ITA Wealth Management

  • Home
  • Blog
  • Guest Registration
  • Lifetime Member
  • Forum
  • Reset Password
  • Contact Me
  • About Me
You are here: Home / ITA Portfolios / Darwin Portfolio / Darwin Portfolio Review: 23 December 2021

Darwin Portfolio Review: 23 December 2021

December 24, 2021 By HedgeHunter

Darwin Portfolio Review: 23 December 2021 1

The Rhine from Rudesheim, Germany

The Darwin is a “Core” Portfolio with monthly review/adjustments to account for changes in the volatility/risk associated with the individual assets held in the portfolio.  Construction is simple in that the portfolio holds only five ETFs – VTI (US equities), VSS (Global ex US equities – with emphasis on small-cap), VNQ (US Real Estate), TLT (US Treasuries) and GLD (Commodities – Gold).

Allocations to these five ETFs is calculated, based on volatility, so as to target equal risk to each asset. Current allocations are as shown in the bottom line below:

Darwin Portfolio Review: 23 December 2021 2

The volatility target for each asset is set to 10% (aggressive) and I am allowing 25% leverage.

On top of this portfolio I have added a volatility position for additional diversification beyond the 5 core assets.  For this I have allocated an additional $1,000 (~10%) as additional margin that takes me to a ~35% leveraged account. At the present time (and under periods of “normal” volatility) I am long SVXY, an ETF that is short the short-term VIX futures – i.e. I am selling volatility to collect excess premiums paid by investors that want to hedge their portfolios. At the beginning of this month I made a mistake by switching to VXX (an ETF that is long short-term VIX futures) too soon, anticipating a “Buy” signal that never came. I quickly switched back but it cost me ~$200 🙁

The current recommended share holdings in the core portfolio required adjustments as shown below:

Darwin Portfolio Review: 23 December 2021 3i.e. I sold shares in VTI and VNQ and added shares in TLT and GLD.  Holdings in VSS remain the same since the recommended adjustment of 1 share was less than the 20% difference that I am using to justify adjustments (especially when my costs in this account are rather high for a small account).

Due to my mistake with the volatility trade and the high transaction costs this portfolio is slightly under water (-0.9%) since its inception 7 months ago.

Performance to date looks like this:

Darwin Portfolio Review: 23 December 2021 4

The stacked allocation areas of the above graph show the relative allocations to each asset at each adjustment date. The red line shows the net returns of the total portfolio.

The SPX (S&P 500 Index) has increased ~10% over this period – so diversification has not helped. But this may not be the case over the long term.

David

(Visited 46 times, 1 visits today)
facebookShare on Facebook
TwitterTweet
FollowFollow us
PinterestSave

Filed Under: Darwin Portfolio, Portfolio Management, Portfolio Performance Tagged With: Darwin Portfolio, Portfolio Management, Portfolio Performance

Popular Posts

  • Hawking Portfolio Review – 1 April 2022
  • Investment Policy Statement: February 2022
  • How To Handle This Selloff: 18 May 2022
  • Rutherford Portfolio Review (Tranche 1): 8 April 2022
  • 2022 Guidelines for Relative Strength Portfolios
  • Kepler Portfolio Review: 15 March 2022
  • Hawking Portfolio Review – 1 March 2022
  • Schrodinger Portfolio Review: 4 February 2022
  • Using Volatility as a Diversifier and a Portfolio Hedge
  • Schrodinger Portfolio Review: 10 March 2022

General Investment News

Portfolios coming up for review are:  Huygens, Galileo, Carson Trio, and Einstein.  Non-scheduled portfolios may be reviewed.  If you are a new user, check the posts you missed. Links to Random Posts are found in the lower right-hand footer or just to the right of what you are now reading.  Most popular posts are found in the lower left-hand footer.

Check the Forum for more detailed information.  If you wish to begin a financial discussion, use the Forum.

Contact me at itawealth@comcast.net if interested in a Lifetime Membership.  Long-time Platinum members are now Lifetime members and this blog is free to all who signup as a Guest.  A few blogs are reserved for Lifetime members.

Random Posts

  • Gauss Portfolio Review: 16 November 2021
  • Back Testing Issues: Remain Skeptical of Results
  • Carson Trio Reviews: 31 March 2022
  • Pauling Portfolio Review: 19 November 2021
  • Gauss Portfolio Review: 13 April 2021
  • Bohr Portfolio Review: 22 October 2021
  • Over-Valued Market: Four Critical Indicators
  • Bohr Portfolio Review: 5 October 2021
  • Bullish Percent Indicators: 28 January 2022
  • Franklin and Galileo Updates: 24 January 2022
  • Reviewing The Fundamentals of Investing

Log in | Website Design by BOING