXAIX - US3159117502 50.00% -
SC Schwab U.S. Dividend Equity ETF
SCHD - US8085247976 30.00% -
SP SHP ETF Trust - NEOS S&P 500 High Income ETF
SPYI - US78433H3030 20.00%
This portfolio is built from just three positions, all in broad US stocks: a large core index fund, a sizeable dividend ETF, and a high‑income options‑enhanced ETF. Together they create a 100% stock portfolio with a strong income overlay rather than any bonds or cash buffer. That structure matters because it drives how the account behaves in crashes and rallies: all upside and downside comes from equities. The clear positive is simplicity and easy oversight. The tradeoff is that “balanced” here means factor and income balance within stocks, not balance across different asset classes, so short‑term swings can still feel very equity‑heavy.
Growth
From late 2022 to early 2026, the portfolio turned $1,000 into about $1,615, for a compound annual growth rate (CAGR) of 14.5%. CAGR is the “average yearly speed” over the whole journey, smoothing out bumps. Over the same period, US and global equity benchmarks did a bit better, around 16–17% per year. Your max drawdown, the worst peak‑to‑trough fall, was about ‑16.7%, slightly milder than the US market’s drop. This shows the mix has given up some upside compared with pure market exposure, likely in exchange for income and slightly softer falls, which is a reasonable tradeoff for many investors.
Projection
The Monte Carlo simulation projects many possible futures by “remixing” historical returns to see a range of outcomes. Think of it as running the next 10 years 1,000 different ways using past behavior as the guide. In these simulations, all scenarios ended positive, with a median total gain around 540% and a 5th percentile outcome of roughly 159% over 10 years. That suggests historically strong return potential but also a wide range of paths. Importantly, simulations are not promises; they assume the future behaves somewhat like the past. Structural market changes, policy shifts, or prolonged bear markets could lead to very different real‑world results.
Asset classes
- Stocks 100%
All of the portfolio sits in stocks, with no bonds, cash, or alternatives above the 2% threshold. Asset classes are the big buckets—like stocks, bonds, and real estate—that respond differently to economic cycles. Being 100% in one bucket maximizes participation in equity growth but also fully exposes the account to stock market downturns. This is structurally more aggressive than what many “balanced” or “moderate” profiles use, even if the holdings themselves are diversified across companies. Anyone using a structure like this often relies on time horizon, outside cash reserves, or other accounts for shock absorption rather than bonds within the portfolio.
Sectors
- Technology 27%
- Health Care 11%
- Financials 11%
- Telecommunications 9%
- Energy 9%
- Consumer Staples 9%
- Industrials 9%
- Consumer Discretionary 5%
- Consumer Discretionary 5%
- Basic Materials 2%
- Utilities 2%
- Real Estate 1%
Sector exposure is fairly broad across technology, healthcare, financials, communication services, energy, consumer defensive, industrials, and more, with technology the single largest slice at 27%. This mix looks quite similar to common US equity benchmarks, which is a strong sign of mainstream diversification by industry. Tech‑heavy allocations can be more sensitive to interest rates and innovation cycles, while energy and defensives may help when growth names cool off. The fact that several sectors sit near mid‑single‑ to low‑double‑digit weights supports resilience across different economic environments, rather than betting heavily on just one theme or story.
Regions
- North America 99%
- Europe Developed 1%
Geographically, the portfolio is almost entirely in North America, at roughly 99%, with just a sliver in developed Europe. Geography matters because different regions experience unique political, currency, and economic cycles. A home‑biased approach like this closely tracks the US economy and dollar, which has been beneficial in recent decades. However, it also means missing potential diversification from other markets that might perform differently when the US lags. Sticking mostly to one region simplifies tax, currency, and information issues, but investors who want global diversification often choose to introduce some non‑US exposure over time to broaden risk sources.
Market capitalization
- Large-cap 43%
- Mega-cap 32%
- Mid-cap 22%
- Small-cap 2%
- Micro-cap 1%
The portfolio tilts strongly toward large and mega‑cap companies, with about 75% in big and mega caps, and only a small slice in small and micro caps. Market capitalization (or “market cap”) describes company size by stock market value. Large caps tend to be more established and liquid, often making them less volatile and more stable than smaller firms, but sometimes with slower explosive growth. The modest allocation to mid and small caps adds some growth potential and diversification without dominating overall behavior. This cap structure is very close to mainstream US index profiles, which supports smooth trading and broad coverage of the economy.
True holdings
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0 NVIDIA CORP 3.69%
Part of fund(s):- Fidelity 500 Index Fund
-
1 APPLE INC 3.54%
Part of fund(s):- Fidelity 500 Index Fund
-
2 MICROSOFT CORP 3.13%
Part of fund(s):- Fidelity 500 Index Fund
-
3 AMAZON.COM INC 1.94%
Part of fund(s):- Fidelity 500 Index Fund
-
4 BROADCOM INC 1.62%
Part of fund(s):- Fidelity 500 Index Fund
-
5 ALPHABET INC CL A 1.59%
Part of fund(s):- Fidelity 500 Index Fund
-
NV NVIDIA Corporation 1.52%
Part of fund(s):- SHP ETF Trust - NEOS S&P 500 High Income ETF
-
CV Chevron Corp 1.49%
Part of fund(s):- SHP ETF Trust - NEOS S&P 500 High Income ETF
- Schwab U.S. Dividend Equity ETF
-
AA Apple Inc 1.30%
Part of fund(s):- SHP ETF Trust - NEOS S&P 500 High Income ETF
-
VZ Verizon Communications Inc 1.29%
Part of fund(s):- SHP ETF Trust - NEOS S&P 500 High Income ETF
- Schwab U.S. Dividend Equity ETF
- Top 10 total 21.10%
Looking through the funds’ top holdings, the largest underlying exposures are familiar mega‑cap names like NVIDIA, Apple, Microsoft, Amazon, and Alphabet. Several appear multiple times across the three funds, so the true exposure to a handful of giants is higher than any single line suggests. Overlap analysis only uses top‑10 ETF holdings, so total duplication is probably understated. This kind of hidden concentration is normal in US‑centric fund portfolios, but it does mean a lot of long‑term success hinges on a relatively small universe of large companies. Being aware of this reliance helps set expectations during tech‑driven booms and pullbacks.
Factors
Factor exposure shows strong tilts toward value, yield, and low volatility, with moderate momentum. Factors are traits—like cheapness (value) or stability (low volatility)—that academic research links to long‑term return and risk patterns. A high yield and value tilt often means favoring stocks with solid cash flows and dividends at reasonable prices, while low volatility leans toward steadier names that typically swing less. This combo can shine in choppier or sideways markets and help dampen drawdowns, but may lag during speculative growth surges. The lower signal coverage suggests the picture is partial, yet the dominant income‑oriented, defensive tilt is still clear.
Risk contribution
-
Fidelity 500 Index Fund
Weight: 50.00% 56.0% -
Schwab U.S. Dividend Equity ETF
Weight: 30.00% 26.5% -
SHP ETF Trust - NEOS S&P 500 High Income ETF
Weight: 20.00% 17.5%
Risk contribution shows how much each holding drives overall volatility, which can differ from its percentage weight. Here, the core index fund is 50% of the portfolio but contributes about 56% of the total risk, a slightly outsized role. The dividend and high‑income ETFs each contribute a bit less risk than their weights, suggesting they modestly soften overall swings. This balance is generally healthy: the main broad market anchor understandably dominates, while satellite income positions add flavor without spiking volatility. Rebalancing occasionally—nudging positions back toward intended weights—can help keep any single sleeve from slowly drifting into an overly dominant risk driver.
Redundant positions
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High correlationFidelity 500 Index FundSHP ETF Trust - NEOS S&P 500 High Income ETF
The core S&P 500 index fund and the NEOS S&P 500 High Income ETF are highly correlated, meaning they tend to move up and down together. Correlation is a measure from ‑1 to 1; the closer to 1, the more assets behave alike. High correlation limits diversification because in sharp downturns, both pieces often fall at the same time. In practice, this means the options‑based income ETF is adding more to income profile than to true risk diversification relative to the index fund. That’s not inherently bad, but it highlights that the portfolio’s diversification mainly comes from sector and factor mix, not from uncorrelated assets.
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 sits on the efficient frontier, meaning that for its mix of holdings, the weights are already using risk quite effectively. The efficient frontier is the curve of best possible returns for each risk level. Your Sharpe ratio—a measure of return per unit of volatility—is 0.89, close to the minimum‑variance portfolio’s 0.93 and the optimal portfolio’s 0.99. The model suggests that modest reweighting of the same three funds could push expected return up to around 17% with higher but still reasonable risk, or downshift risk slightly with only a modest return haircut, giving flexibility if priorities change.
Dividends
- Fidelity 500 Index Fund 1.20%
- Schwab U.S. Dividend Equity ETF 3.40%
- SHP ETF Trust - NEOS S&P 500 High Income ETF 13.60%
- Weighted yield (per year) 4.34%
The overall yield is about 4.34%, coming from a low‑yield broad index fund, a moderate‑yield dividend ETF, and a very high‑yield income ETF. Dividend yield measures yearly cash payouts as a percentage of the current investment value. A yield in this range can be attractive for investors seeking regular cash flow, helping to cover withdrawals or be reinvested to compound faster. Higher income strategies can sometimes trade off some price growth or introduce strategy‑specific risks, so it’s useful to think of yield as part of total return, not a free lunch. Still, this is a clearly income‑oriented equity setup that many retirees or cash‑focused investors appreciate.
Ongoing product costs
- Fidelity 500 Index Fund 0.02%
- Schwab U.S. Dividend Equity ETF 0.06%
- SHP ETF Trust - NEOS S&P 500 High Income ETF 0.68%
- Weighted costs total (per year) 0.16%
The blended expense ratio of roughly 0.16% is impressively low, driven by the ultra‑cheap core index fund and a reasonably priced dividend ETF, with a somewhat higher‑cost high‑income ETF rounding things out. The total expense ratio (TER) is the annual fee charged by the funds, quietly deducted from performance. Keeping this number low is powerful: over decades, saving even a fraction of a percent can translate into thousands more in your account. Here, the fee drag is minimal relative to many actively managed or complex strategies, which supports better long‑term compounding and is a real strength of the current fund lineup.
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