Kepler Portfolio Update: 9 June 2026

Forgotten Tractor

As mentioned in the last blog this portfolio (Kepler) is designed to protect capital and to provide some resistance should the government employ Financial Repression in an effort to get out from under the 40 trillion dollar debt.  If you compare the asset allocation for the Kepler with the recent post you will see a few changes.  For example, I added JEPQ and JEPI to add additional income.

Kepler Asset Allocation Model

Below is the asset allocation layout for the Kepler.  Short-term treasuries (SCHO) dominates the current portfolio.  In the next slide I explain how I plan to bring the various asset classes into balance.

Kepler Rebalancing Recommendations

To raise cash I sold shares of SCHO.  I don’t plan to bring all asset classes into balance all at once.  With the market hovering around an all time high the first focus is to bring lower volatile and higher yielding ETFs into balance.  Limit orders are in place to purchase shares of USFR, VTIP, VNQ, VIG, JEPQ, JEPI, SGOV and SGOL.  Equity ETFs such as VTI, VEA, and VWO can wait until there are better buying opportunities.

The eventual goal is to keep the assets within 1% to 3% of the target.  Second quarter dividends will provide some additional cash to begin phasing in or bring under target ETFs up to the recommended target percentage.

Kepler Performance Data

Since 12/31/2021 the Kepler has disappointed as the IRR is far behind any of the six possible benchmarks.  Once the Kepler has a few months of history I will check in to see how the new asset allocation is working.  This new asset allocation will work better in a declining market and less well in a rising market.

Kepler Risk Ratios

The Sortino Ratio indicates the portfolio is worth more than it was last June.  The Jensen Alpha is also a tad higher and the slope of the Jensen is positive.

Both the Treynor and Information Ratios are lower than they were a year ago.

Comments and Questions are always welcome.