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Dividend Income Portfolio

Last updated Mar 2, 2024

The Dividend Income Portfolio is a well-rounded, income-focused investment strategy that combines three key income-producing asset classes: high-yield corporate bonds, real estate, and dividend-paying equities. By allocating equal portions to the iShares iBoxx $ High Yield Corporate Bond ETF (HYG), the Vanguard Real Estate ETF (VNQ), and the Invesco High Yield Equity Dividend Achievers™ ETF (PEY), this portfolio aims to generate a consistent stream of income with an emphasis on dividends while offering the potential for capital appreciation.

The HYG component provides exposure to a diversified pool of high-yield corporate bonds, offering attractive yields. The VNQ allocation grants investors access to a wide range of real estate investment trusts (REITs), known for their steady income generation through dividends and property appreciation. Lastly, the PEY portion targets high-quality dividend-paying stocks with a history of increasing their dividends over time.

This portfolio is designed for investors seeking a balance between income generation through dividends and capital appreciation, with a higher risk tolerance than conservative income-focused investors.

Asset Allocation


HYG 33.33%PEY 33.33%VNQ 33.33%BondBondEquityEquityReal EstateReal Estate
PositionCategory/SectorWeight
HYG
iShares iBoxx $ High Yield Corporate Bond ETF
High Yield Bonds

33.33%

PEY
Invesco High Yield Equity Dividend Achievers™ ETF
All Cap Equities, Dividend

33.33%

VNQ
Vanguard Real Estate ETF
REIT

33.33%

S&P 500

Performance

The chart shows the growth of an initial investment of $10,000 in Dividend Income Portfolio, comparing it to the performance of the S&P 500 index or another benchmark. All prices have been adjusted for splits and dividends. The portfolio is rebalanced Quarterly


100.00%150.00%200.00%250.00%OctoberNovemberDecember2024FebruaryMarch
150.84%
257.02%
Dividend Income Portfolio
Benchmark (^GSPC)
Portfolio components

The earliest data available for this chart is Apr 11, 2007, corresponding to the inception date of HYG

Returns

As of Mar 2, 2024, the Dividend Income Portfolio returned -2.37% Year-To-Date and 6.50% of annualized return in the last 10 years.


Year-To-Date1 month6 months1 year5 years (annualized)10 years (annualized)
^GSPC
S&P 500
7.70%6.01%13.76%29.03%12.89%10.63%
Dividend Income Portfolio-2.37%0.45%3.71%4.98%5.22%6.61%
HYG
iShares iBoxx $ High Yield Corporate Bond ETF
0.80%0.56%6.02%9.59%3.13%3.29%
VNQ
Vanguard Real Estate ETF
-2.03%2.63%7.24%3.98%4.42%6.26%
PEY
Invesco High Yield Equity Dividend Achievers™ ETF
-5.94%-1.88%-2.40%0.65%6.91%9.47%

Monthly Returns Heatmap


JanFebMarAprMayJunJulAugSepOctNovDec
2024-2.97%0.29%
20230.03%-5.26%-3.00%8.15%7.20%

Sharpe Ratio

The current Dividend Income Portfolio Sharpe ratio is 0.50. A Sharpe ratio between 0 and 1.0 is considered sub-optimal.

0.002.004.000.50

The Sharpe ratio of Dividend Income Portfolio is in the bottom 25%, suggesting that this portfolio isn't performing as well in terms of risk-adjusted returns compared to many others. This could be due to lower returns, higher volatility, or both. It might be an indication that the portfolio needs fine-tuning.


Rolling 12-month Sharpe Ratio0.000.501.001.502.002.50OctoberNovemberDecember2024FebruaryMarch
0.50
2.44
Dividend Income Portfolio
Benchmark (^GSPC)
Portfolio components

Dividend yield

Dividend Income Portfolio granted a 4.95% dividend yield in the last twelve months.


TTM20232022202120202019201820172016201520142013
Dividend Income Portfolio4.95%4.76%4.48%3.47%4.37%4.05%4.87%4.19%4.40%4.42%4.18%4.57%
HYG
iShares iBoxx $ High Yield Corporate Bond ETF
5.76%5.74%5.30%4.02%4.88%4.99%5.54%5.12%5.27%5.90%5.69%6.10%
VNQ
Vanguard Real Estate ETF
4.03%3.95%3.91%2.56%3.93%3.39%4.74%4.23%4.82%3.92%3.60%4.32%
PEY
Invesco High Yield Equity Dividend Achievers™ ETF
5.05%4.58%4.22%3.83%4.30%3.78%4.33%3.21%3.12%3.44%3.24%3.28%

Expense Ratio

The Dividend Income Portfolio has a high expense ratio of 0.38%, indicating higher-than-average management fees. Below you can find the expense ratios of portfolio funds side-by-side and effortlessly compare their relative costs.


0.50%1.00%1.50%2.00%0.53%
0.50%1.00%1.50%2.00%0.12%

Risk-Adjusted Performance

This table presents a comparison of risk-adjusted performance metrics for positions. Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.


Sharpe ratioSortino ratioOmega ratioCalmar ratioUlcer Index
^GSPC
S&P 500
2.44
Dividend Income Portfolio
0.50
HYG
iShares iBoxx $ High Yield Corporate Bond ETF
1.63
VNQ
Vanguard Real Estate ETF
0.35
PEY
Invesco High Yield Equity Dividend Achievers™ ETF
0.08

Asset Correlations Table

The table below displays the correlation coefficients between the individual components of the portfolio, the entire portfolio, and the chosen benchmark.

HYGVNQPEY
HYG1.000.490.54
VNQ0.491.000.70
PEY0.540.701.00

Drawdowns Chart

The Drawdowns chart displays portfolio losses from any high point along the way.


-15.00%-10.00%-5.00%0.00%OctoberNovemberDecember2024FebruaryMarch
-5.46%
0
Dividend Income Portfolio
Benchmark (^GSPC)
Portfolio components

Worst Drawdowns

The table below displays the maximum drawdowns of the Dividend Income Portfolio. A maximum drawdown is a measure of risk, indicating the largest reduction in portfolio value due to a series of losing trades.

The maximum drawdown for the Dividend Income Portfolio was 59.63%, occurring on Mar 6, 2009. Recovery took 723 trading sessions.

The current Dividend Income Portfolio drawdown is 5.46%.


Depth

Start

To Bottom

Bottom

To Recover

End

Total

-59.63%Apr 26, 2007470Mar 6, 2009723Jan 18, 20121193
-35.33%Feb 18, 202025Mar 23, 2020223Feb 9, 2021248
-19.08%Jan 5, 2022192Oct 10, 2022
-11.45%Sep 14, 201870Dec 24, 201833Feb 12, 2019103
-10.13%Feb 6, 2015256Feb 11, 201623Mar 16, 2016279

Volatility Chart

The current Dividend Income Portfolio volatility is 3.63%, representing the average percentage change in the investments's value, either up or down over the past month. The chart below shows the rolling one-month volatility.


2.00%3.00%4.00%5.00%6.00%OctoberNovemberDecember2024FebruaryMarch
3.63%
3.47%
Dividend Income Portfolio
Benchmark (^GSPC)
Portfolio components
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