Introduction

Welcome to this transparent and accessible investment portfolio hosted on eToro.

This is what I might be referring to when I mention The Dividend Experiment portfolio or The Public Portfolio

The primary goal is to offer you an open view into my dividend investing philosophy and the portfolio’s performance, ensuring full transparency. Unlike traditional stock analyses, this portfolio provides real-time updates, aligning with the market’s opening hours.

You will be able to see what I got wrong without me hiding anything, and you will be able to see the wins within the appropriate context. If you have been watching Finance YouTube you will see this is quite rare to see!

Another key reason I chose eToro is its live functionality, allowing you to copy the portfolio at your discretion.

So, the option is yours – you can simply view and follow its progress or actively copy and benefit from the same strategy as me.

On top of that, you are very welcome to ask questions about future moves or for an explanation of past moves.

That can be done on eToro itself or via the Discord.

Risk Assessment and Transparency

To enhance your understanding of the strategy’s performance, eToro provides a comprehensive track record. This includes monthly and two-year returns, a risk score, and insights into drawdowns.

Hosting the portfolio on eToro ensures that you, the viewer, can assess the strategy’s efficacy and risk profile.

Feel free to ask questions and utilize this portfolio as a learning tool.

The risk score, a vital metric in assessing investment risk, remains a key focus, aiming to maintain a level below 5 at all times, realistically hovering around 3 to 4.

Due to the hedging nature of this portfolio, the portfolio should make a more stable investment and is aiming for lower drawdowns than the majority of offerings on this platform.

Dividends

eToro sadly no longer pays out CopyDividends.

It used to be the case that if I withdrew funds from the portfolio it would be treated as a dividend for copiers.

Their new system allows me to add or withdraw as much as I want without impacting your copy. It will simply rebalance your portfolio for you.

The good news is that this means that you no longer have to wait until your dividend hits $200 to reinvest, as it is now done for you internally.

Target Allocation:

  • 65% Dividend ETFs
  • 10% REITs (Real Estate Investment Trusts)
  • 10% Energy & Materials
  • 5% BDCs & Financials
  • 5% Utilities
  • 3% Covered Call ETFs
  • (<2%) Residual Cash

Rebalancing will occur semi-annually or when allocations have drifted too far from this range.

Natural Dividend Payers

As you can see there is a great focus on what I call Natural Dividend Payers here. If you are not sure what that is then watch the video or read the write-up in the link as it’s a key idea for The Dividend Experiment.

Natural dividend payers tend to have lower volatility and higher yields, though the cost of that is lower rates of growth. For this reason, I have kept the majority of the portfolio in a low-cost dividend ETF, currently, that is $SCHD.

Because this is already such a big proportion of the portfolio, I don’t feel the need to invest in individual Consumer Cyclical stocks, Industrials, Tech, etc. I think the benefit of the diversification of the ETF paired with the higher-yielding Natural Dividend Payers outweighs the benefit and risk of investing in individual companies that don’t fit those criteria.

Cash

My personal philosophy is that more often it is better to invest available cash rather than trying to time positions or waiting for an opportune moment. That being said, there have been and likely to be occasions where the portfolio is holding a larger than expected amount of cash and this is simply waiting to either be distributed to copiers, used in the next investment, or in the process of rebalancing.

My target is to keep this cash that is ‘waiting’ to under 2% of the portfolio.

The more we have invested in the market the better in my opinion.

Volatility

This portfolio is aiming to be an income portfolio above all else and something important that income investors should be considering is to minimise the volatility of the portfolio. Although it doesn’t matter if there are huge swings in the portfolio if you aren’t selling… we still don’t want to be forced to sell in a down market.

As a lot of investors looking for income are also looking to spend that money they may well be moving money around or selling off parts of the portfolio depending on their current lifestyle.

I aim to reduce the amount of volatility to keep the portfolio value at a steady increase over time. This does mean that we won’t be shooting the lights out with huge returns but that isn’t the goal with a portfolio like this anyway.

If you are looking for even higher (and riskier) returns, this portfolio would make a good complement to other Popular Investors™ that are copied by Copytraders and can be thought of as the ballast in a ship keeping your overall holdings steady as well providing regular income.

I am aiming for a risk score below 5 at all times and realistically should be around 3 to 4 for the majority of the time.

ESG Concerns

Due to the already imposed limitations of providing income at an above-market level rate coupled with the limiting amount of investing instruments available on eToro, sadly no adjustments will be made in concern to ESG.

This also means that the portfolio is unlikely to be fully compliant with Sharia law or Halal investing requirements.

Final Considerations

Due to the nature of this portfolio, it is reasonable to begin copying at any time, however, the minimum investment period should be one year (preferably longer) to receive the full benefit of this type of portfolio.

It is possible and you are free to stop copying at any time, however.

Withdrawing early puts you at risk of short-term price fluctuations which are not accounted for during portfolio construction.

The minimum copy value is now $200. Investing more in this portfolio will naturally provide a higher income.

Hope you enjoy your time copying this portfolio and gaining value from it.

If you have further questions please email me at:

TheDividendExperiment@gmail.com

Sound interesting?

You can actually have this portfolio yourself if you want! All you need to do is copy the portfolio on eToro and you will mirror my returns and dividends!

eToro disclaimer:

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

eToro is a multi-asset platform that also includes investing in stocks and crypto assets, as well as trading CFDs. CFDs are administrative financial instruments. Because of the leverage, they run some risk of losing money quickly. 67% of private investor accounts lose money when trading CFDs with this provider. You’ve heard if you understand how CFDs have become and if you can afford to take the high risk of losing your money. CopyPortfolios is a portfolio management service from eToro Europe Ltd. CopyPortfolios should not be classified as Exchange Traded Funds (ETFs) or as hedge funds. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

Affiliate disclaimer:

Some of the links on this page are affiliate links meaning that I may be compensated if you were to follow the link and sign up. This comes at no extra cost to but helps to run The Dividend Experiment website and YouTube channel