Huygens Asset Allocation Portfolio Review: 11 October 2024

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Huygens is one of several portfolios using the Asset Allocation investing model.  If interested in learning more about this approach to investing, check out this website.  With only six plus months of using AA the Huygens is rounding into operation form.  The various asset classes are slowly coming into balance.

Huygens Asset Allocation Model

Below one finds the investment quiver and current holdings.  At this point in development asset classes above target tend to be U.S. Equity ETFs such as VB, VO, VTI, and VOO.  From review to review there will be price changes sufficient to always place certain asset classes below target.  We will purchase shares when they are down so this is a type of reversion-to-the-mean approach to investing.

Huygens Rebalancing Recommendations

Limit orders are in place to pick up shares of BND, BNDX, TLT, and VEA.  Available cash came from third quarter dividends.  Monthly dividends are limited and the owner of this portfolio is not adding new cash.  Therefore, bringing the various assets into balance will be a very slow process.

Huygens is a tax deferred account so selling shares of VB would not create a taxable event and would provide cash to elevate an asset class or two closer to the recommended percentage.

Huygens Performance Data

Since 12/31/2021 the Huygens has outperformed the AOR benchmark.  Topping SPY is unlikely as the portfolio holds bonds and treasury ETFs and they are not the the top performers when compared to equity ETFs.

Huygens Risk Ratios

Over the last few months the Jensen Alpha is showing improvement.  We need to see this continue in order to build confidence in the Asset Allocation investing mode.