DST Portfolio Analysis: Master Report

Part 1: Proposed Allocation Analysis

Context: Jessica Lanning's proposal (Jan 27, 2026) to reallocate the Big Account and Small Account.

🚀 Executive Verdict

The proposal represents a distinct shift from Market Beta to Active Risk Management.

Big Account: Trades upside potential for crash protection. By removing "Global Market Blend" to fund more "Savos Risk Control" and "Value," it effectively buys insurance against a recession.
Small Account: A smart structural upgrade. It moves from a risky "Barbell" (Aggressive/Conservative mix) to a core-satellite approach with a 40% "Anchor" (New Frontier), stabilizing the account.
2026 Outlook: If the "Soft Landing" consensus holds, this portfolio will likely underperform (due to hedging costs). If a recession hits, it will significantly outperform.

⚠️ Critical Issue: Cash Shield Math

The proposal mentions setting aside $140k for 2 years of distributions.

The Math:
Distribution mentioned: $74k / quarter ($296k/year)
2-Year Total Requirement: $592k

Discrepancy: $140k covers less than 6 months. Clarify this immediately.

Head-to-Head: Old vs. New (Big Account)

Component	Role	Old Weight (Est.)	New Weight	Change
Global Market Blend	Beta Market Exposure	18%	0%	REMOVED
Savos Risk Control	Hedge Downside Protection	18%	20%	+2%
JPM US Value	Value Dividend/Defensive	6%	10%	+4%
Federated Strat Value	Value Dividend Yield	12%	14%	+2%
New Frontier Profile 3	Moderate Model (60/40)	17%	25%	+8%

Component

Role

Old Weight (Est.)

New Weight

Change

Global Market Blend

Beta Market Exposure

18%

REMOVED

Savos Risk Control

Hedge Downside Protection

18%

20%

+2%

JPM US Value

Value Dividend/Defensive

10%

+4%

Federated Strat Value

Value Dividend Yield

12%

14%

+2%

New Frontier Profile 3

Moderate Model (60/40)

17%

25%

+8%

Scenario Analysis: Who Wins in 2026?

Scenario	Likelihood	Winner	Why?
1. "Goldilocks" Rally Tech continues to soar, no recession.	40%	OLD Portfolio	Old portfolio had more "Global Market Blend" (Beta) to capture the rally. New portfolio's hedges drag performance.
2. "Soft Landing" / Chop Market flat or slight growth (+5-8%).	35%	TIE / NEW	In a choppy market, the "Value" dividends provide steady returns while Growth stalls.
3. Recession / Bear Market Market drops >15%.	25%	NEW Portfolio	This is what the New Portfolio is built for. Savos (Hedged) and Value mitigate losses significantly.

Scenario

Likelihood

Winner

Why?

1. "Goldilocks" Rally
Tech continues to soar, no recession.

40%

OLD Portfolio

Old portfolio had more "Global Market Blend" (Beta) to capture the rally. New portfolio's hedges drag performance.

2. "Soft Landing" / Chop
Market flat or slight growth (+5-8%).

35%

TIE / NEW

In a choppy market, the "Value" dividends provide steady returns while Growth stalls.

3. Recession / Bear Market
Market drops >15%.

25%

NEW Portfolio

This is what the New Portfolio is built for. Savos (Hedged) and Value mitigate losses significantly.

Part 2: Historical Performance (2022-2026)

Context: Comparison of the estimated DST Portfolio performance vs. the S&P 500 Benchmark over the lifespan of the current allocation (Summer 2022 - Present).

📉 The Performance Gap

Verdict: Significant Underperformance

S&P 500 (SPY) Total Return: ~+85%
DST Portfolio (Est.) Total Return: ~+46%
Gap: The portfolio lagged the market by approximately 39 percentage points.

Why the Gap?

Missed the Tech Rally: The portfolio's defensive tilt (Value/Dividends) meant it missed the massive AI-driven run of 2023-2024 (Nvidia, Microsoft, etc.).

Bond Drag: Fixed income components acted as an anchor while stocks soared.

Success in 2022: The portfolio did outperform in late 2022 (when the market crashed), validating its "Risk Control" purpose. However, the missed upside in the following years far outweighed that protection.

Part 3: Final Recommendation

The proposed changes are a vote of low confidence in the 2026 market rally. The advisor is explicitly removing cheap market exposure (Global Blend) to buy expensive protection (Savos/Active Value).

Is this "Good"? Yes, if you prioritize Wealth Preservation over Maximization. Given the account size (presumably significant), protecting the downside is often more important than chasing the last 10% of a bull run.

The "Small" Account Strategy: The shift to 40% New Frontier is smart. It prevents the "Small" account from blowing up if the speculative "Disrupters" bets fail. It professionalizes the allocation.