High dividend equity portfolio emphasizing value stability and income with modest global and sector diversification
Report created on May 1, 2024Risk profile
4/7
Diversification profile
3/5
Positions
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VY Vanguard High Dividend Yield Index Fund ETF Shares
VYM - US9219464065 100.00%
The portfolio is extremely simple: one high dividend equity ETF holds 100% of the assets. That means a single product drives every aspect of behavior — returns, risk, income, and diversification. Simplicity like this is easy to manage and track, and it reduces the chances of unintended overlaps between multiple funds. The trade-off is that there is no internal balance between different asset types such as bonds or cash, so all volatility comes from stocks. For someone using this in a broader plan, this kind of “pure equity income block” can work well if it is combined with more conservative holdings elsewhere.
Growth
Over the last decade, $1,000 grew to about $2,870, a compound annual growth rate (CAGR) of 11.14%. CAGR is the “average speed” of growth per year, smoothing out ups and downs. This trailed the US market by 2.68% per year but was roughly in line with the global market. The max drawdown of -35.19% shows the worst peak‑to‑trough fall, similar to broad markets. That means this approach didn’t meaningfully shield against major crashes, despite its income tilt. The takeaway: the portfolio has delivered solid absolute growth with a slight performance trade-off relative to a pure broad US index.
Asset classes
- Stocks 100%
The allocation is 100% in stocks, with zero exposure to bonds, cash, or alternative assets. That creates a clear growth-and-income profile but also full participation in equity market swings. Compared with many “balanced” allocations that mix in bonds, this setup will typically rise more in strong markets and fall more during sharp selloffs. The plus side is long‑term return potential and a meaningful dividend stream; the downside is the need to tolerate sizeable drawdowns. Investors often pair a pure-equity holding like this with separate bond or cash positions to shape their overall risk to their comfort level.
Sectors
- Financials 19%
- Technology 15%
- Health Care 13%
- Industrials 13%
- Consumer Staples 12%
- Energy 10%
- Consumer Discretionary 7%
- Utilities 6%
- Telecommunications 3%
- Basic Materials 2%
Sector exposure is broadly spread, with financials, technology, health care, and industrials each playing meaningful roles, and consumer staples, energy, and utilities providing defensive balance. No sector dominates overwhelmingly, which is a strong indicator of sound diversification. Compared with very growth-heavy portfolios, this mix leans a bit more toward traditional, cash‑generating businesses, which often handle inflation and mature economic cycles better. However, it may lag more aggressive growth areas during speculative booms. This allocation is well-balanced and aligns closely with global standards, giving a nice blend of cyclical and defensive sectors without an extreme bet on any single theme.
Regions
- North America 98%
- Europe Developed 1%
Geographically, exposure is almost entirely in North America, with a small allocation to developed Europe and effectively nothing elsewhere. That creates a strong bet on one economic region’s companies, regulations, currencies, and political environment. This has worked very well over the last decade, but it does leave less diversification against regional shocks or policy changes. Many global benchmarks spread more across multiple regions. A practical takeaway: if someone already has a lot of home‑country exposure in other accounts, they might consider whether this additional North American tilt is intentional or if more global balance is desirable overall.
Market capitalization
- Large-cap 51%
- Mid-cap 23%
- Mega-cap 19%
- Small-cap 5%
- Micro-cap 1%
Market capitalization exposure is dominated by large and mega-cap companies, which together make up about 70% of the portfolio. Mid-caps have a healthy slice, while small and micro-cap stocks are only a minor component. Larger companies tend to offer more stability, established cash flows, and often more predictable dividends, but they may grow slower than smaller, more nimble firms. This tilt helps keep volatility more manageable and aligns closely with many broad market benchmarks. For someone seeking smoother rides and reliable income rather than aggressive growth, this size mix is a constructive and reassuring feature.
True holdings
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AV Broadcom Inc 6.51%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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JP JPMorgan Chase & Co 3.38%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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XO Exxon Mobil Corp 2.84%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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JN Johnson & Johnson 2.64%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
-
WM Walmart Inc. Common Stock 2.46%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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AB AbbVie Inc 1.81%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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PG Procter & Gamble Company 1.73%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
-
HD The Home Depot Inc 1.67%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
-
CV Chevron Corp 1.54%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
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CA Caterpillar Inc 1.52%
Part of fund(s):- Vanguard High Dividend Yield Index Fund ETF Shares
- Top 10 total 26.10%
Looking through the ETF’s top holdings, exposure is spread across large, established companies like Broadcom, JPMorgan, Exxon, and Johnson & Johnson. No single stock dominates, with the largest position under 7% of the ETF and everything else smaller. Because only the top 10 holdings are visible, true diversification is actually wider than shown here. Overlap risk from owning the same stock in multiple funds is nonexistent inside this specific portfolio, since there is only one ETF. Overall, the look‑through information suggests concentration is mainly at the fund level, not at the single‑stock level.
Factors
Factor exposure shows strong tilts toward value, yield, and low volatility, with other factors roughly neutral. Factors are characteristics like “cheap vs. expensive” or “stable vs. jumpy” that research links to long-term returns. A high value score means the portfolio favors companies trading at lower prices relative to fundamentals, which can outperform over long horizons but may lag during growth-led rallies. High yield reflects a clear focus on dividend payers, supporting income but sometimes at the cost of rapid growth. The strong low volatility tilt suggests a design aiming for somewhat smoother equity returns, especially versus high‑octane growth styles.
Risk contribution
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Vanguard High Dividend Yield Index Fund ETF Shares
Weight: 100.00% 100.0%
Because there is only one holding, that single ETF contributes 100% of portfolio risk. Risk contribution measures how much each position adds to the overall ups and downs, which can differ from its percentage weight. Here, weight and risk contribution are identical: if this ETF is volatile, the entire portfolio is volatile; if it’s steady, the portfolio is steady. The positive angle is clarity — there are no hidden risk hotspots between multiple funds. The main consideration is at the higher, “total plan” level: deciding what share of a broader net worth should sit in this type of equity exposure.
Dividends
- Vanguard High Dividend Yield Index Fund ETF Shares 2.40%
- Weighted yield (per year) 2.40%
The ETF’s dividend yield of about 2.40% provides a steady income layer on top of price returns. Yield is the annual cash payout as a percentage of the current price. For investors wanting ongoing cash flow — for example to supplement salary or, later, retirement spending — this yield can be attractive compared with very growth-focused funds that pay little or no dividends. That said, dividends are not guaranteed and can be cut in bad economic periods. Overall, this is a reasonable, sustainable-looking yield that fits the high dividend strategy without stretching into very high, potentially fragile payout territory.
Ongoing product costs
- Vanguard High Dividend Yield Index Fund ETF Shares 0.06%
- Weighted costs total (per year) 0.06%
The total expense ratio (TER) of 0.06% is impressively low. TER is the annual fee charged by the fund manager, expressed as a percentage of assets. Over long timeframes, even small differences in fees compound significantly, so keeping costs lean directly supports better net performance. Relative to many active funds and even some other ETFs, this cost level is very competitive and firmly in “best practice” territory. This aspect of the setup is a clear strength: the strategy captures a specific style tilt — high dividend, value, and low volatility — while giving up only a tiny slice of returns to fees each year.
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