Copernicus Portfolio Review: 29 December 2023

Grand Tetons and Jackson Lake

To end 2023 portfolio reviews on a strong note I selected the Copernicus as it is the portfolio for the young or those investors several years away from retirement.  The thesis of the Copernicus is to invest only in U.S. Equities and never sell unless there is a dire emergency.  While I use four equity ETFs in this portfolio, one could narrow it to VOO or a combination of VOO, VTI, and ESGV.  SPY and VOO are close to identical securities as both are designed to track the S&P 500.

The basic idea is to feed the Copernicus each month or every payday.  Hold cash to a minimum so one is fully invested at all times.  Since inception a few years ago, this investing model is working quite well as readers will see from the performance and risk data.

Copernicus Portfolio

Here we have the investment quiver and current holdings for the Copernicus.  All four U.S. Equity ETFs are a Buy so one checks the rankings to see where to invest available cash.  This morning the recommendation is to go with ESGV as it holds the number one rank (5th column from the right).  This morning I set several limit orders to purchase more shares of ESGV.

Copernicus Performance Data

The following data is almost exactly two years of information.  With an annualized IRR of 14.1% the Copernicus is crushing the S&P 500 (SPY).  How can this be if we are using U.S. Equity ETFs.  What happened is that many shares were purchased during poor market periods in 2022.  When the market took off, those shares purchased at lower prices elevated the IRR percentage.  This is known as dollar-cost-averaging.  It is a winning strategy, assuming the market will be higher in the future than it is today.

Copernicus Risk Ratios

The Copernicus is also a winner on a risk adjusted basis as the Jensen Alpha or Jensen Performance Index is a very high 13.7.

Only a few months over the past year has the Information Ratio been higher than the current 3.41 value.  Enjoy these figures as it will be very difficult to maintain these high values.  While I anticipate the Copernicus will continue to top the S&P 500 these five metrics will likely return to some lower mean values.

Copernicus Buy & Hold Portfolio Review: 18 May 2023