Conservative Portfolio

The Conservative Portfolio aims to preserve your capital with a secondary objective of growth. It may be suitable for people in their 60s, who are in late stage of wealth accumulation and early stage of retirement . The static portfolio targets 40% in risk assets such as equity, commodity, real estate and energy master trust and 60% in bonds as strategic long-term allocations. The dynamic portfolio has 40% in risk asset on average, though the allocations on risk assets vary across different stages of economic and market cycles. Historically, this strategy delivered 12% annual return with a 11% drawdown. The following are the backtesting results based on monthly data since 1970.

Long Term Performance Compared to Benchmark (40% S&P 500 +60% Barclays Aggregate Bond Index)

Portfolio Composition in 12/2011

SPYUS Large Cap15%9%
IWMUS Small Cap15%9%
EFADeveloped Market Equity15%
VWOEmerging Market Equity15%
Dividend Assets
AMJUS Energy Master Trust5%9%
HYGUS High Yield5%21%
AGGUS Bond5%29%
TIPUS Treasury Inflation Indexed Bond5%11%
IEFUS Treasury Bond5%
TLTUS Long Term Treasury Bond11%
SHYUS Short Term Bond

Two-year Monthly Performance

Forty-year Annual Performance

Portfolio Performance Statistics

Static Dynamic Benchmark
Average Monthly Return 0.79% 1.00% 0.72%
Monthly Standard Deviation 2.0% 1.8% 2.1%
Annualized Return 9.4% 12.0% 8.6%
Annualized Standard Deviation 6.8% 6.4% 7.3%
Sharpe Ratio (Risk-free Rate =   5.5%) 0.6 1.0 0.4
Maximum Drawdown (Loss) 24% 11% 18%
Expected Time to Recover (yrs) 2.6 0.9 2.1

[button link=”” color=”#0000FF” size=”3″ style=”1″ dark=”0″ square=”0″ target=”self”]Current Portfolio Composition[/button]