Sometimes it’s a good idea to give yourself a creative challenge.
One of my biggest weaknesses as an investor, that I’ve tried my best not to spill over profusely onto this site, is that I’m inclined towards complexity.
I love keeping a messy room when it comes to my own personal portfolio.
In other words, I’ve got lots of funds under the hood.
Way more than the average investor.
In terms of constructive feedback, I’ve had investors tell me that my portfolio ideas (that tend to be somewhere between 5 to 10 funds on average) are often overly complicated.
Hence, I’ve given myself a fun challenge.
Can I come up with diversified model portfolios that are capital efficient using only three funds?
Here is my specific mandate:
Create a series of diversified portfolios that offer 4 or more strategies that are limited to just 3 funds.
At first, I thought I’d maybe only come up with 4 to 6.
However, I’ve got 20 to share with you today!
Yes, you heard that correctly.
20.
Furthermore, they all follow the guidelines and template of the Picture Perfect Portfolios 2.0 model portfolios:
- Capital Efficiency
- Maximum Diversification
- Optimization
An attempt by an amateur investor to come up with serious portfolios with absolutely ridiculous names.
You’ll notice they range from 140% to 200% canvas size and from ultra defensive (tactical equity exposure of 0% in defensive mode) to 100% equities plus diversifiers.
Moreover, each portfolio features a minimum of 4 strategies and a maximum of 9.
This challenge helped me to think more creatively and to tighten the reigns.
I was actually surprised that it’s a cinch to put together a diversified portfolio with just 3 funds.
So without further ado, let’s explore them!
Hey guys! Here is the part where I mention I’m a travel vlogger! This investing opinion blog post is entirely for entertainment purposes only. There could be considerable errors in the data I gathered. This is not financial advice. Do your own due diligence and research. Consult with a financial advisor.
20 Expanded Canvas Portfolios: 3 Funds / 4+ Strategies
These asset allocation ideas and model portfolios presented herein are purely for entertainment purposes only. This is NOT investment advice. These models are hypothetical and are intended to provide general information about potential ways to organize a portfolio based on theoretical scenarios and assumptions. They do not take into account the investment objectives, financial situation/goals, risk tolerance and/or specific needs of any particular individual.
Perfect Pizza Portfolio
40% $RSSY – Return Stacked U.S. Equity & Futures Yield ETF (coming soon)
40% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $GDMN – WisdomTree Efficient Gold Plus Gold Miners Strategy Fund
Canvas: 196%
Exposures:
40% Equities
40% Carry (Futures)
40% Managed Futures
40% Bonds
36% Gold Strategy (Gold exposure + Gold producing equities)
Strategies: 6
Objective: A capital efficient alternative to an equal slice Harry Browne Portfolio with extra diversifiers (managed futures & carry) instead of cash
Benchmark: Harry Browne Permanent Portfolio (25% VTI / 25% GLD / 25% TLT / 25% BIL)
Bounty Hunter Portfolio
40% $RSST – Return Stacked US Stocks & Managed Futures ETF
40% $RSSB – Return Stacked Global Stocks & Bonds ETF
20% $RSSY – Return Stacked U.S. Equity & Futures Yield ETF (coming soon)
Canvas: 200%
Exposures:
100% Equities
40% Bonds
40% Managed Futures
20% Carry (Futures)
Strategies: 4
Objective: To outperform an all equity portfolio utilizing a diverse capital efficient ensemble of 100% alternatives added to the mix
Benchmark: 100% Equities (60% SPY + 40% VT)
Tightrope Walker Portfolio
40% $UPAR – UPAR Ultra Risk Parity ETF
40% $BLNDX – Standpoint Multi-Asset Fund
20% $QDSIX – AQR Diversifying Strategies Fund
Canvas: Variable
Exposures:
Global Equities
Bonds (including TIPs)
Managed Futures
Gold
Market Neutral
Macro
Style Premia
Arbitrage
Multi-Asset
Strategies: 9
Objective: As balanced and diverse of a portfolio that one could possibly assemble where maximum diversity is priority numero uno
Benchmark: None
The Chameleon Portfolio
50% $BLNDX – Standpoint Multi-Asset Fund
25% $RDMIX – Rational/ReSolve Adaptive Asset Allocation Fund
25% $QSPIX – AQR Style Premia Alternative Fund
Canvas: Variable
Exposures:
Global Equities
Managed Futures (Trend)
Bonds
Global Systematic Macro
Tail-Risk
Style Premia
Strategies: 6
Objective: An adaptive alternative to a global static risk parity portfolio where diversification reigns supreme
Benchmark: Global Risk Parity (50% $AGG / 30% $VT / 10% $GLD / 10% $DBC)
Coin It Portfolio
40% $GDE – WisdomTree Efficient Gold Plus Equity Strategy Fund ETF
36% $RSBT – Return Stacked Bonds & Managed Futures ETF
24% $BTRN – Bitcoin Trend Strategy ET
Canvas: 168%
Exposures:
36% Equities
36% Gold
36% Managed Futures
36% Bonds
24% Bitcoin (Trend-Following)
Strategies: 5
Objective: A diversified and capital efficient balanced portfolio with a generous allocation budget and tilt towards Bitcoin
Benchmark: None
Value Vulture Portfolio
60% $AVGV – Avantis All Equity Markets Value ETF
20% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $GOLY – Strategy Shares Gold-Hedged Bond ETF
Canvas: 140%
Exposures:
60% Global Value Equities
40% Bonds
20% Managed Futures
20% Gold
Strategies: 4
Objective: A balanced take on a global value tilted portfolio with three additional strategies added to the mix (bonds, managed futures, gold)
Benchmark: Global 60/40 (60% VT / 40% AGG)
Pack Mule Portfolio (60/40+)
40% $RSSB – Return Stacked Global Stocks & Bonds ETF
20% $RSST – Return Stacked US Stocks & Managed Futures ETF
40% $QDSIX – AQR Style Premia Alternative Fund
Canvas: 160%
Exposures:
60% Equities
40% Bonds
20% Managed Futures
40% Alt-Other:
Market Neutral
Macro
Style Premia
Arbitrage
Multi-Asset
Strategies: 8
Objective: To pack mule a diverse set of alternatives to the backbone of a 60/40 portfolio
Benchmark: 60/40 Portfolio (VBIAX and AOR)
Even-Steven Portfolio
50% $ACWV – iShares MSCI Global Min Vol Factor ETF
25% $RSBT – Return Stacked Bonds & Managed Futures ETF
25% $GOLY – Strategy Shares Gold-Hedged Bond ETF
Canvas: 140%
Exposures:
50% Global Min Vol Equities
50% Bonds
25% Managed Futures
25% Gold
Strategies: 4
Objective: Equal Parts Equities (50%), Bonds (50%) and Alternatives (50%) for a balanced defensive approach.
Benchmark: 50% VT / 50% AGG
So Trendy Portfolio
50% $BLNDX – Standpoint Multi-Asset Fund
30% $GMOM – Cambria Global Momentum ETF
20% $COM – Direxion Auspice Broad Commodity Strategy ETF
Canvas: Variable
Exposures:
Global Equities (MCW + factors)
Managed Futures
Bonds
Commodities (long + long/flat)
Strategies: 4
Objective: A pure trend portfolio (long, long-flat and long-short strategies) with exposure to a diverse range of global asset classes
Benchmark: AOK and AOR
Quantasaurus Portfolio
40% $SPQ – Simplify US Equity PLUS QIS ETF
40% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $GDE – WisdomTree Efficient Gold Plus Equity Strategy Fund ETF
Canvas: 176%
Exposures:
58% Equities
40% Bonds
40% Managed Futures
20% QIS Multi-Strategy
18% Gold
Strategies: 5
Objective: An alternative tilted portfolio where 78% of the portfolio exposure is committed to strategies other than long-stocks and bonds
Benchmark: None
Living Large L/S Portfolio
40% $RSST – Return Stacked US Stocks & Managed Futures ETF
40% $QLEIX – AQR Long-Short Equity Fund
20% $QSPIX – AQR Style Premia Alternative Fund
Canvas: 140%
Exposures:
40% Equities
40% Long-Short Equities
40% Managed Futures
20% Style Premia
Strategies: 4
Objective: A portfolio where every fund has exposure to L/S strategies across a diverse range of asset classes.
Benchmark: None
The Sloth Portfolio
35% $GDE – WisdomTree Efficient Gold Plus Equity Fund
35% $RSBT – Return Stacked Bonds & Managed Futures ETF
30% $CAOS – Alpha Architect Tail Risk ETF
Canvas: 163%
Exposures:
31.5% Equities
31.5% Gold
35% Bonds
35% Managed Futures (Trend)
30% Tail Risk: OTM Put
Strategies: 5
Objective: A Dragon-inspired portfolio with a slow and steady approach to accumulation whilst defensively being prepared for all economic scenarios
Benchmark: None
Factorious Portfolio
60% $GLOF – iShares Global Equity Factor ETF
20% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $RSBY – Return Stacked Bonds & Futures Yield ETF (coming soon)
Canvas: 140%
Exposures:
60% Global Multi-Factor Equities
40% Bonds
20% Managed Futures (Trend)
20% Carry (Futures)
Strategies: 4
Objective: A factor first approach to asset allocation where a multi-strategy approach is favoured over MCW equities.
Benchmark: 60% VT / 40% AGG
Creative Canvas Portfolio
60% $RSST – Return Stacked US Stocks & Managed Futures ETF
20% $GOLY – Strategy Shares Gold-Hedged Bond ETF
20% $RSBY – Return Stacked Bonds & Futures Yield ETF (coming soon)
Canvas: 200%
Exposures:
60% Equities
60% Managed Futures
40% Bonds
20% Gold
20% Carry
Strategies: 5
Objective: To expand the canvas to 200% with a balanced 60/40 portfolio plus diversifiers
Benchmark: 60/40 Portfolio ($VBIAX)
The Coward Portfolio
20% $HCMT – Direxion HCM Tactical Enhanced U.S. Equity Strategy ETF
40% $RSBT – Return Stacked Bonds & Managed Futures ETF
40% $GOLY – Strategy Shares Gold-Hedged Bond ETF
Canvas: 200% or 180%
Exposures:
Offensive:
40% Equities
80% Bonds
40% Managed Futures
40% Gold
Defensive:
0% Equities
80% Bonds
40% Managed Futures
40% Gold
20% Cash
Strategies: 4 of 5
Objective: A portfolio that has the ability to retreat to 0% equity exposure (hence the nickname ‘coward’) during market downturn scenarios
Benchmark: 20/80 Portfolio (20% $VTI / 80% $AGG)
Double Double Eh Portfolio
60% $AOFT – Auspice One Fund Trust
30% $PFAA.TO – Picton Mahoney Fortified Alpha Alternative Fund
10% $QBTL.TO – AGF US Market Neutral Anti-Beta CAD-Hedged ETF
Canvas: Variable
Exposures:
Global Equities
Managed Futures (Trend)
Bonds
Gold
M/N Equity
Arbitrage
Special Situation Credit
Style Premia
Strategies: 8
Objective: An alternative strategy for Canadians to consider who are seeking maximum diversification above all other considerations
Benchmark: Global Balanced (VBAL.TO ETF)
Ultimate Defender Portfolio
40% $ACWV – iShares MSCI Global Min Vol Factor ETF
50% $RSBT – Return Stacked Bonds & Managed Futures ETF
10% $CAOS – Alpha Architect Tail Risk ETF
Canvas: 150%
Exposures:
40% Global Min Vol Equities
50% Bonds
50% Managed Futures
10% OTM PUT
Strategies: 4
Objective: To overall limit exposure to equities (40%) and to choose the most defensive stocks strategy (min vol) to stabilize the portfolio
Benchmark: 40/60 Portfolio (40% VT / 60% AGG)
Tactical Tornado Portfolio
40% $RSSY – Return Stacked U.S. Equity & Futures Yield ETF (coming soon)
40% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $HCMT – Direxion HCM Tactical Enhanced U.S. Equity Strategy ETF
Canvas: 200% or 180%
Exposures:
Offensive:
80% Equities
40% Managed Futures
40% Bonds
40% Carry (Futures)
Defensive:
40% Equities
40% Managed Futures
40% Bonds
40% Cary (Futures)
20% Cash
Strategies: 4 or 5
Objective: A portfolio that is balanced but has an offensive boost towards growth (80%) or tactically retreats to conservative (40%) equity exposure
Benchmark: None
Tortoise Portfolio
20% $USML – ETRACS 2x Leveraged MSCI US Minimum Volatility Factor TR ETN
60% $RSBT – Return Stacked Bonds & Managed Futures ETF
20% $BTAL – AGF US Market Neutral Anti Beta Fund
Canvas: 180%
Exposures:
60% Bonds
60% Managed Futures
40% US Min Vol Equities
20% M/N Anti-Beta
Strategies: 4
Objective: A portfolio that is designed for slow and steady accumulation with the potential to retreat into its shell during market turbulence
Benchmark: 40/60 Portfolio (40% $VTI / 60% $AGG)
Alt Arrow Portfolio
40% $RSSB – Return Stacked Global Stocks & Bonds ETF
20% $QLEIX – AQR Long-Short Equity Fund
40% $QDSIX – AQR Diversifying Strategies Fund
Canvas: 140%
Exposures:
40% Global Equities
40% Bonds
40% Alt Other
20% L/S Equities
Market Neutral
Macro
Style Premia
Arbitrage
Multi-Asset
Strategies: 9
Objective: A portfolio where alternative strategies take up 60% of the resources in terms of asset allocation with only 40% to stocks/bonds.
Benchmark: None
Bonus Portfolios
Here are some bonus portfolios from other friends and acquaintances on FinTwit.
I love receiving contributions from others as it almost always opens my eyes to new possibilities.
Triforce Portfolio
Creator: @game_book_life
Backtest:
Here's a somewhat representative backtest using PV.https://t.co/etwDxAgmZG
In this backtest (it is ONLY a backtest), it had similar vol as 60/40 & similar returns as all equity.
Biggest assumption is using $ASFYX as a proxy for trend, but it's very similar to RSST trend.
— game-book-life (@game_book_life) March 29, 2024
36.5% $RSST – Return Stacked US Stocks & Managed Futures ETF
27% $NTSI – WisdomTree International Efficient Core Fund
36.5% $QSPIX – AQR Style Premia Alternative Fund
Canvas: 186.5%
Exposures:
60.8% Equities (60/40 US/exUS)
36.5% Managed Futures
16.2% Bonds
73% Style Premia
Strategies: 4
Objective: An alternative to a global 60/40 portfolio that avoids home country bias (with Int-Developed equities) whilst committing significant resources to style premia and managed futures
Benchmark: Global 60/40 (60% $VT / 40% VBTLX)
Nomadic Samuel Final Thoughts
Whew, thanks for making it through all 20 portfolios!
I hope I didn’t overwhelm you with options galore.
Sometimes going to a behemoth supermarket can make me feel anxious as I’m overwhelmed by choices.
However, I wanted to present as many different portfolio options as possible to explore all of the interesting combinations out there.
These, at the end of the day, are just ideas.
I’m of the firm opinion that it’s not a wise idea to just copy any of these portfolios; instead put your personal stamp of approval by coming up with something that makes sense for you.
With all that said, there has never been a better time IMO to be a capital efficient DIY investor.
You have so many options these days as fascinating puzzles pieces continue to penetrate the marketplace.
But at this point in the article I’m more interested in what you’ve got to say.
What are some three fund portfolio ideas that you’ve come up with?
Do you have a favourite portfolio amongst the ones that I’ve shared?
Please let me know in the comments below.
Important Information
Investment Disclaimer: The content provided here is for informational purposes only and does not constitute financial, investment, tax or professional advice. Investments carry risks and are not guaranteed; errors in data may occur. Past performance, including backtest results, does not guarantee future outcomes. Please note that indexes are benchmarks and not directly investable. All examples are purely hypothetical. Do your own due diligence. You should conduct your own research and consult a professional advisor before making investment decisions.
“Picture Perfect Portfolios” does not endorse or guarantee the accuracy of the information in this post and is not responsible for any financial losses or damages incurred from relying on this information. Investing involves the risk of loss and is not suitable for all investors. When it comes to capital efficiency, using leverage (or leveraged products) in investing amplifies both potential gains and losses, making it possible to lose more than your initial investment. It involves higher risk and costs, including possible margin calls and interest expenses, which can adversely affect your financial condition. The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the official policy or position of anyone else. You can read my complete disclaimer here.
