Kepler Portfolio Update: 2 August 2023

Steel Bridge – Portland, OR

Kepler is another portfolio where I am setting up the investment quiver so securities will come close to matching the performance of the S&P 500 while providing some downside protection when bear markets occur.  As readers will see in a moment, this is a period where equities rather than bonds are recommended.

Kepler Investment Quiver and Holdings

Nine major ETFs make up the investment quiver with BIL in the wings for periods when insufficient recommendations come from either equities or bonds such as BND and AGG.  SHV is also a safe harbor in times of recession.

Kepler Security Recommendations

Both domestic and international equities are all recommended for purchase.  Use the Rank found in the 5th column from the right for the fill order.  First fill ESGV followed by VOO, VTI, etc.

Kepler Manual Risk Adjustments

VOO holds more shares than recommended so BIL will not be filled close to the 465 shares recommended.  Limit orders are in to add more shares of SPY, VEA, VWO, and BIL.

Kepler Performance Data

The 26% held in cash has been a drag on performance and that partially accounts for the Kepler lagging the SPY benchmark by a significant percentage.  The delta is not quite so great when compared with AOA and AOR, but still quite large when one checks the IRR for the 19 month period.

Kepler Risk Ratios

We are seeing slight return/risk performance since last May.  However, the Information Ratio is telling us that the Kepler continues to lag the S&P 500 and is not getting better.  The goal is to turn this around with the fresh investment quiver.

This morning more shares were added to both Developed International Equities (VEA) and Emerging Market Equities (VWO).