Moderate Portfolio

The Moderate Portfolio aims to grow your assets through a balance of capital appreciation and income.  It may be suitable for people in their 40s and 50s, who are in later stage of wealth accumulation. The static portfolio targets 60% in risk assets such as equity, commodity, real estate and energy master trust and 40% in bonds as strategic long-term allocations. The dynamic portfolio has 60% in risk asset on average, though the allocations on risk assets vary across different stages of economic and market cycles.  Historically, this strategy delivered 13.5% annual return with a 13% drawdown. The following are the backtesting results based on monthly data since 1970.

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

 Portfolio Composition in 12/2011

Equities Static Dynamic
SPY US Large Cap 15% 17%
IWM US Small Cap 15% 17%
EFA Developed Market Equity 15%
VWO Emerging Market Equity 15%
Dividend Assets
AMJ US Energy Master Trust 5% 11%
GLD Gold 5%
GSG Commodity 5%
HYG US High Yield 5% 17%
AGG US Bond 5% 19%
TIP US Treasury Inflation Indexed Bond 5% 9%
IEF US Treasury Bond 5%
TLT US Long Term Treasury Bond 9%
SHY US Short Term Bond

Two-year Monthly Performance

Forty-year Annual Performance

Portfolio Performance Statistics

Static Dynamic Benchmark
Average Monthly Return 0.83% 1.10% 0.77%
Monthly Standard Deviation 2.6% 2.3% 2.8%
Annualized Return 9.9% 13.1% 9.3%
Annualized Standard Deviation 8.9% 7.8% 9.9%
Sharpe Ratio (Risk-free Rate =   5.5%) 0.5 1.0 0.4
Maximum Drawdown (Loss) 34% 13% 31%
Expected Time to Recover (yrs) 3.4 1.0 3.3

Current Portfolio Composition

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