Rutherford-Darwin Portfolio Review: 25 July 2025

Kew Gardens, London, England

US equities continued their steady climb to new all-time highs this week with the SPX (S&P 500 Index) closing ~1.5% higher than last week’s Close:

The next potential resistance level might come somewhere in the 6450-6500 range between the 1.236 Fibonacci extension level and the psychologically significant 6500 “round number”. From there we would wait to see whether the bullish trend might continue or whether we might take a breather and pullback to retest prior resistance (now as potential support) at the ~6150 level.

In terms of performance relative to other major asset classes, US equities remain in the middle of the pack with Bonds and Developed Market equities leading the way:

Oil and Crypto were the laggards this week.

Activities in the Rutherford-Darwin Portfolio this week look like this:

starting with the purchase of 200 shares in each of the SPLG (US Large Cap quities) and EEM (Emerging Market equities) ETFs. This was basically to replace shares that had been taken away through the exercise of Call Options that expired “In-The-Money” (ITM) last Friday and to slightly adjust to current recommended allocations for risk parity and 2% targeted volatility. In addition, Call Options at the $73 strike level, expiring 1 August, were sold against the 100 shares held in USO Oil to bring the effective holding down closer to the volatility/risk target level of 25 shares (as reported in last week’s review). Since these Options are currently ITM they provide a significant level of downside protectiom/insurance for the portfolio. At the end of the week I also sold Call Options against holdings in IBIT (Crypto), EFA (Developed Market equities) and VNQ (Real Estate) to generate credits to be used for additional downside protection and/or additional “alpha” profits. Current IRR on the portfolio, since inception, is showing as ~23.5%.

The current portfolio hedges look like this:

where, to date, I have collected $939 in credits from the sale of Call Options and am showing a current $208 in (alpha) profits from these hedges. The portfolio is currently ~30% hedged (+90 SPY equivalent in share holdings vs -34 SPY equivalent positions in Options). At the same time the portfolio benefits by ~$27.50 per day from time premium decay in the Options.

The performance equity curve currently looks like this:

with volatility running at a comfortable 4.4%.

Checking on the Kipling worksheet for current rankings and recommendations we see the following picture:

with SPLG, EEM and IBIT showing as recommended Buys and EFA, VNQ and USO as Holds. IAU (Gold) is still showing as a Sell recommendation but, with a Score of 9 and bullish MACD and RSI indicators, I still see no compelling reason to Sell.

In terms of current calculated allocations to maintain risk parity and target volatility the worksheet looks like this:

where the over-allocation to 4 of the ETFs is compensated (effectively reduced) through the sale of Call Options.

At this point I see no need to make any adjustments but to keep monitoring positions. Options in IBIT and USO will expire next Friday so I will likely need to “roll” these positions to a new expiry date before the end of the week since these Options are presently ITM to compensate for over-allocation in share holdings.