Energy Sector Risk-Return Allocator

Asset Class Weights 100% Total

Initial Capital ($ USD)

Mineral Royalties & Trusts 20%

Passive non-cost bearing cash flow. Insulated from capex, sensitive to spot price.

Integrated Majors (Exxon, Chevron) 40%

Diversified refining + upstream scale with robust dividend distribution.

Oilfield Services (SLB, HAL) 15%

High operating leverage. Cyclical drilling capex contracts; wide drawdown.

Midstream Pipelines & Storage 10%

Tollbooth fee structures, but bottleneck vulnerability during demand drops.

Renewables & Clean Tech 15%

Long-term secular transition hedge against structural fossil displacement.

Macro Stress Scenario

Annualized Return

8.0%

Scenario Adjusted

Max Drawdown

18.5%

Tail Risk Exposure

5-Yr Projected Value

$147,250

+$47,250 gain (47.3%)

Risk Profile

Moderate-High

Volatility Index: 14.8

Scenario Context (Hormuz Reopening): Middle East maritime transit stabilizes. Spot volatility cools, rewarding integrated major dividend yield and midstream throughput stability over pure speculative service leverage.

Tier	Weight	Capital ($)	Expected Return	Max Drawdown	Role in Portfolio