Rutherford-Darwin Portfolio Review: 18 July 2025

Glendalough, Ireland

It was another relatively quiet week in the US Equity markets except for a little nervousness on Wednesday with rumors that Fed Chairman Powell might be fired by the President for not lowering interest rates – but in the end the SPX (S&P 500 Index) closed the week ~0.7% higher than last week’s close:

US Equities are still in an uptrend although the MACD Indicator is generating a negative bearish crossover, so caution is advisable.

Relative to other major asset classes:

US equities were only outpaced by Emerging market equities with Bonds and Oil showing the most weakness.

Darwin Core Portfolio:

The only significant changes to the portfolio came at the end end of the day on Friday when I let 100 shares of SPLG and 300 shares of EEM be called away (i.e. I effectively sold them) as short Call Options that I had sold were In-The-Money and the buyers exercised their rights to acquire the shares.

More on the implications of this below – but this leaves me with $324 from the sale of Options that I can keep or use for hedging.

The portfolio is presently showing an annualized  17.7% Internal Rate of Return (IRR) in the nine weeks since inception.

Current holdings are seen in the Kipling workbook (Held Column) together with current rankings and recommendations:

SPLG, EEM (Emerging Market equities) and IBIT (Crypto), are currently Buy recommendations with EFA, VNQ and USO as recommended Holds. IAU, that is currently held in the portfolio, is still showing as a recommended Sell. Note that I am using AOA (Aggressive 70/30 Global Equity/Bond Fund) as the benchmark filter for asset selection.

Checking on current allocation calculations for Risk Parity (a desired volatility/risk criteria) we see the following:

suggesting that we are currently under allocatiod (by ~200 shares) to SPLG and IAU (~50 shares) and over allocated to USO and IBIT.

The easiest way to adjust this may simply be to buy 200 shares of SPLG, ignore IAU (since this has a Sell recommendation anyway) and to buy 200 shares of EEM (recommended Buy) to replace the 300 shares that were sold on Friday. For the ETFs that are oversubscribed I can sell Call options to reduce the effective number of shares held by adjusting the position “Delta” of the resultant Covered Call Positions.

Rutherford Risk Management:

The present Option/Hedge picture looks like this:

where I am holding no hedge positions (since they all expired on Friday), but am showing a net $324 credit from Call Options sold to date.

The plan will be to buy 200 shares of SPLG and 200 shares of EEM as noted above and then to sell Call Options as appropriate against the share holdings. For example, if I were to Sell a Call Option in IBIT, with a “Delta” of 0.30 (these have a strike price ~0.5 standard deviation from current price) this would be the equivalent of selling 30 shares of IBIT so as to bring the allocation in line with the above allocation calculations.

I will update this post with details once I have made adjustments next week.

In the meantime, this is what the 9 week performance to date looks like:

with ~2.6% net gain/profit and very attractive low volatility/risk of 4.24%.

Update: 21 July 2025

This morning I purchased 200 shares of SPLG (S&P 500 Large Caps) to bring my total holdings to 300 shares and 200 shares of EEM (Emerging Market Equities) to replace those taken away when Options expired on Friday (18 July). I also sold a Call Option at the $79 strike, expiring 15 August, against the 100 shares of USO held in the portfolio. This brought in a credit of $94. Current holdings presently look like this:

and I shall be looking to sell more Option premiums on signs of weakness in the next few days.