Quarterly Rebalance Note

Q3 2026 Rebalance — Balanced Dividend Strategy

Portfolio 771 · quality exits, drift trims, replacements, and any policy updates documented before trades were entered. Whole-share trades only.

Executed · Jul 2026

$95,985

Portfolio value (pre-trade)

+0.4%

Since Jan 1 · DGRO +11.5%

2.7%

Fwd yield · target 3.0%

Sell orders

$-9,378

Net proceeds deployed

The trades

Trade list — 9 sells, 11 buys

Full exits fire on mandate/quality screens (FCF payout, growth floor, or dual-mandate yield). Trims fire on the ±20% drift band ( trim above 6%, add below 4%).

Action	Ticker	Why	Shares	Est. $
SELL ALL	TXN	C — FCF 192%, 3y CAGR 4.9%	26	−$7,759
SELL ALL	AVGO	Dual-mandate — yield 0.70% < 1.5%	16	−$5,909
SELL ALL	EMR	C — 5y CAGR 1.3%, 3y decel	38	−$5,302
SELL ALL	BLK	C — FCF 94%, 3y decel	5	−$4,902
SELL ALL	PG	C — FCF 70%, 3y decel	33	−$4,865
TRIM	JPM	6.26% · over 6% cap — trim 2 sh	2	−$668
SELL ALL	ABBV	Payout 65.4% + sector trim	23	−$5,774
SELL ALL	MCD	Consumer Cyclical trim + payout flag	15	−$4,041
SELL ALL	HD	Consumer Cyclical trim + payout flag	15	−$5,263
BUY	WM	Replaces EMR	24	+$5,378
BUY	TROW	Replaces BLK (53 sh total position)	53	+$6,154
BUY	KO	Replaces PG	62	+$5,040
BUY	AFL	Financials depth	46	+$5,451
BUY	ROL	Consumer Cyclical compounder (104 sh total)	104	+$4,440
BUY	ADM	Consumer Defensive / agriculture	90	+$6,911
BUY	CSCO	Tech sleeve — 80 sh @ $117 (Jul 2026)	80	+$9,361
BUY	ELV	Healthcare — managed care	10	+$4,162
BUY	ZTS	Healthcare — animal health	60	+$4,347
BUY	ACN	ADD band — top up 13 sh	13	+$1,786
BUY	CMCSA	ADD band — top up 35 sh	35	+$833

+$44,484

Proceeds from sells

−$53,861

Deployment to buys

$-9,378

Residual to deploy

Same-day execution

Enter every sell and buy in one session. Manual portfolios do not track cash — unmatched sells look like withdrawals and corrupt NAV. Size buys so proceeds ≈ deployment; if a few dollars remain, add a band-edge top-up (not a separate withdrawal).

New positions

Replacements — 7 new ~5% slots (~$4,799 each)

WM · Industrials

1.6% · 8.6% CAGR

Replaces EMR — essential services, dual mandate pass.

TROW · Financial Services

4.4% · 38y streak

Replaces BLK — asset manager, payout inside ceiling.

KO · Consumer Defensive

2.5% · 24y streak

Replaces PG — staples income, dual pass.

AFL · Financial Services

2.0% · 15.7% CAGR

Financials depth after BLK exit.

CSCO · Technology

1.5% · 7.1% CAGR

Tech sleeve after TXN/AVGO exits — sized to 80 sh (~9% weight).

ELV · Healthcare

1.7% · 12.5% CAGR

Healthcare depth after ABBV exit.

ZTS · Healthcare

2.8% · 20.1% CAGR

Animal health — growth + yield.

Policy amendment — July scope — mandate exits only (Q3 2026)

Blended book passed January floors pre-trade (yield 2.70%, growth 8.1%). July rotated C-verdict names and dual-mandate failures (TXN, AVGO, EMR, BLK, PG), trimmed JPM, and exited cyclical/payout flags (HD, MCD, ABBV). Payout-only watchlist names not held through July were already sold or never re-added. Post-trade book passes all sector bands and blended audit (yield 2.78%, growth 9.1%).

Income Growth: Quality Exit for multi-screen failures (765 precedent). Balanced: Dual-Mandate Exit when yield or growth dimension fails at the quarterly screen.

Diagnosis

Holdings — pre-trade weights

Ticker	Sector	Weight	Streak	Status
TXN	Technology	8.08%	22	EXIT
JPM	Financial Services	6.26%	15	TRIM
AVGO	Technology	6.16%	15	EXIT
ABBV	Healthcare	6.02%	12	EXIT
ADP	Industrials	5.89%	24+	hold
MRK	Healthcare	5.62%	15	hold
JNJ	Healthcare	5.56%	24+	hold
EMR	Industrials	5.52%	24+	EXIT
HD	Consumer Cyclical	5.48%	16	EXIT
ITW	Industrials	5.32%	24+	hold
BLK	Financial Services	5.11%	16	EXIT
PG	Consumer Defensive	5.07%	24+	EXIT
NEE	Utilities	4.86%	24+	hold
PEP	Consumer Defensive	4.56%	24+	hold
ABT	Healthcare	4.42%	12	hold
CVX	Energy	4.32%	24+	hold
MCD	Consumer Cyclical	4.21%	24+	EXIT
CMCSA	Communication Services	4.13%	6	hold
ACN	Technology	3.42%	6	band edge

Allocation

Sector weight vs. target (pre-trade)

Healthcare

Target: 20%21.6%

Technology

Target: 15%17.7%

Industrials

Target: 15%16.7%

Consumer Defensive

Target: 15%9.6%

Financial Services

Target: 15%11.4%

Energy

Target: 5%4.3%

Consumer Cyclical

Target: 5%9.7%

Utilities

Target: 5%4.9%

Communication Services

Target: 5%4.1%

Post-rebalance snapshot

After the trades · July 2026

$107,022

Book value (post-trade)

$2,970

Forward income

2.8%

Blended yield

9.1%

Dividend growth (5y)

Healthcare

Target 20%22.6%+2.6pp

Technology

Target 15%13.3%-1.7pp

Financial Services

Target 15%16.1%+1.1pp

Consumer Defensive

Target 15%15.5%+0.5pp

Industrials

Target 15%15.4%+0.4pp

Communication Services

Target 5%4.5%-0.5pp

Utilities

Target 5%4.5%-0.5pp

Consumer Cyclical

Target 5%4.2%-0.8pp

Energy

Target 5%4.0%-1.0pp

January watch — 6% cap flags

CSCO 8.42% — Over 6% cap — January trim candidate
ADM 6.46% — Over 6% cap — January trim candidate

Accountability

Performance vs. DGRO

Post-trade portfolio value $107,022 · forward yield 2.8% (target 3%) · dividend growth 9.1%. All sector sleeves within ±3pp of target. CSCO and ADM slightly over the 6% single-name cap — January trim watch.

Income

Top income contributors (pre-trade)

Top 5 names produce ~35% of forward income. Replacement picks should not deepen concentration in ultra-high-yield names unless the mandate requires it.

Ticker	Income	% of book
CMCSA	$220	8.5%
PEP	$184	7.1%
CVX	$178	6.9%
ADP	$163	6.3%
ACN	$163	6.3%
ABBV	$159	6.1%