Med-High30s–50s

Sector Weight Optimized Portfolio

Optimal sector weights determined using the Kelly criterion and risk budgeting

Expected Return

9-12% annually

Expected Dividend

1.8% annually

Rebalancing

Monthly

Asset Allocation

XLK (30%)

XLV (20%)

XLF (15%)

XLY (15%)

VNQ (10%)

XLE (10%)

XLK

Technology sector at optimal weight

30%

XLV

Healthcare as defensive allocation

20%

XLF

Financials benefiting from interest rates

15%

XLY

Consumer discretionary

15%

VNQ

Real estate diversification

10%

XLE

Energy as inflation hedge

10%

Advantages

✓Kelly criterion-based allocation
✓Broad sector diversification
✓Risk-optimized weighting

Risks

!Frequent rebalancing required
!Requires active sector rotation monitoring

Allocation by Investment Amount

If investing $1,000

XLK$300

XLV$200

XLF$150

XLY$150

VNQ$100

XLE$100

If investing $5,000

XLK$1500

XLV$1000

XLF$750

XLY$750

VNQ$500

XLE$500

If investing $10,000

XLK$3000

XLV$2000

XLF$1500

XLY$1500

VNQ$1000

XLE$1000