I am delaying the Schrodinger review until the June statement is available. A number of Trailing Stop Loss Orders (TSLOs) were set for this passively managed portfolio as there are duplicate ETFs due to holdovers from the early days when this portfolio was first established. For example, shares of EEM and EFA, purchased in 2001, are duplicates of VWO and VEA. I felt now was a good time to simplify the portfolio by selling off ETFs that overlap what I call our “critical” ETFs.
Schrodinger Efficient Frontier: As for the current construction of the Schrodinger, it is diversified to the point where the projected return is cramped. Run a search for “efficient frontier” on this blog and you will see higher projected returns for portfolios that are carrying fewer ETFs. More is not always better. By reducing the number of ETFs in the Schrodinger, I hope to enhance returns while still providing downside protection. Reducing draw-downs is not easy to accomplish with passively managed portfolios.